Early retirement?

man standing far away from mountains

“Can I retire early?” Many of our clients in their 50s ask this. Often they’ve dedicated substantial personal time to their careers and built an enviable nest egg. They say they’re ready to get off the treadmill.

To help answer this question, we take these steps with them—and hope you engage us to help you do the same if same, if you’re contemplating early retirement:

#1: Clearly articulate how you plan to live your life for the next 30+ years. This is one of the most difficult aspects of planning for early retirement. Many clients want relief from a demanding, yet fulfilling career. However, they haven’t carefully thought through how they’ll spend their free time. What’s more, they’re uncertain whether they’ll be intellectually and socially fulfilled by weekly golf games and frequent travel. As you formulate the vision for your retirement, think about what matters most to you in your life and how you plan to achieve these goals. During our Intentional Wealth planning process we’ll ask you some thought-provoking questions that can help you begin to formulate the vision for your future.

#2: Review your retirement cash flow and financial plan. After crystallizing your vision, make certain that you can comfortably afford to fulfill it. By leveraging our expertise in financial planning we’ll translate your vision into a comprehensive retirement plan that we will closely review every detail with you.

#3: Plan for health care costs. Since you’re not eligible for Medicare until you’re 65, you must determine out-of-pocket costs for health insurance until you reach this milestone. While we include this in the planning process, it’s important to take note of these costs. When some of our clients realize the implications of these costs, they reconsider early retirement or explore part-time work.

Keep in mind: Medicare only covers a portion of medical expenses, so you’ll likely need to purchase additional insurance when you reach 65 to cover this gap as well as covering out-of-pocket costs. Again, we factor this into your retirement plan, though many clients don’t realize what Medicare covers until they go through this planning process with us.

#4: Take a test drive. We applaud clients if Steps 1–3 indicate that they can afford early retirement. However, we caution them to hold off on moving too quickly into the next chapter of their lives. Instead, we encourage them to test-drive retirement in order to be 100% certain they are emotionally ready.

One way to do this: Reach out to your HR department about facilitating an extended vacation or sabbatical. Use the time off to see how much you enjoy this next chapter. The experience will help you reaffirm a decision to retire early or press the pause button for a few more years.

Early retirement requires thoughtful planning. Our goal is that by working with us, you’ll be better equipped to make a decision that suits your life situation.

For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-554-6000.

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