21 min
Income Ideas For Retiring Early (Part 1) The Fiscal Blueprint: Retirement Built Right w/ Financial Coach Jeff Montgomery
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- Investing
There have been so many interesting articles floating around lately on how the COVID-19 pandemic as affected retirement. Some of these statistics are absolutely astonishing!
Recent research has found that millions of Americans who lost their jobs during the early months of the pandemic have decided to call a quits early. (Market Watch article in May of 2020.)
Before COVID-19 came along, people over the age of 55 represented 25% of the American workforce. There were more workers over the age of 55 than under 30. In the course of just a few months, that ratio reversed!
In this 2 part series were going to layout some ideas for Retiring Early and discuss 6 steps to consider, just to get started and wrap your head around this idea of Retiring before you originally planned!
Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you’re a client I can’t give you advice because I don’t know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser…………. right? that’s just common sense.
(1:20) Practical Planning segment: We talked about how the ratio has basically reversed…where older Americans are retiring early, and now younger Americans make up more of the workforce. the direct result of COVID-19
Even if the younger workers had hours reduced or maybe have been laid off, they are seeking and plan to resume work in the future. The future is not so rosy for mature workers. We don't know what the normal on-site work environment will be like a year from now.
Will we still be social distancing for example, have the vaccines worked and things are 100% back to normal. Are restaurants and theaters open again at full capacity? I presume the answer may be somewhere in between.
Those over 55 may not want to take chances with their health and they have been saving for decades. They're not about to miss an opportunity to enjoy retirement just to work out a few more years in an unsafe environment. So, they are thinking about retiring early!
(4:30) Unfortunately, not everyone is in a position to retire right now, at least not the way they originally planned. However, if you find yourself considering early retirement what are some of the steps you should consider to get started.
Calculate your annual retirement income needs. In other words, do a budget calculate your net worth based on current assets and liabilities (6:20) check out your SS and if you have a spouse their level of SS based on different ages that you can begin drawing on them. link to watch a replay of our Social Security webinar estimate how much savings you need to have for the latter stages of retirement such as the cost for health care and long-term care assistance consider what portion of your portfolio you need to keep invested for long term growth consider your appetite for various forms of risk
(8:15) We have identified 4 forms of risk you need to discuss:
(8:35) Market Risk Can you tolerate day to day market volatility throughout retirement? Riskalyze as a very good tool: Go to our website and take the risk assessment
(10:35) Sequence of Returns Risk How will a drop in the market shortly before retirement or right when you retire impact you? Example: We will include a table in the show notes to show you the impact of sequence of returns risk on your money lasting. (13:50) Inflation Risk Can you live on a fixed income with no raise from the next 30 to 40 years? The answer to that question of course it depends on your assets but remember if you retire early, the money has to last much longer. Inflation is real and it is a silent income killer. It sneaks up on all of us without even realizing is there. Inflation Calculator: https://www.usin
There have been so many interesting articles floating around lately on how the COVID-19 pandemic as affected retirement. Some of these statistics are absolutely astonishing!
Recent research has found that millions of Americans who lost their jobs during the early months of the pandemic have decided to call a quits early. (Market Watch article in May of 2020.)
Before COVID-19 came along, people over the age of 55 represented 25% of the American workforce. There were more workers over the age of 55 than under 30. In the course of just a few months, that ratio reversed!
In this 2 part series were going to layout some ideas for Retiring Early and discuss 6 steps to consider, just to get started and wrap your head around this idea of Retiring before you originally planned!
Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you’re a client I can’t give you advice because I don’t know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser…………. right? that’s just common sense.
(1:20) Practical Planning segment: We talked about how the ratio has basically reversed…where older Americans are retiring early, and now younger Americans make up more of the workforce. the direct result of COVID-19
Even if the younger workers had hours reduced or maybe have been laid off, they are seeking and plan to resume work in the future. The future is not so rosy for mature workers. We don't know what the normal on-site work environment will be like a year from now.
Will we still be social distancing for example, have the vaccines worked and things are 100% back to normal. Are restaurants and theaters open again at full capacity? I presume the answer may be somewhere in between.
Those over 55 may not want to take chances with their health and they have been saving for decades. They're not about to miss an opportunity to enjoy retirement just to work out a few more years in an unsafe environment. So, they are thinking about retiring early!
(4:30) Unfortunately, not everyone is in a position to retire right now, at least not the way they originally planned. However, if you find yourself considering early retirement what are some of the steps you should consider to get started.
Calculate your annual retirement income needs. In other words, do a budget calculate your net worth based on current assets and liabilities (6:20) check out your SS and if you have a spouse their level of SS based on different ages that you can begin drawing on them. link to watch a replay of our Social Security webinar estimate how much savings you need to have for the latter stages of retirement such as the cost for health care and long-term care assistance consider what portion of your portfolio you need to keep invested for long term growth consider your appetite for various forms of risk
(8:15) We have identified 4 forms of risk you need to discuss:
(8:35) Market Risk Can you tolerate day to day market volatility throughout retirement? Riskalyze as a very good tool: Go to our website and take the risk assessment
(10:35) Sequence of Returns Risk How will a drop in the market shortly before retirement or right when you retire impact you? Example: We will include a table in the show notes to show you the impact of sequence of returns risk on your money lasting. (13:50) Inflation Risk Can you live on a fixed income with no raise from the next 30 to 40 years? The answer to that question of course it depends on your assets but remember if you retire early, the money has to last much longer. Inflation is real and it is a silent income killer. It sneaks up on all of us without even realizing is there. Inflation Calculator: https://www.usin
21 min