Are You Thinking About Retiring Early?

Life doesn’t always go as planned, and if you’re currently navigating a new set of circumstances that has led you to consider an earlier retirement, it’s important to proceed carefully and thoughtfully.

Is it possible for you to retire early? If so, what’s the best way to go about it?

To start, take a look at these basic considerations and reach out if you’d like to check in.

Strategize Social Security

You may be able to start collecting Social Security at age 62, but many people choose to hold off if they’re able to. Waiting until your full retirement age (which depends on your birth year) or up until age 70 will lead to an increase in benefits.

Rebalance as Needed

Whether it’s by re-examining your portfolio or shifting more assets to cash (or both), try to make sure you’re finding the right balance and reducing risk as needed.  

One of the best ways to reduce risk is to consider an indexed annuity as part of your overall portfolio.

Indexed annuities do 2 things extremely well:

1. Principle protection with upside growth
2. Offer guaranteed lifetime income streams

Create a Withdrawal Approach

While many retirees aim to withdraw around 4% of their investments in the first year of retirement and adjust the amount for inflation going forward, there are no set rules for success. 

In fact, most fiancial pundits are now saying because of market volatility you should withdraw no more than 3% per year in retirement to avoid running out of money.  You may decide to withdraw more or less depending on your budgeting habits and age. 

To see where you stand now, multiply your current savings by 4% and divide by 12 to find what your monthly income amount would be.

If you are needing a withdrawal rate greater than 4% to ensure you won't run out of money in retirement, this is another reason to consider an annuity which typically have withdrawal rates greater than 4%. 

Other Factors

Don’t forget about additional considerations like health care and taxes. Overall, it’s important to sit down and calculate your anticipated monthly expenses (including a cushion for anything unexpected).

Do you need assistance mapping out your short-term, mid-term and long-term goals? It's extremely important that you make sure your guaranteed income in retirement covers all expenses.  Reach out anytime to discuss your questions here:  www.IBC.guru

Thank you,

John Montoya