Retiring early can be the best or worst single decision of your life. Leaving work to live your best life in retirement is my life’s work. Let’s make sure you’re not leaving work only to become destitute and dependent upon others by knowing how much we can spend, how to cover our expenses, and what strategies to consider, or even if you have plenty of money, and what retiring early might look like for you as well.

Hi, I’m Hunter Brockway, founder of Boca Retirement Strategies, here to guide you to a successful stress free retirement while spending more and avoiding being killed in taxes. We need to start with your goals. I always say we want to retire to something and not from something. I understand being fed up at work but retiring just for the sake of retiring or just for the sake of quitting with no idea what you will do, what your social life will look like, or what your family life will look like can make a massive impact.

If you know the answers to all of those, then great. Let’s talk about some of the considerations to retiring early. First, let’s talk about healthcare. If you retire before 65, you’ll have to find healthcare somewhere other than Medicare, and it could cost more than you’re expecting to pay in Medicare.

That’s not to say Medicare is cheap. But the cost needs to be evaluated. Some clients I work with who retire early have told me that they used healthcare through the Affordable Care Act and it works for them. Now, there’s two sides to this coin, however. Right now, we’re looking at it from retiring early in spending and having less money.

But what if you have plenty of money when retiring early? The ACA healthcare has income thresholds. So you may not qualify for ACA programs and be forced to get costlier healthcare elsewhere or not show as much in your taxable income. Let’s say all of your income is in qualified retirement accounts. If your money is in tax deferred accounts, that means laying low and not withdrawing as much money pre Medicare in order to qualify for ACA and living life later.

Or that means planning ahead and converting more of your retirement funds to Roth accounts because withdrawals from Roth accounts do not count towards your taxable income. adjusted gross income. Once we have medical expenses factored, we can incorporate that into all of our other living expenses.

Mortgage, car payment, groceries, things like that. I call this your minimum dignity floor. How much money does it take to live? We need a way to make sure these expenses are covered whether that’s from fixed income like a pension or social security or an insurance product. or mapped out plan to make withdrawals from our portfolio or a combination.

Since you are retiring early, income from social security may not be on the table if we are choosing to delay our social security to increase our benefit. One option could be to purchase a SPIA or single premium immediate annuity. This insurance product is bought at all at once. and begins paying out immediately a specified amount for a specified duration.

Maybe that’s just enough to cover your dignity floor until social security is taken as an example. Another option is to simply fund your minimum dignity floor from your portfolio. Now, since you’ve chosen to retire early, it is that much more crucial to stick to a retirement income plan for your portfolio to weather down markets and maintain a work trust to live off of.

without running out of money over a 30 or 40 year or longer retirement, while also maintaining purchasing power into the future. A plan such as creating investment buckets within your portfolio as a rule for your investments and creating a withdrawal strategy like our guardrails approach to create a rule for retirement income.

Our buckets break up the style of investment into three types, along with duration for each type. These are specifically crafted to weather long term down markets like the 2008 crisis, which was about five years from peak to trough to peak, as well as setting up your portfolio to maintain purchasing power into the future.

Now, once you have your investment set up to withstand down markets in a multi decade retirement, you must create a rule so that you know how much you can spend Without running out of money, our guardrails approach to retirement income creates a bit of a dynamic income strategy, but with this approach maintains buffers around upper and lower guardrails to ensure we will not run out of money and also allow room for giving us raises due to inflation or portfolio performance, as well as variable expenses.

These guardrails prove to be extra useful in a longer retirement. When we have more potential for more long term down markets. and the need to supplement social security because we are delaying social security. We may need to evaluate withdrawing more money from our portfolio today that would otherwise be satisfied by social security, and then taking less money out of the portfolio in the future when we claim our benefit.

Upon doing your first calculation on paper, it will likely appear that you are withdrawing more money than you can safely take out. That’s why it’s critical to run a number like this through a financial planning software So you can know how much you can withdraw without running out of money and to create a specific social security claiming strategy To know when you will claim this money and how that will even out your portfolio cash flow.

So take action Again, the most important thing here is your goals. What will you do to make sure that you retire to something and not from something? One thing I will tell people to do is after you create your retirement plan and you have all of your expenses covered and retirement income strategies in place, you could perhaps draft up your two week notice.

Fold it up and carry it around in your pocket. I usually find that this empowers people to a greater level and they don’t feel the need to rage quit as much. Or if they do decide to rage quit, well, they have that notice folded up in their pocket ready to go and they’re playing a place. But please draft that plan first, draft your notice, and then go from there.

Remember to subscribe to our YouTube channel. And if you have any financial questions, you can send them to contact at bocaretirement. com. Enjoy your successful retirement and thank you for watching. Before you go, if you’re looking for a free tech smart retirement plan tailored to your unique specific situation, you can head over to our website.

So if you have any questions about this, feel free to contact us at contact at bocaretirement. com. Enter your information in the pop up and we’ll build you a plan tailored to your unique specific situations at no cost or obligation. If for some reason that pop up doesn’t show for you, if you click out of it, no worries.

Just send us an email at contact at bocaretirement. com. Again, that’s no cost, no obligation. We’ll put together a simplified plan for you to help you take the next steps towards a successful stress free retirement with more money and fewer taxes. See you over there.