Early Retirement Requires Different Planning - Ep #119

If you plan on retiring at age 65, you can just follow the traditional playbook, which is as follows.

Max out your 401k, pay down your mortgage, start dialing down the risk in your investment portfolio as you approach the most dangerous years of investment, the years just before and after retirement.

And you should also ensure your estate plan is up to date and in place.

These are all rather logical and straightforward planning strategies.

But retiring in your 50s and even early 60s requires a very different type of planning because of the unique challenges one has to face.

Some of those challenges can include the following.

You can't access retirement accounts without penalty until age 59 1⁄2.

Now, the earliest you can start Social Security is 62, and Medicare coverage doesn't start until age 65.

Those are three major financial retirement systems with limited to no availability before 65.

When most people look at those challenges, they believe that an early retirement is just not possible.

Now, some are still brave enough to consider retiring early, but might believe that it will require them to pay extra taxes via penalties.

and have terrible and expensive health insurance.

Financially on the surface, it can look that way, but both of those beliefs are just not true if you employ better planning, which can lead to a much better life in early retirement.

With better planning, you can avoid the extra taxes and enjoy good health insurance coverage at a reasonable price.

And it's not just because the gaps don't exist, because they certainly do, but rather it's because every single one of those challenges has a possible better planning solution.

However, those better planning solutions need to be created in the years before early retirement and not after.

For those that wait until after their early retirement or only a short time before, they realize that just a few adjustments years earlier could have made their early retirement much easier and much less expensive.

Now, they may have accumulated brilliantly, but for early retirement, they've positioned terribly.

So just how to position yourself better for an early retirement? Well, there are five strategies that are critical.

But before I share what those exact five strategies are, let me first share a compelling reason why many should want to consider planning to retire early and it doesn't get nearly enough attention in retirement planning.

Now, the compelling reason is your health because there is a huge difference between lifespan and healthspan.

Lifespan is how long you live.

Healthspan is how long you live well.

Your healthspan is when you are mobile, active, energetic, capable of doing all the things you dreamed retirement could be.

Many call this phase of retirement the go-go years.