Is Early Retirement a Reality?

Share This:

We all desire the flexible lifestyle, to not work or work when we want.   Wouldn’t it be great to spend more of our lives not working than working?  There have been countless financial plans created with this target in mind, but it may not be reality to stop one’s career before reaching the full retirement age Social Security has set for us. 

Early retirement won’t be an option for many as most American’s haven’t saved enough for retirement-and may never.  The median retirement savings balance for US adults aged 56 to 61 is $17,000 according to the Economic Policy Institute.  That’s not even enough to cover a year’s worth of food and utilities in retirement! 

What could we be doing better to increase the possibility of more American’s having the ability to retire early?  Saving!
You may be preparing to retire early or on time if you’ve been saving consistently and planning.  If this is your situation, congratulations!  To be sure your early retirement is a reality, consider these facts:

  • Leaving the workforce before full retirement age (according to Social Security) stops 401(k) contributions, Social Security Accumulation, and employer health insurance benefits.
  • Drawing pre-tax retirement savings before age 69 ½ results in an IRS penalty, further depleting your savings.
  • Health Insurance will now become your responsibility to pay as you are not eligible for Medicare until full retirement age.  Even when you’re able to use Medicare, it doesn’t cover everything, and you still need to pay for additional coverages like dental, vision, prescription, and a percentage of costs for all medical service.  Medicare is not that great of coverage- ask a retiree!

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.

More
Articles