Pulling the Levers of Early Retirement Planning
Let's talk about early retirement.
One of my favorite things to say in a client meeting is: Did you know that you’re now "work optional"?
The other week, I had the pleasure of saying just that.
My client is a successful attorney, and he loves what he does. But his job is very high-stress.
When he and his spouse started working with me a few years ago, his big focus was on being financially independent. I like to call this being work optional.
The great news I got to share with him is that he can retire in 2024 if he wants.
Naturally, he was glad to hear it.
"But what if we buy a second property for $750,000?" he asked.
Great question! So, we evaluated some trade-offs.
I had built into the plan the ability to switch between different scenarios.
We adjusted the retirement year to be 2023, 2024, 2025, and 2027.
Then, we increased the annual retirement spending to $80,000 and $100,000.
We looked at adding a $750,000 purchase into the mix.
And we had a 40-minute discussion about how these different levers would affect his
ability to retire successfully.
Honestly, this kind of conversation is the most fun I have professionally.
Ultimately, I told them I wouldn't recommend retiring if an additional property is a
priority.
If they could wait until 2027 to retire, then it might make sense to purchase a second property.
He was always planning to work for a few more years, but he wanted to know that he was financially independent.
There’s a feeling of security and freedom that comes from knowing that work is entirely optional.
So, did they buy the second property?
They might – but they also might not.
Honestly, I think they just wanted to know whether it was possible.
Now, my client goes to work every day, knowing he can retire anytime. That is a profoundly liberating thing.
If you’d like to partner with an advisor who can help evaluate trade-offs and plan for your future, get in touch.
About the Author
Michael Urch
As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance, investment, retirement income, tax, and estate planning. He prides himself on being a professional advisor who puts planning before products. Michael likes to start with each client’s “why.” By understanding what’s truly important to them, the “what” of investment and planning strategies can be custom-designed to support their long-term ambitions.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing.