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Investment Services, Financial Planning

Retire On Your Terms

There are a few things you need to think about before retiring early.

Retiring early isn’t just a pipe dream, you can make it happen with preparation, planning, dedication, and focus. Most people used to think of retirement age as 65, but with the latest COVID-19 pandemic, people are rethinking their priorities. The idea of a work/life balance has changed. Many people have switched gears to thinking more about freedom from the daily grind and having the flexibility to pursue more meaningful opportunities. Others may not want to work full time and instead may want to pursue another field with part-time work. Before turning in your final notice, there are a few things you should consider before retiring early.

Life Expectancy

People are living longer now than they have in the past. According to the Social Security Administration, a 60 year old man, on average, has a life expectancy of 83, while a woman this age has an average life expectancy of 86. These numbers are based on statistics and individuals need to take other things into consideration, such as how healthy they are, family medical history, and other factors such as ethnicity, marital status, and whether or not the person smokes or drinks.

Funding a Longer Retirement

With longer lifespans, people have more time to enjoy retirement. People want to be financially comfortable and able to do a variety of things like travel, visit family and friends, pursue hobbies, volunteer at a meaningful charity, or even check items off of their bucket list. So how much money does this all add up to? A good rule of thumb is to expect you’ll have to replace between 75%-80% of what your pre-retirement income was.

While Social Security can help fund a portion of what you need, you’ll have to be at least 62 before you can start drawing. If you choose to draw at 62, you’ll get less money each month than if you choose to wait to take the full benefit at age 67 (for anyone born in 1960 or later). So if you choose to draw early, your own retirement plans, savings, and investments need to make up the difference. Retirement plan distributions can start at age 59½ with no early withdrawal penalty. Most financial advisors recommend not pulling more than 4%-5% annually from the plan in order for it to last at least 20 years. If your life expectancy is longer than 20 years from the date you start pulling funds out, you should consider taking less of a percentage out yearly.

The Rising Cost of Healthcare

In most cases, once you leave your job, any employer sponsored healthcare benefits end. COBRA coverage is often available for a short time once you leave, but it can be costly. You need to be at least 65 before you can receive Medicare benefits, but if you need coverage before then, you’ll need to get an individual plan through state healthcare exchanges or private insurance companies and pay the rates yourself. This can be costly, and that cost goes up if you’re covering yourself and a spouse or partner.

What Exactly Will You Do?

Many people dream of retirement, but when the time comes, they aren’t sure what exactly they’ll do. Before retirement, most people work five days a week for 30 plus years and some people don’t know what to do with all the new free time they have. Is there a hobby you’ve been longing to try? How do you know you’ll like it? A lot of financial planners suggest their clients try new things prior to retirement. Whether it’s volunteering or learning to paint, it can be beneficial to try it before you plan on spending a good amount of time doing it after you retire. By trying new things before retirement, you’ll have a better idea of how you want to spend your time.


Retiring early may seem like a big mountain to climb, but it’s not impossible to do it. You’ll need to focus on realistic trade offs and start to save as much as possible now. With the right plan in place, you can make your dream of retiring early a reality. Our Financial Advisors can help to plan your savings so that you’ll be financially prepared to enjoy retirement.

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The financial advisors of Orange County's Retirement & Investment Services are registered with and offer securities and advisory services through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/ SIPC). Insurance products are offered through LPL or its licensed affiliates. Orange County's Credit Union and Orange County's Retirement & Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Orange County's Retirement & Investment Services, and may also be employees of Orange County's Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Orange County's Credit Union or Orange County's Retirement & Investment Services. Securities and insurance offered through LPL or its affiliates are:

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