Retirement for most – or at least when you can withdraw social security benefits – is anywhere between 62 and 70 years of age. If you decide to pull from your benefits early, they will reduce by a fraction of a percentage until your full retirement age, which is age 67 for anyone born after 1960. So for most, retiring early is not an option, especially when 55% of Americans have less than $10k saved for retirement.
But what happens if your goal is to have financial independence a lot earlier than the normal retirement age? There are many opinions on this subject, with online forums promoting this hard-to-achieve aspiration, and others providing a point-of-view that shows early retirement may not be as attractive as it sounds. Before you make any decisions on your retirement strategy, ensure you have done your homework with a clear understanding of both arguments.
Beat Declining Odds and Retire Early
If you type “retire early” in your search engine, you are guaranteed to find a wide-range of sites that give you the best tips and tricks to accomplish what most cannot do to secure finances to live comfortably before the normal retirement age. But many soon-to-be retiree hopefuls do not realize the impact social security has on their retirement income. In fact, according to the 2018 Retirement Confidence Survey, “36% of workers have said that Social Security will be a major source of their retirement income, however, 67% of those already retired say it is in fact a major source.”
Do not be discouraged, as early retirement is still achievable. However, it is important to understand the financial impact of prematurely withdrawing social security benefits when you no longer have active income, and why putting together a plan that compensates for any financial deductions is crucial. Here are a few tactics we think you should investigate to help secure your financial wellbeing faster than the average retirement target date.
Financial Independence Does Not Have to Translate to Early Retirement
There is a perception in our society that early retirement means no more stress, especially when it comes to work. You are now free to live life as you please without worrying about that 9-5 job. This may not always be the case. A recent article, Why you shouldn’t retire, even if you can, outlined financial advisor insights, including some of the following considerations:
Retirement can seem daunting, especially when you start the planning process. But financial independence can be achieved, especially if you have a trusted advisor helping you along the way. Our goal is to support you with the right knowledge and tools to put together a financial strategy for your future and to help achieve your retirement goals. Please contact us today and we would be happy to talk with you.
This information does not purport to be a complete description of the developments referred to in this material. Links are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.
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