Loaded Questions: Can I retire early?
Watch the video here.
Hi, I’m Christina Gamache, founder of Audax Wealth Management. I’m not your typical financial advisor. I don’t earn a commission on any products that I recommend because I don’t believe in having a conflict of interest. I work with business owners, women and minorities. I help clients organize their financial priorities so they can take care of the things that matter the most to them.
I’m recording this video series to give you short answers to loaded questions. I’ve been hearing the same questions being asked over and over this year, so I wanted to address these questions in case you are someone who is also asking. Each week I’m going to post a video answering a new question. Most of the time when someone asks me a question, they oftentimes already know the answer to it, but they want to verify with an expert. I am here to be a sounding board for you and put some of these financial topics into perspective and in language that doesn’t go over your head.
The number one question I received from clients this year is “Can I retire early?” Whether it’s because of an early retirement package being offered by an employer, because a business owner is burnt out, or something significant happened in 2020 and they can no longer work. As a financial planner and a fiduciary, I have three thoughts that you may want to consider if you are one of these people asking this loaded question.
First, we always start with your goals. What are your long-term goals in life and with your finances? I would ask you questions like, “how much do you need to live on in retirement?” What kind of lifestyle do you want to have? “How are you going to pay for healthcare between now and age 65? What other goals do you have in mind? Travel, kids education, snowbird home?
The second thought is this – what assets do you have and what job are they performing in your portfolio? What are your taxable and non-taxable assets? What are your income assets? What’s your estimated social security, pension, other income producing assets (stock dividends, annuities, rental properties)?
The third thought is this, what’s the gap between what you need and what you have? Do you need to adjust some of your goals? Most of the time people already know that they will retire early. Sometimes this means going on a luxury vacation every 3 years instead of every year. Sometimes when they put pen to paper, they realize that they have enough to add additional goals like leaving a legacy for their children or buying that car they’ve always wanted. The point to these questions is that you can’t know exactly how it will all work out, if you don’t have a formal plan in writing. Getting a financial plan is paramount to your success and can show you whether or not you run out of money or have enough to last throughout your lifetime and beyond. Sleep
So, three thoughts about whether or not you should retire early.
1. What are your goals? How much will they cost?
2. What are your assets to reach these goals? How do your assets work to reach these goals?
3. What’s the gap between your goals and your assets? Do you need to adjust your plan?
If you would like to talk to me about it, at no charge, send me an email, give me a call, and I’m happy to walk you through this exercise or answer any other questions you may have.
Thank you for watching. See you next time.
