Everyone dreams of throwing away his or her alarm clock, saying goodbye to early morning commutes and, instead, waking up to leisurely read the paper, sip fresh coffee and pursue his or her life's ambitions as an early retiree. Yet few take the necessary steps to prepare themselves for early retirement.
Although many may feel the notion is far fetched, taking charge of your future and retiring early may be easier to do now than ever before thanks in part to recent changes in tax legislation, particularly lower tax rates on long-term capital gains and increased contribution limits for qualified retirement plans.
However, it takes more than a few tax breaks to trade a 9-to-5 workday for lifelong dreams. If you want to retire early, you will need a disciplined plan ... one that takes into consideration how you will fund your retirement years, including all the important tax issues involved in accessing retirement savings.
As an early retirement plan specialist, I begin developing customized written plans for clients like you by first listening to you like you are the only investor in the world. My objective is to understand your objectives, risk tolerance, time horizon and any unique circumstances surrounding your family. Then I will develop an early retirement strategy designed to help you reach your goals.
One of the most important steps to retiring early is to invest as much as you can as early in your career as possible in tax-deferred plans, allowing the compounding of interest and dividends to work its magic. Our initial tasks, then, will be to select the best alternative available to you for tax-deferred retirement investing, establish annual investment goals, develop a comfortable asset allocation model for disciplined diversification and select investment alternatives that will reflect your early retirement plan.
In addition, we will monitor the tax implications of accessing your funds at retirement, as well as implement tax planning strategies now in an effort to help maximize your available cash for investing. Because tax law continually changes, this is an ongoing process that can require periodic adjustments in an early retirement plan.
Finally, we develop and refine retirement living assumptions to ensure that your plan has the potential to meet your needs. Some of these assumptions include provision of medical insurance coverage and long-term care, the treatment of mortgages, funding children's college expenses, estimated annual income levels, when to begin taking Social Security benefits, how much cash should be kept in reserve for emergencies and estate planning