Episode 44: Income Ideas For Retiring Early (Part 1)

Here are just a handful of the things that you’ll learn:

There have been so many interesting articles floating around lately on how the COVID-19 pandemic has affected retirement. Some of these statistics are absolutely astonishing!


Recent research has found that millions of Americans who lost their jobs during the early months of the pandemic have decided to call quits early.  (Market Watch article in May of 2020.)


Before COVID-19 came along, people over the age of 55 represented 25% of the American workforce. There were more workers over the age of 55 than under 30. In the course of just a few months, that ratio reversed!


In this 2 part series, we’re going to layout some ideas for Retiring Early and discuss 6 steps to consider, just to get started and wrap your head around this idea of Retiring before you originally planned!


Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you’re a client I can’t give you advice because I don’t know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser…………. right? that’s just common sense.


(1:20) Practical Planning segment: We talked about how the ratio has basically reversed…where older Americans are retiring early, and now younger Americans make up more of the workforce. the direct result of COVID-19


Even if the younger workers had hours reduced or maybe have been laid off, they are seeking and plan to resume work in the future. The future is not so rosy for mature workers. We don’t know what the normal on-site work environment will be like a year from now.


  • Will we still be social distancing for example,
  • have the vaccines worked and things are 100% back to normal.
  • Are restaurants and theaters open again at full capacity?
  • I presume the answer may be somewhere in between.


Those over 55 may not want to take chances with their health and they have been saving for decades. They’re not about to miss an opportunity to enjoy retirement just to work out a few more years in an unsafe environment. So, they are thinking about retiring early!


(4:30) Unfortunately, not everyone is in a position to retire right now, at least not the way they originally planned. However, if you find yourself considering early retirement what are some of the steps you should consider to get started.


  1. Calculate your annual retirement income needs. In other words, do a budget
  2. calculate your net worth based on current assets and liabilities
  3. (6:20) check out your SS and if you have a spouse their level of SS based on different ages that you can begin drawing on them.
    1. link to watch a replay of our Social Security webinar
  4. estimate how much savings you need to have for the latter stages of retirement such as the cost for health care and long-term care assistance
  5. consider what portion of your portfolio you need to keep invested for long term growth
  6. consider your appetite for various forms of risk


(8:15) We have identified 4 forms of risk you need to discuss:


  • (8:35) Market Risk
    • Can you tolerate day to day market volatility throughout retirement?
    • Riskalyze as a very good tool: Go to our website and take the risk assessment


  • (10:35) Sequence of Returns Risk
    • How will a drop in the market shortly before retirement or right when you retire impact you?
    • Example:
  • (13:50) Inflation Risk
    • Can you live on a fixed income with no raise from the next 30 to 40 years?
    • The answer to that question of course it depends on your assets but remember if you retire early, the money has to last much longer.
    • Inflation is real and it is a silent income killer. It sneaks up on all of us without even realizing is there.
    • Inflation Calculator:
  • (16:00) Longevity Risk
    • What are the chances you might outlive your assets?
    • I can imagine some of the life tables from the insurance industry and Social Security may change based on COVID-19 19. I don’t know that for sure, but we’ll see what kind of effects this has on overall morbidity
    • But statistics prior to COVID-19 show that we were living much longer. For example, if you’re a married couple and reached the age of 65 there’s a 60% chance that one of you will reach the age of 90.
    • This must be planned for.


(17:35) Coachable Segment: What I simply want you guys to do today is go through those six ‘get started’ items. And write them down.

  1. Number one calculate your annual income needs do a budget!
  2. Calculate your net worth assets and liabilities hopefully that would be easy for most of you
  3. go to and pull your most recent Social Security statements for both you and if you’re married your spouse.
  4. Estimate how much savings you need for later stages of retirement. The best way to do this to just assume the average stay in a nursing home or long-term care facility. Is about 2 1/2 to three years. At the current rate of let’s say 10,000 per month, you’ll be able to figure out how much you will need for LTC. Don’t forget to account for inflation!
  5. Number five and six combined is go to the website and take the quick risk questionnaire and determine your risk number. This will give you a really good idea of what kind of risk you can tolerate and how much of your portfolio can be invested for long term growth to fight inflation.


On our next episode we will give you ideas on how to create “bridge income” This is income you need to bridge that gap between retiring later vs retiring early! Unfortunately, that may mean tapping assets that will reduce your nest egg. However, there are ways to avoid depleting assets, or at least eliminating early withdraw fees attached to some retirement accounts.



Final Disclaimer:

“We appreciate you joining us today for this episode of The Fiscal Blueprint.

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Remember it’s not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

“Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment.”