7 Steps To Check Off Before Retiring Early

And I wanna make sure . Healthcare and tax strategy and where do I pull income from ? That's what today's going to be all about . What are the steps to make sure you didn't miss anything , so you don't retire and go shoot . I should have looked at this . Why didn't I think about that ? And really it's . So you have the confidence , when you do retire , to go .

I am not missing anything and I'm fully confident . I'm in a great spot . So , with that being said , what I'm gonna start with today ? If you are new to the podcast , welcome . I do these episodes on the podcast app as well as on YouTube , so if you're watching on YouTube , you can , of course , see me Now . I'm a checklist guy .

I like checklists , it's fun . You're gonna see on my screen and I'm gonna explain it as well for those listening . This is a fun checklist and you can see it's titled what issues should I consider before I retire ? And there are a lot . This is the full checklist that I go through with clients . So , everything from well . Your cash flow needs change .

Will you receive a pension ? How does social security get impacted ? Are you married ? What if there's inheritance ? There's so many different things . This is the full checklist . What if there's inheritance ? There's so many different things . This is the full checklist . Now you can get access to that inside of the Academy .

Now , today , I'm going to give you my seven key steps . And these are the key steps because some of these on this checklist here they're good . But if you see one of these here , are you disabled ? If so , you might be eligible for certain benefits . Well , many of you are not disabled , so that just doesn't apply to you .

I want to give you the most hard-hitting steps and we're going to hop right in . So , number one , and a lot of what I'm going to go through by the way , I know I hate these little disclaimers before this , but a lot of what I'm going to go through .

I'm going to use real examples from my clients , but please know it's all for fun , informational , educational purposes only . Okay , guys . So number one how much money do you need ? Well , it's easy , right ? Some of you are like I just need enough to spend $10,000 a month in retirement . Is that after taxes ? Is that adjusted for inflation ?

Well , yeah , but what if it turns out I want to spend more ? Well , that's what I call head trash , which I hear a lot . And the way I'll do it with a client . They'll say how much do you want to spend ? And I won't add any more color . Some of you are like you always add color after you ask a question , but sometimes with clients I don't .

So I will say how much do you want to spend ? And I pause because sometimes they'll say oh , I mean maybe 10,000 a month , but I have a mortgage right now , so that's another 2,000 . And I'm going to have health care , but that's not forever , just the first few years . And so I'm seeing them really kind of explain their thoughts .

Versus someone else might say 10,000 a month with no more color . I'll say great , is that 10,000 a month forever ? Is that a short period of time ? What does that mean ? And so the point here is how much do you need ? Well , this is going to be a dynamic thing , and don't get into the paralysis , analysis or analysis , paralysis I forget whichever one it is .

But don't get so into it that you go . Well , I don't know what if it turns out . I retire and because I have more time , I want to travel even more than I'm projecting . Because I'm projecting $20,000 a year . But what if it turns out I want to spend 40 ?

Well , maybe I'm just going to work two more years just in case I want to travel more than I thought . I'll see people do that all the time . I'm going to do one more bonus , because what if markets go down ? And then one more , one more , one more . And then your spouse is like you've been saying one more for 10 years .

Now , are you ever going to retire ? I want to spend time with you . So how much do you need ? Get a piece of paper , use a software I don't care if it's mine or any of them and really think about what would you love . So step one is truly dreaming big . Really go and say would I want to go to the World Cup final ? Now , be realistic here .

Don't like me , put buy Arsenal Football Club okay , because that's an unrealistic goal , but please do go dream big to the point where you go yep , 30,000 a year on travel . What if my kids get no scholarships ?

What if it turns out that my spouse doesn't want to travel but I still do , and so when they're home , they're going to want to go on more spa days with their girlfriends . Okay , great , like , put that in there . Maybe it's the opposite You're the big traveler and you're like but I need to budget more because my husband might play golf all the time .

Okay , put that in there . But anything buying new cars , vacations , weddings are we going to downsize Almost like write out your dream life ? I know I want you to do this before you look at your assets and what it could create , but this is how I prefer to do it . That's step one . Step two is are you going to truly stop working ?

And for some of you , this is an easy one . You go , yes , financially , if I don't need to keep working , I am done . Others of you go no , no , no , I'm not going to do nothing . I'm just going to work way less . I'm going to enjoy it way more .

I'm going to ask for Fridays off or my schedule is flexible , and so I'm going to do something else , because 55 is too early to just do nothing . I don't want to sit on the couch . Maybe I do a side business , but what if it doesn't end up doing well ? I don't want to rely on that . So these are things to think about . I'll give a client example .

One of my clients wants to go sell jewelry on Etsy . That sounds fun . Now , if they do not get any sales , their plan is totally okay . So the reality is that's just extra bonus and they're not going to do nothing . So I can already tell you for this client we're going to call her Jane .

If Jane stopped selling jewelry , she's going to do something else , because I know Jane . So any extra buffer there .

If it turns out she wants to travel more or gets worried about healthcare costs , even if it's unnecessary , she's a human and when markets go down , even if her portfolio goes from two and a half to 2.3 million and she might not feel great , she goes look , I know I'm going to be okay . She's just working because she wants to work in the same way .

I don't think I will ever stop . Now , that's what I say today . Life changes . You just never know . So because of this , I'm Think about who you are . Are you the person that's going to be like I'm done . When I'm done , that's it . Or are you going to be the person that's like I'm probably gonna do something ?

I just don't know what it is , because if you're probably going to do something , it's a big deal . Why is it such a big deal ? Well , I had a client that came to me and said you're really not going to be happy with me . I said why ?

They told me that they are only going to bring in 40,000 a year and the year before they told me they were bringing in 250,000 . And I said I'm pretty happy . And they said that's weird . Are you just like trying to be a nice guy here , because normally you're super transparent ?

I said look , you bringing in 40,000 , that helps way more than you think because it allows your portfolio to keep growing , which means it can keep compounding . So you making $40,000 and using that for your travel budget means that's 40 less thousand dollars I have to send you from your portfolio , so your 2 million doesn't become 1.96 .

Now , all of a sudden , that 2 million grows at 10 percent , that's a $200,000 . That's a significant difference because we didn't have to pull from that . So any day , any day , any week , any month , any year that you keep working , it really helps the plan , which is what causes a lot of people to go .

I'm just going to keep working a little bit more because I see how helpful it is . But then there's a point where you go . How much is really enough ? Which leads me to step three . What other income sources are going to help you ? Social security , pension , inheritance , rental income . Factor those in .

If you want to spend 10,000 a month the first year of retirement , but 4,000 a month is coming in from a rental property , you only need six to come from your portfolio . So what a lot of people do is they go . Maybe I don't spend too much in the first few years of retirement , because what if I run out ?

I don't want to run out of money ever , so I'm going to underspend . And then what happens is they have $4,000 coming from rental income , they have $3,000 coming from social security and then another $3,000 that's coming from inheritance .

So like there becomes a point in the future where , theoretically , if their portfolio went to zero , they would meet all of their goals . Now the reason for the example here is I don't want this person to go . I don't want to spend my money because it's all up to my portfolio before Social Security starts helping out when they're in a fine spot to do it .

So , yes , understand what other income sources are going to help you , because it might mean you need to save way less than you think , which means step four how are you saving new dollars ? Today I just spoke with a lovely couple and they have about $3 million in their 401ks .

They actually live very close to our San Diego headquarters and they're super nice people , but they've saved and invested too well . They've been the on-paper good financial students who sometimes it's cringe when people do this . By the way , I felt a little cringe If you can't see me because you're listening on the podcast app .

I'm doing the quotation marks here but they were really good people . The thing is they were good students and what I mean by that is they were like I've been told from the time I started a job to put money into my 401K , because that's what I do , that's what we do as a family .

So they put money in and they put money in , and now here they are and they're in their 50s going . Maybe we should stop working . I feel like we have a good amount of money and the job has changed , so I kind of want to stop , but most of their money is all locked up , so they can't really get it without paying penalties and taxes .

So I told them guys , you did a great job and if you had a million fewer dollars , what I'm about to tell you you should not do . But you don't . You have 3 million plus in assets in your 401k .

You should really consider strongly stopping adding new money to your 401k beyond the employer match , because that's free money Hard to say no to that and any additional dollars should go to that superhero account , the brokerage account , because that's going to actually help you retire earlier .

It's almost like I don't need you getting more tax benefits with a deduction from your 401k . I don't need you adding more tax deferred dollars . I need you to get flexibility . So if you want to stop in two years when you're 53 , you can do that . So for your situation , look at this sample .

So I made up a phrase it's called QRCP qualified rich , cash poor . It's not a real thing , I just made it up . But house rich , cash poor . Many of you have heard of that before where you have a lot of equity in your home but not a lot of liquidity . That's my parents . They have a $6 million home in Malibu . They never want to sell .

They want to stay there forever , so they are going to keep that home and it's never going to help bring an income . The difference is they love it and they're willing to work longer , and many of you know this . But they were burned by four financial advisors not burned by all of them , but many of them .

Some of them just , let's just say , less than optimal me being nice here and so they're working in their 70s . They'd rather not be working at the pace they are in their 70s , but they're doing it because they like Malibu . They could sell and go somewhere else , but they don't want to . That's house rich cash poor .

These clients I just told you about are qualified rich cash poor . Most of their money is in their 401k . They need some other assets to help out . The next one , which is number five how much do you want to leave behind ? If you have not read Die With Zero by Bill Perkins , go check it out . It's an amazing book .

But some of you are like I want to leave five million to each kid . Some of you go none . I want to die with zero Great . You guys should have very different retirement plans and retire at very different times .

So make sure that's where I really do like my software , because it does a good job of being able to show you hey , here's exactly how much you can spend and here's exactly when you're going to pass away . If you want to plan on 100 or 95 , based off your investments growing , this is what it would show . Next one is how are you going to invest ?

Meaning , what is the experience you're looking for ? Some of you do not get bothered . When markets go up and down , you go look , yeah , I get that equities grow stocks more than bonds over the long term , and so I've been doing that for 30 years anyway , it doesn't bother me .

I'm happy to keep investing this way , knowing there's going to be volatility if it means I'll have more at the end . Others of you are like no , I was doing that while I was working , so I was comfortable , but now I don't want to see my portfolio go down 40% because I don't have as long for that to recover .

So I'm going to sleep better if I never go down more than 15% . Great , you guys should have two very different retirement plans .

That first person , who's more willing to accept volatility , they might be able to spend more money because markets might be doing really well , but they have to be willing to accept a time where they might have to spend less money when markets are down by a lot Versus another couple might go look , as long as I kind of have my basics and I kind of deviate

from that slightly , I'm fine . So it's just up to your experience . Are you going to lose sleep if your portfolio is down 30% ? Some of you are like I don't even know when it is because I'm not going to check that .

So there's also a study , by the way , that's proven , that people who forget their passwords end up having a better portfolio over the long term . Interesting Last step here , number seven . It's kind of like number one , which is like how much money do you need ? But really it's what is your definition of success ?

Because some of my clients definition is hanging out with family and that's it and that's sufficient for them . Now , I love my family , but that's not enough for me . I need to play soccer . I need to play soccer . I need to be healthy . I need to work out often . I need to be able to cook . There's a lot of fun things I need for stimulation .

Now , call me high maintenance or call me whatever you'd like , but I have high standards for the life I want to live . If you told me I could no longer work at Root anymore , I'd be really sad , because this gives me a lot of stimulation and I feel like I'm really doing a big purpose for the world .

Doing a big purpose I don't think that's real English there the way I said that , but you get my point . So for you , you might go I really want to volunteer and then do it and you might go . This feels like a job . You might actually go do it in like a different job that you thought was going to be super kind of laid back .

You're still with coworkers , but it's once again feeling more like a job . You might be doing a job that once again feels like a real job , versus what you were hoping it to be , which was more of a kind of laid-back , part-time , you know , hang out with coworkers kind of a thing .

Now , not a lot of people do that , but I do have some clients that work a stressful job and then go work at Starbucks because they're like I just wanted something less stressful . And I only say Starbucks because my first thought was like that is not stressful .

I mean , that is extremely stressful , trying to get the exact drink right and people complaining and the names and the this and like . It seems stressful to me . It seems harder than what I do , to be honest . So just think about , like , what is your definition ?

Now , I've got all these tools and academies and things to try to help you figure all this stuff out . You can check that out in the description of this if you're watching on YouTube , as well as the podcast app . I hope this was helpful . These are seven steps for you to retire early with confidence , with success .

But , guys , I make all of this for you , so tell me which one resonated the most . My goal is , after every episode there's something that you take away , where you take action , where you go yep , that I'm going to stop saving to my 401k . This clicked what you just said there .

Or you know what , for the first time , maybe I sit down and I'm going to write it out . Dream it . I mean everything . Am I taking cruises ? How much are those going to cost ? And then kind of using a software , or you could use Excel , but I prefer a software because it's your life is easier and then you can see what you're on track for .

So that's what I would encourage for everyone If you're five years out , one year out , 30 years out from retirement . And that's all I got for you guys . See you next week . Thank you for listening to another episode of the early retirement show . If you have a question that you want answered in a future episode , you can always go to my website .

If you have a question that you want answered in a future episode , you can always go to my website , earlyretirementpodcastcom . That's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening .

Please do rate it , review it and share it with someone who you think would benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . For informational purposes only . Hey guys , it's me again . Please be smart about this .

Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or financial advisor before taking any action in this podcast . For informational purposes only . Hey guys , it's me again . Please be smart about this . Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer .

If you have a question that you want answered in a future episode , you can always go to my website , earlyretirementpodcastcom . That's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening .

Please do rate it , review it and share it with someone who you think will benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . Thank you , hey guys , it's me again . Pleasebesmartaboutthiscom , and you can go ahead and submit a question that I'll look to answer in a future episode .

Consult with your tax preparer or financial advisor before taking any action . This podcast is for informational purposes only . Hey guys , it's me again . Please be smart about this , and I will see you all in a tweet . Thank you for listening to another episode of the Early Retirement Show . Consult with have a question that you want answered in a future episode ?

You can always go to my website , earlyretirementpodcastcom that's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening . Please do rate it , review it and share it with someone who you think would benefit from this information . Hey guys , it's me again .

Please be smart about this . I certainly appreciate it and I will see you all each week . Thank you for listening to another episode of the Early Retirement Show . If you have a question that you want answered in a future episode , you can always go to my website , earlyretirementpodcastcom .

That's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in a future . Hey guys , it's me again . Please be smart about this , if there's anyone out there that you know as financial , tax or legal advice each week . Thank you for listening to another episode of the Early Retirement Show .

If you have a question that you want answered in a future episode , you can always go to my website , earlyretirementpodcastcom . That's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in any future episode . Thank you all for listening .

Please do rate it , review it and share it with someone who you think would benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . Thank you for listening to another episode of the Early Retirement Show . If you have a question that you want answered in a future episode .

You can always go to my website . Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or financial advisor before taking any action . This podcast , that's early retirement podcastcom , and you can go ahead and submit a question that I'll look to in a future episode . Thank you all for listening .

Please do rate it , review it and share it with someone you think will benefit from this information . If there's anyone out there that you know , consult with your tax preparer or financial advisor before taking any action . Thank you for listening to another episode of the Early Retirement Show .

If you have a question that you want answered in a future episode , you can always go to my website , earlyretirementpodcastcom . That's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening .

Please do rate it , review it and share it with someone who you think would benefit from this information . It's me again . Please be smart about this . Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or financial advisor before taking any action . This podcast is for informational purposes only .

Hey guys , it's me again . Please be smart about this . Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or finance advisor before taking any action , and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening .

Please do rate it as you enjoy it with someone you think will benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . Thank you for listening to another episode of the Early Retirement Show . If you have a question that you want answered in a future episode , you can always .

This podcast is for informational purposes only . Hey guys , it's me again . Please be smart about this . Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or financial advisor before taking any action . This podcast is for informational purposes only . Hey guys , it's me again . Please be smart about this .

Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or financial advisor before taking any action . I certainly appreciate it and I will see you all each week . Thank you for listening to another episode of the Early Retirement Show .

If you have a question that you want answered in a future episode , you can always go to my website earlyretirementpodcastcom . That's earlyretirementpodcastcom , that's earlyretirementpodcastcom , and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening .

Please do rate it , review it and share it with someone who you think would benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . Nothing in this podcast should be as true as you all each week . Thank you for listening to another episode of the Early Retirement Show .

If you have a question that you want answered in a future episode , you can always go to my website . Early Retirement Podcast is for informational purposes only . Hey guys , it's me again . Please be smart about this . Nothing in this podcast should be construed as financial , tax or legal advice .

Consult with your tax preparer or financial advisor before taking any action .