53-year-old Couple Retires Early with $8k/month (and no penalties)

(don’t forget to checkout the video of this case study too)

💾 be sure to save for later 💾

⭐️ Here are the details ⭐️

☑️ Jesse & Becky are 53

☑️ They want to retire now

☑️ $3,600/month of total SSI at age 62

☑️ Becky’s Pension is $4,500/month at 62

☑️ $350,000 in IRAs

☑️ $200,000 in 401k’s

☑️ $550,000 in Non-qualified Stocks

⭐️STEP 1: Early Retirement: Avoiding Early Withdrawal Penalties ⭐️

☑️ IRA’s and 401k’s are subject to a 10% penalty for early withdrawals (so we want to avoid touching these until age 59–1/2)

☑️ Instead, we will use their stock account to generate income the first 6 years of retirement (since there are no penalties to access that money)

☑️ Assuming a 6% annual return, we can withdrawal about $9,000 per month for 6 years

….with no early withdrawal penalties…..

If this money runs out prior to 59–1/2 we can also utilize a 72t Strategy, or The Age 55 Rule to access additional penalty-free retirement funds.

⭐️ STEP 2: Retirement Account Distributions (for 3 years) ⭐️

☑️ IRAs/401ks remained invested & are worth approximately $803k at age 59–1/2

☑️ They will take just over $9,000/month for 3 years (adjusted for inflation)

🔥 This the 2nd income-bridge until their pension and Social Security income become available

Note: At age 62 the remaining balance of their IRAs/401ks combined is approximately $610,000

⭐️ STEP 3: Supplemental Income from the Market ⭐️

☑️ The inflation-adjusted income withdrawal required from this remaining $610,000 is only 2.6% per year

☑️ This means they can safely generate the supplemental income they need (from their portfolio)

☑️ It also means we may start repositioning assets for a tax-free wealth transfer (since their wealth is likely to grow in retirement only having to take a small income withdrawal each year)

☑️ OR they can SPEND MORE than they had planned (which is what they would like to do)

Final Results:

☑️ Since they have guaranteed, lifetime income from pensions and Social Security there is no need for an income annuity in this situation

☑️ Taking a 5% income withdrawal from the market means they have about 14% more income than they need in retirement

☑️This gives them the ability to travel, gift money to loved ones annually (tax-free), or even build a larger estate that may include a larger, tax-free transfer of wealth when they pass away

☑️They also have the comfort of predictable, market-independent income sources that allows them to fully enjoy their retirement

Let’s chat 💬😎