6 Simple Steps to Retire at 55 (if you’re in your 30’s)

(don’t forget to checkout the video too)

Everybody wants to retire early but it’s not the easiest feat to accomplish.

But, it’s very do-able with a little bit of discipline and some long-range planning.

So, if you’re in your 30’s and you really want to retire at 55, here are 6 steps that you need to start working on immediately.

✅ Step 1: Start immediately saving 20% of your gross income EVERY month (ideally 30%).

Retiring 10 years earlier than average means not only will you have 10 less years to save, but you’ll also need your retirement income to last 10 years longer!

To make this a reality, saving 10% isn’t enough, you have to become an incredible saver as quickly as you can and save at least 20%.

✅ Step 2: Take full advantage of all free money available to you

You have to be a good saver on your own, like I talked about in step 1, but that means you can’t leave ANY money on the table that can help you build your nest-egg either.

If your employer offers any type of contribution match in your group retirement plan, you must take advantage of it.

✅ Step 3: Contribute at least a few hundred dollars to a life insurance contract with a 0% loan provision

This has to be a very specific type of contract, that is designed to grow with the market with no risk, but also offering the ability to take money out with a net 0 cost.

This very important tool is often left out in retirement planning (probably because of most people don’t fully understand its importance, including many financial planners).

Not only will this serve as a tax-free bucket to pull money out of prior to 59–1/2 with no penalties, but it is a great buffer against market volatility at all stages of retirement.

This policy can be used to take loans anytime at 0%, and can be a very important way to reposition your taxable retirement dollars into a tax-free environment, like a Roth IRA.

Not to mention, this can also be a great hedge against long-term care in later years of retirement.

✅ Step 4: Max out a Roth IRA

Roth IRA’s are one of the best tax-free places to save for retirement so you have to be maxing one out (as long as you aren’t making too much money to qualify already).

Every dollar you take out of a Roth IRA including all of the growth is tax-free, but remember, you still can’t touch this money until 59–1/2 unless you want to pay a 10% penalty (that’s part of why the life insurance is so important).

If you don’t qualify for a Roth IRA because you make too much money, you want to start putting more money into the life insurance contract since there are no limits to how much you can contribute AND no income limits that affect your contributions either (this is why so many fortune 500 CEOs use this as their primary retirement planning tool).

✅ Step 5: Start repositioning money so that you can achieve a tax-free retirement

Having too much money in a taxable retirement account means that you are susceptible to rising tax rates and that you are very likely to be taxed on your social security as well.

To maximize all of the dollars you have saved, you must strive for a tax-free retirement (or as close to it as possible).

This doesn’t mean all of your money should be in tax-free environment, like a Roth IRA or a life insurance contract, but anything above approximately $350,000 should start strategically being repositioned in tax-free vehicles.

✅ Step 6: Be Strategic with your taxable retirement accounts

Your standard deduction in retirement allows you to collect money from your taxable accounts, with enough of a deduction to offset that income, so that it technically is tax-free as well!

This means in early years of retirement you want to strategically take enough out of your taxable account to NOT trigger taxation, but to also reduce the balance of your taxable account, so that when you are forced to start taking money out of that account (with required minimum distributions or RMDs), it does not trigger taxation on that money OR on your social security check (this is why delaying social security until 70 sometimes makes sense for a tax-free retirement).

It’s a bit of fine line that you need to walk, but this is what I help people with all the time.

So as you can see, retiring at 55 can be done, it just takes discipline and some planning.

If you need some help, or want to start reviewing how you’re tracking for an early retirement, feel free to reach out.

Let’s chat 💬😎