Early Retirement - Navigating the Gap Years - Getting Through the Early Years (between 55 and Social Security)

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Putting it all together  

Retiring is all about cash flow. It doesn’t matter if you retire early or late.  Your Social Security and Pension (if you have one) are two financial assets that provide income in retirement. The key consideration is how to get the most out of them.

Start by assessing your personal inventory of financial assets. Think as a successful money business owner would. 

"I have cash, investments, real estate, a pension fund, and Social Security (you could easily replace the terms pension fund and Social Security with annuity). Each of my financial assets has unique properties…advantages and disadvantages." 

• Real Estate (easier to lend against, real asset, not related to stock market – may not keep up with inflation, cannot easily cash out)
• Cash (easier to access, not related to stock market – doesn’t keep up with inflation)
• IRAs (easier to access, potential for high returns – taxed on when cashed out, tied to the stock market)
• ROTHs (same as IRA only not taxed when cashed out)
• Pension (Either an asset or an income, responsible party backing the benefit – taxed when received, once claimed it is normally permanent, not likely to keep up with inflation)
• Social Security (Tax friendly, yearly COLI, secured by the federal government – not liquid, longevity gamble)
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Assess your financial situation. What are your cash flow needs?

Assess the difference between your cash flow (before claiming any benefits) and expenses. This is your Needs Gap!

Assess your tax situation? Are you in a high or low tax situation?

Assess your investment strategy and growth rates on each of your assets. Are there some with higher growth rates than others?

Consider any liabilities you know or believe you will have, including emergencies. Earmark assets to cover them. 

Take your Needs Gap and look at your assets, what is the most efficient way to fill this?

A Secret About Retirement Planning

It is just like when you are working in that it is all about cash flow. You need cash flow to pay the bills. 

The difference is where you source your cash flow from. You may actually have to manage your money business, or hire a manager – i.e. a fee-only financial planner. 

Which assets should you use, how much, and when to cover yo

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About Your Co-Hosts:

Travis Maus has been in financial services for over fifteen years. He is a Senior Wealth Manager and Chief Executive Officer at S.E.E.D. Planning Group.

Steve Campbell has over a decade of experience in the industry and serves as Chief Brand Officer at S.E.E.D. Planning Group.