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Financial Planning

Can You Afford to Retire Early?

 

To determine whether you should accept an early retirement offer from Fortune 500, you must consider more than just the offer itself. You must contemplate your overall financial situation. Can you afford to leave Fortune 500 early? Will you still be able to attain all of your retirement goals if you do so? These are complex issues that require the assistance of a financial expert, but you can take some basic measures on your own.

 

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We recommend that these Fortune 500 customers identify their retirement income sources and the annual quantity they can anticipate from each source. Then, estimate your annual retirement expenses (including taxes and inflation) and ensure that your income will be sufficient to cover them. You may be able to accept Fortune 500's prospective offer and still enjoy the desired retirement lifestyle. Keep in mind that these are only estimates. It is essential to establish a comfortable cushion in the event that your expenses increase, your income decreases, or you live longer than anticipated.

 

"If you don’t think you can afford early retirement, it may be better not to accept your employer’s offer.." photo of people sitting on bench in park

 

If you do not believe you can afford an early retirement from Fortune 500, it may be best not to accept the company's offer. The longer you remain employed, the shorter your retirement will be and the less money you will require to fund it. Working longer may also enable you to accumulate greater savings in IRAs, retirement plans, and investments. Nevertheless, if you truly desire an early retirement from Fortune 500, making smart decisions as soon as possible will help you surmount the obstacles. Attempt to reduce or eliminate certain retirement expenses. Consider a more risky investment strategy. Get a part-time job to supplement your income. Consider applying for early Social Security benefits at age 62, but keep in mind that your monthly benefit will be reduced.

For more information about this topic, view our e-book here: https://retirekit.theretirementgroup.com/what-to-do-with-an-early-retirement-offer-e-brochure

Added Fact:

A crucial factor to consider when assessing whether you can afford to retire early from Fortune 500 is your healthcare expenses. Healthcare costs tend to increase with age, and retiring early means you may need to cover these expenses for a longer period of time. According to a study conducted by Fidelity Investments in 2021, the average couple retiring at age 65 will need an estimated $300,000 to cover healthcare expenses throughout their retirement years. It is essential to account for these costs and explore options such as Medicare and supplemental insurance to ensure your financial readiness for early retirement.

Source: Fidelity Investments. "How to Plan for Rising Healthcare Costs." Published on October 21, 2021.

Added Analogy:

Deciding whether you can afford to retire early is like navigating a financial maze. Just as you would approach a maze with caution and a strategic plan, evaluating your readiness for early retirement requires careful consideration and analysis of various factors. Imagine you are faced with a labyrinth of choices, each representing different financial aspects: income sources, expenses, investments, and inflation. Your goal is to reach the center of the maze, representing a secure and comfortable retirement. Along the way, you must navigate the twists and turns of financial challenges, such as estimating retirement income, managing expenses, and accounting for inflation. Like a skilled maze solver, you need to assess your financial resources, anticipate potential obstacles, and make informed decisions to find the right path towards a successful early retirement.

This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, Alcatel-Lucent, AT&T, Apache Corporation, Altria, Avaya, Baker Hughes, Bayer, Boeing, BP, Bristol Myers Squibb, Chevron, Concho Resources, Hughes, fidelity.com, Wyeth, Northrop Grumman, Merck, Raytheon, Coca-Cola ,Qwest, Pfizer, Caterpillar, ConocoPhillips, ExxonMobil, Sempra Energy, San Diego Gas & Electric Company, Southern California Gas Company, Ameren, Anheuser-Busch, APL, Bank of America, Blackhawk Networks, Caterpillar, CenturyLink, Chevron, Citigroup, Clorox, Coca-Cola, Colgate, Con Edison, ConocoPhillips, Dexone, ExxonMobil, GlaxoSmithKline, Halliburton, Hewlett Packard Home Depot, Honeywell, HP, IBD, Johnson Controls Kaiser Permanente, Kimberly-Clark, Kinder Morgan, Lockheed Martin, McCormick Spice, Merck, Monsanto, Northrop Grumman, Occidental Petroleum, Pepsi, Pfizer, PG&E, Phillips 66, Phillip Morris, Qwest, Raytheon, Royal Dutch Shell, Safeway, San Diego Gas & Electric, Schlumberger, Scotts Miracle Gro, Sempra, Siemens, SoCal Edison, Sony, Southern California Edison, Teradata, Toyota Motor Corporation, Tropicana, United Parcel Service, Verizon, We Energies Group, Wisconsin Energy, Wyeth, Verizon or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.

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