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Decision framework · Planning
Retirement Timing Decision Framework
Evaluate optimal retirement age based on financial readiness, healthcare, and lifestyle factors
01
Assess Financial Readiness
Key questions
- What is your current net worth?
- What is your projected portfolio value at different retirement ages?
- Can you sustain a 3.5-4% withdrawal rate?
- What is your projected Social Security benefit at different ages?
ConsiderationsUse conservative assumptions: 5-6% real returns, 3% inflation, and 30+ year retirement period.
02
Model Income Sources
Key questions
- What Social Security strategies optimize your benefits?
- Do you have pension income? What are the options?
- What other income sources do you have (rental, part-time work)?
- How will income change throughout retirement?
ConsiderationsDelaying Social Security to 70 increases benefits by 8% per year after full retirement age—often the best 'investment' available.
03
Plan Healthcare Coverage
Key questions
- How many years until Medicare eligibility (65)?
- What are your healthcare marketplace options?
- What will health insurance cost during the gap years?
- Do you have HSA funds available?
ConsiderationsHealthcare is often the biggest challenge for early retirees. Budget $1,000-$2,000/month per person for pre-Medicare coverage.
04
Project Expenses
Key questions
- What are your current annual expenses?
- Which expenses will decrease in retirement?
- Which expenses will increase (travel, healthcare)?
- Have you accounted for inflation?
ConsiderationsMany retirees spend more in early retirement (active years), less in middle retirement, and more again in late retirement (healthcare).
05
Consider Lifestyle Factors
Key questions
- What will you do with your time?
- Do you have purpose and community outside work?
- What does your spouse/partner want?
- Are you mentally ready to leave work?
ConsiderationsFinancial readiness doesn't guarantee fulfillment. Many retirees struggle with identity and purpose. Plan your life, not just your finances.
06
Optimize Social Security
Key questions
- What is your break-even age for delaying benefits?
- How do spousal benefits factor in?
- What is your life expectancy based on health and family history?
- How does claiming age affect taxes?
ConsiderationsFor married couples, the higher earner delaying to 70 often maximizes survivor benefits and total household income.
07
Manage Sequence of Returns Risk
Key questions
- What is your asset allocation at retirement?
- Do you have 2-3 years of expenses in cash/bonds?
- What is your plan if markets drop 30% year one?
- How flexible are your spending plans?
ConsiderationsPoor returns in the first few years of retirement can devastate a portfolio. Build a cash buffer and maintain flexibility.
08
Plan Tax Strategy
Key questions
- What is your Roth conversion opportunity window?
- How will RMDs affect your tax bracket?
- What is the optimal withdrawal sequence?
- How can you manage Medicare premium brackets?
ConsiderationsYears between retirement and Social Security/RMDs often offer the best Roth conversion opportunity.
09
Make Your Decision
Key questions
- At what age are you financially ready?
- At what age are you emotionally ready?
- What is your spouse/partner's timeline?
- What would you regret more: retiring too early or too late?
ConsiderationsConsider a 'practice retirement' with an extended leave. Many find they want to keep working part-time for purpose and social connection.
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