"Early retirees" refers to individuals who choose to stop working and retire from their jobs at a relatively young age, typically before reaching the standard retirement age of around 65. These people decide to leave the workforce and enjoy their retirement earlier than most.
Full definition
The individual exchanges will continue to be the most likely landing spot
for early retirees looking for health coverage.
In contrast, this paper looks at both the health and mortality risk
of early retirees relative to the health and mortality risk of age 65 retirees.
There is even a case to be made with an aggressive investment strategy throughout retirement, especially for
early retirees with long retirement horizons (we need our wealth to last!!).
These are all rules in the tax code today and if used correctly it can allow all of us
as early retirees to never pay taxes again!
I don't know how that could not be the case for
early retirees in particular, like ourselves, who are looking at a potential 50 + year retirement horizon.
Many early retirees focus on building a huge investing nest egg, so that way, when the time comes, they can enjoy sitting on tropical beaches watching the sunset.
While employer / union sponsored health benefits are likely not an option for
most early retirees, that doesn't mean you're out of luck.
I have great news for
potential early retirees; there are perfectly legal and penalty free ways to access your 401 (k) while you're young.
If anything,
early retirees need a slightly higher percentage of stocks to fuel their portfolio over the long haul.
Kids so far for us have been cheap, and health care is made easy for
early retirees tanks to the ACA.
Early retirees consist of a group in extremely poor health, a group with health equal to age 65 retirees, and a group with health in between.
That's
because early retirees, though their monthly benefits are less, are receiving those reduced benefits over a longer period.
While early retirees may qualify for subsidies on the individual exchanges, this likely won't be retained in its current form forever so don't bank on them.
He also notes that even for
very early retirees, a 3.5 % rate is the lowest you would probably ever need to go.
Therefore,
early retirees who anticipate long payout periods may want to consider assuming lower withdrawal rates.
Private health insurance is an important factor for the health
of early retirees, and those who maintain steady coverage tend to fare best in retirement.
I have great news for
potential early retirees; there are perfectly legal and penalty free ways to access your 401 (k) while you're young.
I like this list, especially
for early retirees that want to keep busy and earn some extra income on the side.
Sequence risk is by far the biggest risk
early retirees face, and that risk can come from market crashes, long - term mediocre returns and even rising health care costs.
This paper finds substantial heterogeneity
among early retirees in health and mortality risk related to the age at which they are entitled to Social Security benefits.
ERRP proved to be a critical source of support by
benefiting early retirees, their family members, other plan participants, and the health plan sponsors that provided vital access to health coverage.
Certified financial planner Carolyn McClanahan, founder and director of financial planning at Life Planning Partners, on
how early retirees can save thousands on health insurance premiums through Obamacare tax credits.
The ACA attempted to address the shortage of non-group plans through the temporary federal
Early Retiree Reinsurance Program, which reimburses employers who continue offering insurance coverage to retirees.
According to Statistics Canada, 60 % of
early retirees aged 55 to 59 have returned to work, as have 44 % of those aged 60 to 64.
Early retiree health coverage through employment - based plans provides a valuable bridge from employment coverage, for active workers, to Medicare coverage, for eligible retirees.
Below, we highlight some of the best
advice early retirees have shared with us, beyond the most fundamental tip, which is to save early and save often.
Sequence risk is by far the biggest
risk early retirees face, and that risk can come from market crashes, long - term mediocre returns and even rising health care costs.