Retiring at 55 is fundamentally different than retiring at 65. If you've built a significant

nest egg, the question doesn't, can you survive? It's can you bridge that tenure gap? At 65,

you have Social Security and Medicare. At 55, you have neither of those things. So today we're

exploring how your withdrawal rate should not be a flat line over the course of your retirement,

how to prioritize different tax strategies

in those early years, and the risk of retiring too early, but also what happens if you retire too

late. The first mistake people make here is they assume that retirement expenses are linear.

They aren't. Between 55 and 65 year expenses will most likely be at their peak. You're both paying

full price for health care and also because you have your time and your energy, you're likely maximizing travel and lifestyle expenses as well. And it's not just this. While expenses are the highest they're ever going to be, your income is likely the lowest it's ever going to be. Social security hasn't kicked in. If you're eligible for a pension, it likely hasn't started yet.

Everything that you pull out to live on has to come from your portfolio. So you have this

combination of higher expenses and lower non-portfolio income sources that creates a perfect storm

that if you don't have a plan for, can derail the entirety of your retirement. So I get a quick

example to illustrate what I mean. Let's assume that your core expenses are $70,000 per year. That's what you need for property taxes, for groceries, to pay the bills, $70,000 per year. Now, that's going to last all the way through retirement. Sure, inflation is going to take that number higher, but $70,000. Now, from 55 to 65, you're also on the hook to pay for the entirety of your health care premium for you and a spouse. Let's assume that's another $25,000 per year or slightly over $2,000 per month. Now remember, you're retired at 55 not to go sit on the couch, but because you want to do things. So we're going to budget in an additional $25,000 per year for the travel and the lifestyle that

you're going to live at that point. You add all those up, $70,000, $25,000. You're looking at

$120,000 per year of expenses at that point in time. So those are your expenses from 55 to 65,

but let's look what happens from age 65 and beyond. At age 65, Medicare kicks in.

So now your health care expenses go from $25,000 per year down to $10,000 per year. At age 65,

you're still traveling, but not quite as much as you were from 55 to 65. So now your travel

expenses cut to $10,000 per year. Now your core expenses, those remain the

same. Nothing changes about that. But your total expenses go from 120,000 per year, which is what they

were from age 55 to $90,000 per year, which is the 70,000 of core expenses plus 10,000 for travel,

plus 10,000 for health care. So you start to see how expenses have dropped fairly dramatically here, but that's not

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