How to Retire Early Without Regret

I’ve worked with plenty of people who have done all the “right” things—maxed out their 401(k)s, built up cash reserves, diversified across Roth and brokerage accounts—but still feel uneasy about when and how to spend it. That’s exactly where Ron and Veronica from Indiana found themselves. With $6.8 million in savings and a disciplined habit of contributing 20% of their income, they were in a strong financial position. But Ron was feeling stressed about their pace. Could they take their foot off the gas and still retire comfortably? We ran the numbers. Their projected retirement spending lands between $300,000 and $325,000 a year, adjusted for inflation. Based on their assets and a 3.9% withdrawal rate, they’re actually ahead of schedule. Our advice: keep saving for another two years and then ease off. Retirement isn’t just about money—it’s about peace of mind, too.

Then there’s Scott from Illinois, who’s looking to retire at 55 after 28 years of service. He’s saved $2.8 million, mostly in traditional IRAs. His plan is to use the Rule of 55 to withdraw from his 401(k) penalty-free for living expenses until age 59½. Smart move—but it could be even smarter. We suggested he check if his 401(k) plan allows partial rollovers. If it does, he can start moving money into an IRA and execute annual Roth conversions up to the top of the 12% tax bracket—about $50,000 per year. This sets him up for more tax-efficient retirement income down the road. We also discussed 72(t) distributions as a backup plan, but reminded him those require more careful planning to avoid penalties or liquidity issues.

Another great case was Big One from Texas. With nearly $5 million in investments, including TSP accounts, Roth IRAs, and rental income, he and his wife are in great shape for retirement. But like many parents, they’re facing a new financial challenge: paying for college. Big One asked if he should tap into Roth IRAs to cover costs. Our advice was firm—don’t do it. Roth IRAs are gold for tax-free retirement income. Instead, we encouraged him to use his brokerage accounts or consider 529 plans. If needed, student loans or other creative funding options can fill the gap.

Big One’s wife also plans to retire at 55 with monthly expenses of about $12,000. With $9,000 in pensions and $5,000–$7,000 in rental income, they’re looking at a shortfall of around $36,000 annually. But given their savings, they’d only need to withdraw less than 1% of their portfolio per year. That’s a green light in our book. We advised them to plan for ongoing costs like rental property maintenance and taxes to avoid surprises.

Across the board, we’re seeing a growing need for tax efficiency. Whether it’s executing Roth conversions while tax rates are still favorable or leveraging tools like the Rule of 55 and 72(t), these strategies allow people to retire earlier and smarter. But there’s also a mindset shift that’s just as important. After years of disciplined saving, switching to a spending mode in retirement can trigger guilt or second-guessing. That’s why we remind everyone: the point of saving is eventually to enjoy it. The hard part isn’t just building wealth—it’s learning how to use it to create the life you’ve been working toward all along.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.