Let’s start with the basics: their retirement vision is about freedom, not extravagance. They want to step away from full-time work, spend more time doing what they love, and travel regularly for the next 20 years—with a few “epic” trips built in every few years. Their baseline monthly expenses are around $7,500, which inflates to about $104,000 annually by 2029 when they plan to retire. On top of that, they’re budgeting $15,000 per year for travel, and every three years, an additional $25,000 for a big adventure. All told, it’s a lifestyle-focused retirement with built-in flexibility.

Their investment portfolio is solid, with $785,000 in Matthew’s 401(k), $812,000 in Sarah’s 401(k), and over $1 million in a joint brokerage account. Their home is worth $1.25 million with just $126,000 left on the mortgage, putting them in great shape from a net worth perspective. With average growth of 7.5% before retirement and 6.5% after, their assets are projected to grow to $4.6 million by age 55.

But early retirement has unique challenges—especially when it comes to health insurance. Since Medicare won’t kick in until 65, they’ve already selected an open-market silver plan for the 10-year gap, budgeting just over $11,000 per year. Based on their good health and careful planning, it’s a reasonable cost. And they’ve gone a step further—factoring in long-term care expenses due to family history, because a 40-year retirement means you can’t afford to skip the health planning piece.

On the tax strategy side, the real opportunity lies in the window between retirement at 55 and when Social Security and required minimum distributions (RMDs) begin. That’s when they’ll be in a low-income bracket—ideal for Roth IRA conversions. By converting just enough to stay in the 10% tax bracket each year, they could potentially save over $1.7 million in taxes and significantly increase the after-tax value of their portfolio. On the flip side, converting too much into higher brackets—like 24%—could cost them up to $3 million in portfolio value. In other words: precision matters.

Of course, nothing goes 100% according to plan. So we ran a Monte Carlo analysis to stress test the assumptions. With their current lifestyle and savings goals, they have a 60% chance of success—not bad, but not bulletproof. A few small changes could improve their odds dramatically:

• Cutting expenses by $1,000/month increases success probability to 70%.
• Working just one more year boosts it to 68%.
• Working two extra years raises it to a very comfortable 75%.
• Saving an additional $100,000 per year has a smaller impact—just a 4% improvement—because their current portfolio is already pulling most of the weight.

Ultimately, Matthew and Sarah are prioritizing flexibility over perfection. They’re committed to reviewing and adjusting their plan annually as they approach retirement, taking into account inflation, market performance, and healthcare needs. The key takeaway from their approach? Early retirement isn’t just about hitting a number—it’s about understanding the trade-offs and building a strategy that evolves with your life.

If you’re considering retiring early, don’t just ask, “Can I afford it?” Ask, “How do I keep affording it—for decades to come?” With the right mix of health, investment, and tax planning, that answer might be closer than you think.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost

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