Let me walk you through what I’d do if I were in this situation specifically, what Becky (a hypothetical retiree) should consider when facing this exact scenario.

Becky’s Retirement Setup

Becky is 62, with a $1 million 401(k) portfolio and plans to spend $5,000 per month, or $60,000 annually, adjusted for 3% inflation. She doesn’t want to claim Social Security until age 67, so her investments need to fund her lifestyle entirely until then.

The problem? Becky’s entire portfolio is invested in U.S. large-cap growth stocks with an assumed return of 8.5%. That’s great in theory, but what happens if the market crashes during her first few retirement years?

The Withdrawal Crunch

During the five-year pre-Social Security gap, Becky’s portfolio will need to fund all her expenses potentially requiring 6.5% to 8% annual withdrawals. That’s well above the safe withdrawal range, especially in volatile markets.

Here’s the good news: once Becky turns 67 and starts Social Security, her need for portfolio withdrawals drops significantly from 8% to just 3.2% by age 68.

But surviving those first five years without sabotaging the entire retirement plan is the real test.

Why Early Market Losses Can Ruin Retirement

If Becky’s portfolio takes a major hit during those early years, her withdrawal percentage goes up. That’s the danger of sequence of returns risk the idea that losing money early in retirement is much worse than losing money later.

Bear markets typically last between 2.5 and 5 years. That means Becky could easily run into trouble if she doesn’t have a more stable, diversified portfolio to weather that period.

The Right Portfolio Shift: From Growth to Balance

To handle that five-year window, Becky needs around $380,000 to cover her expenses. Some of that say $80,000 might come from dividends (assuming a conservative 1.6% yield after a 20% dividend cut). But that still leaves $300,000 that needs to be safe from market swings.

That’s why I’d recommend shifting her portfolio to a 70/30 mix 70% in stocks, 30% in high-quality, short-term bonds. This gives her some growth, but also a layer of protection to draw from during market dips.

What Does This Do to Her Long-Term Plan?

Yes, moving from 100% stocks to 70/30 slightly lowers potential long-term growth. But here’s the trade-off: it increases her probability of retirement success. Her current all-stock plan has a 73% success rate. With the adjusted portfolio, that number climbs and her plan becomes much more resilient.

Once Becky hits 67 and her withdrawal rate drops, she can consider reallocating for more growth if her financial picture looks strong. But early on, stability matters more than potential.

Key Takeaways for Anyone Retiring Before Social Security

If you’re retiring before claiming Social Security, here’s what you need to know:

• Calculate your pre-Social Security gap and make sure you have a stable source of funds to cover it.
• Adjust your portfolio allocation to reduce risk during early retirement.
• Use short-term bonds or cash reserves to avoid selling stocks in a down market.
• Revisit your plan once Social Security kicks in and your withdrawal rate drops.

Retirement isn’t about hitting a perfect number it’s about creating a strategy that holds up when the market doesn’t. For Becky and for anyone else looking to retire before collecting benefits that means making smart portfolio moves now to protect your future freedom.

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.

The post How I’d Invest Before Taking Social Security: Portfolio Strategies for Early Retirees appeared first on ROI TV.

If you’ve ever felt discouraged about your retirement progress, this one’s for you.

Rethinking Retirement Savings Goals

We’ve all heard it before: “You need to save 10 times your salary by the time you retire.” Fidelity suggests hitting savings milestones like one times your salary by 30, three times by 40, and so on culminating in 10x by age 67.

But here’s the truth: only 9% of Americans actually reach that goal, according to a 2025 study by Northwestern Mutual. Why? Because the system is stacked against us rising costs, student debt, inconsistent income, and delayed saving habits all make it harder to hit that number.

Aaron emphasized that it’s time to stop chasing arbitrary savings targets and start planning based on your real-life expenses.

Build a Retirement Plan Around Your Lifestyle

Instead of focusing on income multipliers or that $1 million myth, Aaron encouraged viewers to ask a more important question: What will I actually spend in retirement?

If you’re a strong saver now putting away 20–25% of your income you may be in a better position than you think. Why? Because you’re used to living on less, which means you’ll likely need less in retirement too.

Track your spending, account for healthcare, hobbies, and travel, and build a savings plan that supports your retirement lifestyle not someone else’s spreadsheet.

Social Security: A Game-Changer for Retirement Income

One of the most overlooked elements in retirement planning? Guaranteed income. That includes Social Security, pensions, and annuities sources of income that don’t rely on the market.

Aaron ran the numbers. For someone who needs $60,000 a year in retirement and expects to receive $30,000 in Social Security, they’d only need to save about $930,000 to cover the rest. For someone needing $40,000 annually with the same Social Security benefit, the needed nest egg drops to just $430,000.

And for modest couples? Social Security could cover nearly all of their retirement spending no million-dollar portfolio required.

Boosting Retirement Readiness, One Step at a Time

If you’re behind on your savings goal, don’t panic adjust. Aaron suggested:

• Increasing your savings rate by just 1–2%
• Working part-time during retirement
• Delaying retirement by one or two years
• Downsizing or trimming unnecessary expenses

These small changes can make a big difference without requiring a complete overhaul of your lifestyle. It’s not about perfection it’s about progress.

Market Volatility Is Changing Retirement Expectations

With ongoing inflation and unpredictable markets, more Americans are scaling back their retirement goals. The average target savings amount fell from $1.46 million in 2024 to $1.26 million in 2025.

But that’s not necessarily bad news. More people are embracing phased retirement, working part-time, or offering consulting services. Others are relocating to lower-cost areas to stretch their dollars further and prioritize simplicity over extravagance.

Retire on Your Terms, Not Someone Else’s

Stop letting the million-dollar myth hold you hostage.

The real strategy is to understand the gap between what you’ll spend and what you’ll receive from guaranteed income. That’s what determines how much you actually need to save. And millions of Americans retire successfully without ever hitting that $1 million mark.

If you want a retirement plan that works, start with these three steps:

1. Track your current expenses
2. Calculate your expected income streams
3. Create a savings plan that fills the gap

Retirement isn’t about a magic number it’s about living the life you want, sustainably and confidently.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post Forget the Million-Dollar Myth: A Realistic Approach to Retirement Planning appeared first on ROI TV.

1. Retirement at Age 55: A Rare but Rewarding Goal

Only about 11% of Americans retire between 55 and 59, making early retirement a significant achievement. While retiring at 55 can offer more freedom, it requires careful financial planning, as Social Security benefits aren’t available until age 62 at the earliest. If you’re aiming for this milestone, you’ll need to ensure you can self-fund your lifestyle for several years before government benefits kick in.

2. How Early Retirement Affects Social Security Benefits

The earliest you can claim Social Security is at age 62, but doing so reduces your benefits to 70% of what you’d receive at your full retirement age (67). If you wait until age 70, your benefit increases to 124% of your full amount—meaning the longer you wait, the more you’ll receive.

Since benefits are calculated using your highest 35 years of earnings, retiring at 55 can have a significant impact. Any years without income count as zeros, which lowers your average indexed monthly earnings (AIME) and, consequently, your benefit amount. If you stop working early, those missing years could reduce your Social Security check.

3. How Your Earnings History Affects Your Retirement Benefits

Your Social Security payout is based on your top 35 earning years. If you retire early, years without income are factored into your AIME, potentially reducing your benefits. For example, if you earn $50,000 annually for 30 years and then retire, the five missing years of income (calculated as zeros) will reduce your overall benefit.

Additionally, earnings before age 60 are indexed for inflation, while earnings after 60 are not. By working a few extra years, you could replace lower-earning years from earlier in your career, potentially boosting your Social Security income.

4. The Hidden Opportunity Cost of Retiring at 55

Leaving the workforce at 55 could mean missing out on your peak earning years. These years could replace earlier, lower-earning years in your benefit calculation and result in higher Social Security payouts. Retiring early could also mean missing out on employer contributions to retirement accounts and other financial benefits tied to employment.

Another important consideration: Earnings after age 60 aren’t adjusted for inflation in Social Security calculations, which can affect how much you receive if you decide to return to work later.

5. How to Financially Prepare for Early Retirement

If you’re serious about retiring at 55, you’ll need a solid financial plan to cover expenses until you can claim Social Security. Here are a few strategies to help:

• Build a Robust Retirement Portfolio: Prioritize maxing out your 401(k), Roth IRA, and other retirement savings accounts.
• Establish a Withdrawal Strategy: Plan how to withdraw from different accounts in a tax-efficient way.
• Create an Emergency Fund: A robust cash reserve will help cover unexpected expenses without dipping into retirement savings prematurely.
• Consider Health Care Costs: Medicare eligibility doesn’t begin until age 65, so plan for private insurance or healthcare sharing options during the gap years.

6. My Personal Reflections on Retiring Early

As someone who thinks about financial freedom often, I understand the appeal of retiring at 55. However, it’s essential to weigh the financial trade-offs and consider the long-term impact on your Social Security benefits. Everyone’s financial situation is different, and what works for one person may not work for another.

I’d love to hear your thoughts—are you planning to retire early? Share your experiences and strategies in the comments, and don’t forget to like, subscribe, and share if you found this helpful!

All Writings are for education purposes only. Please speak with a financial advisor about your personal situation.

The post What Happens to Your Social Security When You retire at 55? appeared first on ROI TV.