As a fiduciary financial advisor in Port Orange, Holland Capital helps you find out whether you can stop working early, how your savings can bridge the years before retirement accounts and Social Security, and how you can cover health insurance before Medicare. The investments are managed to support that plan.
You want to stop working early.
Not someday. Soon enough that you have started running the numbers at the kitchen table.
The mortgage and the regular bills are still there. At the same time, the 401(k) has become a real number. There may be an IRA from an earlier job, and you have built savings outside of both.
You have done the saving. Now you want to know whether it is enough to buy back the years you do not want to spend working.
The hard part is that the paycheck would stop before much of the money meant for retirement is easy to use. Social Security is still years away. So is Medicare.
So the question is not only whether you have enough.
It is whether the money you can use first can carry the household until the rest of the plan catches up.
That is the plan we build first.
The Years Between Your Last Paycheck and Everything Else
An early retirement creates a stretch of years that has to stand on its own.
The paycheck is gone, but Social Security has not started. Medicare has not started. Some of the money you have spent years building may still be intended for later.
The first job is to lay out what you can draw on during those years and what should be left alone.
Money in a taxable account, retirement accounts and other savings do not all work the same way. There are also ways some retirement money may be available before the usual retirement age. The IRS lists exceptions on its page about the additional tax on early distributions, and our guide to 72(t) withdrawals explains one approach to reaching retirement money early.
But access is only part of the question.
If one account pays for the first few years, what is left for the years after that? If you claim Social Security sooner, the portfolio carries less of the early retirement. If you wait, your savings have to do more first. Our guide to when to claim Social Security explains the timing choices.
Then there is the household itself.
The first years may include costs that will not last, such as a mortgage that is not yet paid off. Later years may look very different. We do not assume one spending number has to describe all of them.
We build the years in the order they actually happen.
That tells you whether the date you have in mind works, what has to fund the years before Social Security and Medicare and what would have to change if the numbers do not quite reach. Our retirement planning work starts there.
Health Coverage Has to Be Part of the Retirement Date
For someone retiring early, health coverage is not a side question.
It is part of deciding whether you can leave the job.
A spouse may still have coverage through work. COBRA may be an option for a period of time. A marketplace plan may be another choice.
Its cost goes into the plan before you decide the retirement date works.
The money you live on and the health coverage you choose also have to be considered together. A withdrawal plan that looks fine by itself may look different once health coverage is included.
We put both into the same year-by-year plan through the point when Medicare begins. Our early retirement guide walks through the years before Medicare.
A Portfolio That Has to Last Longer
Retire early and the portfolio has more years to cover. It has to help pay for the years before Social Security and Medicare and still be there decades later.
We set that out in a written investment policy statement: what each account needs to provide and when, how much risk the overall plan can take and how each account is taxed. The investments are then managed to that document for the best after-tax result the plan’s level of risk allows, not to a generic retirement mix.
Where investments are held is part of that work. The account that may help fund the first years does not necessarily have the same job as an account you expect to leave invested much longer. Our guide to asset location explains that idea.
We start with what you already own. If an investment fits the plan, it stays. Selling has a tax cost, and we count it before recommending a change. Our investment management carries the plan forward from the last paycheck on.
Working with Holland Capital
Holland Capital Management is an independent registered investment adviser and a fiduciary. M. Chad Holland, CFA, CFP® works directly with clients and is responsible for the planning and advice.
To start, bring recent statements for each account, a Social Security estimate for each of you and the date you are aiming for, however rough. We will tell you whether that date works, which accounts would cover which years and what the choices are if it does not.
If a CPA prepares your return, we work from the same numbers, so the withdrawal plan and the tax return agree.
The first conversation is free. If there is work worth doing after that, we will define the scope and cost before you decide whether to move forward.
Our offices are in Charlotte, North Carolina and Winter Park, Florida. We work with clients in Port Orange primarily by video or phone. When an in-person meeting makes sense, we meet by appointment at the Regus center at 444 Seabreeze Boulevard in Daytona Beach, about 15 minutes from Port Orange.
For clients whose investments we manage, accounts are held directly at Charles Schwab in the client’s own name. Holland Capital manages the investments but does not take custody of client assets. If a client ever needs in-person assistance from Schwab, the closest branch is in Ormond Beach at 1414 West Granada Boulevard.
We work with clients throughout Florida. You can see the other Florida communities we serve here.
Our what we do page explains how a planning engagement works.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Frequently Asked Questions
How Do I Know If I Can Afford to Retire Early?
The plan starts with what your household spends now, not a guess about what retirement will cost someday. From there, we lay out each year from the last paycheck on: what pays for it, what is left afterward and whether the savings still last once Social Security and Medicare begin.
If the numbers fall short, the plan shows what would change the answer, such as a later date, a year of part-time work or lower spending in the early years.
How Do I Pay for the Years Before Social Security and Medicare?
That is one of the main questions the plan is built to answer.
We lay out which accounts and savings are available first, what may need to be preserved for later and how long those resources have to carry you before other income and coverage begin.
The goal is not simply to find money you can reach. It is to make sure using it now does not create a problem later.
What Should I Expect from a Fiduciary Financial Advisor If I Retire Early?
The advice should connect the retirement date, the years without a paycheck, the accounts you will spend from, Social Security, health coverage and the investment plan.
Holland Capital acts as a fiduciary when providing financial planning and investment advice. If a recommendation would also increase our fee, such as moving your 401(k) into an account we manage after you leave the job, you hear that from us before you act on it.
The point is to know whether the date works before you give up the paycheck, and to know what the money has to do once you do.
Do I Need a Fiduciary Financial Advisor with an Office in Port Orange?
No. The work is done with your accounts and your numbers, and most meetings are by video or phone, which fits around a job.
When a face-to-face meeting would help, it takes place by appointment at the Regus center at 444 Seabreeze Boulevard in Daytona Beach, about 15 minutes away.
Photo: Steven Pignataro / Wikimedia Commons / CC BY-SA 3.0, cropped.
