David Giertz Explains What It Takes To Retire Early

Since the late 1980s David Giertz has been helping people save for retirement. He has been a progressive financial advisor for Financial Horizons Security Corporation, Citicorp Investment Services, and Nationwide Financial. He says one thing he comes across fairly often is people wanting to know if they can retire early, around ages 50 or 55. He says this is doable but you have to plan for this well ahead of time so you have enough set aside to do this and have the money in the right sorts of accounts.

One thing David Giertz cautions is that taking money early out of a 401(k) or traditional IRA is very costly as what is taken out is penalized by the IRS. For this reason he says those who are planning to retire early should also be putting money into a Roth IRA. In this type of account you can take the money out and not have it penalized by the government. He does say, though, that you have to earn less than $118k a year to qualify for a Roth IRA.

If you want to retire early you have to save as much as you can, he says. He points out that someone retiring at the traditional age of 65 should have 15 times their annual income put aside. This means at age 60 someone out to have 10 times their annual income saved. If someone wants to retire five or 10 years before that they are going to have to really work hard to get as much put away as possible.

David Giertz also says it’s not good enough to just save money. You also need to invest it in a mix of stocks and bonds that you are comfortable with. Money in a savings account is losing money to inflation and the only real way to grow your money is to get stock market returns, he says. He recommends that if you have more money saved than you can put in a 401(k) or IRA you should open an after-tax account and invest the money through that.