I hear this recurring theme every single day: “I want to retire early. I want to be financially independent by the time I reach 55.” (There’s got to be something about 55 because that’s the age everyone references).
Throughout this note, I will reference current tax law. Tax rules can change, but this should provide a helpful framework.
Let’s start with the standard deduction for a married couple filing jointly. In 2026, it is $32,200. If it grows at 3% annually, it would be roughly $50,000 in 15 years.
In retirement, one strategy is to withdraw an amount from pre-tax retirement accounts that aligns with the standard deduction. For example, a $50,000 distribution could be largely offset by a $50,000 deduction.
Bucket 1 – Pre-tax accounts are typically the least efficient assets to leave behind, so it often makes sense to draw from them earlier. Assuming a 6% withdrawal rate, this leads to a target of approximately $833,000 in pre-tax assets at retirement.
If you currently have $150,000 in pre-tax accounts and assume a 7.8% return, contributions may need to be limited to about $14,000 annually to stay within that target.
Next is ROTH, Bucket 2 – In 2026, contribution limits are $7,500 per person, or $15,000 for a couple. With $250,000 already in Roth accounts, $15,000 in annual contributions, and a 7.8% return, this could grow to about $1.1 million. At a 4.5% withdrawal rate, that produces roughly $49,500 per year of tax-free income. Roth contributions also remain accessible if needed.
Third, Bucket 3 – Joint brokerage account. This provides the most flexibility and is especially important for those targeting early retirement. It does create ongoing tax exposure through dividends, interest, and capital gains, so investment management and tax-loss harvesting are important.
If the goal is $10,000 per month, or $120,000 per year today, that would be about $187,000 annually in 15 years assuming 3% inflation. With approximately $99,500 coming from the first two buckets, the remaining $87,500 would need to come from the brokerage account.
At a 4.5% withdrawal rate, that implies a balance of about $1.95 million. Starting with $300,000 today and assuming a 7.8% return, annual contributions of roughly $38,000 would be needed.
This is a framework, not a one-size-fits-all plan. Factors like pensions, inheritances, and employer benefits all matter.
When we meet, we map this out together to answer two key questions:
- Am I on track?
- What should I be doing differently?
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If you’re a high-achieving professional and ready to take control of your finances and create a plan that reflects your values, let’s talk. Together, we can make sure your story is one of security, generosity, and purpose.
–Nic
Opinions expressed are those of the author/speaker and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. The forgoing is not a recommendation to buy or sell any individual security or any combination of securities. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
