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Yes, there are two methods to access your retirement savings, excluding hardship withdrawals, before the age of 59 ½. The most popular method is through the Rule of 55. A much less popular method is through the 72T rule. Any withdrawals other than allowed hardships, the Rule of 55 and the 72T rule may be subject to a penalty by the IRS.

Excluding disability benefits, one is typically eligible for Social Security Income benefits as early as age 62. Keep in mind that if you start drawing on your Social Security benefits at age 62, you may receive a reduced amount versus waiting until the full benefit age around 66 to 67. Also keep in mind if you wait until the age 70, you will likely receive an increased benefit. Some people are better off taking the Social Security benefit at 62 and some are better off taking it at 70. Each person has to make that decision for themselves when to start drawing their Social Security income.

The answer to this is too long and possibly too complicated but understand that there are Variable Annuities, Fixed Annuities and Fixed Index Annuities. At AFI, we steer clear of Variable Annuities and will happily explain why. Fixed annuities are ok for a few but typically we prefer a Fixed Indexed Annuity with high index performance rates, no risk of market losses, no cap rates, maximum participation rates and low to no spreads which produces the highest rates of return, commonly reaching double digits.

Your Financial Advisor is either making money off of you through “Transaction Fees”, a “Management Fee”, Mutual Fund front-loaded commissions and/or Mutual Fund 12B-1/Expense ratio fees. 

Many companies have gotten away from the transaction fees but there are still many left charging as much as $35 to $50 for a transaction fee. Other companies charge no transaction fees. Some companies charge management fees as low as .5% and all the way up to 2% here in our local market. How much is too much can only be decided by you. If you are happy with the performance of your investments, you may not care how much you are paying your advisor. 

An “Expense Ratio” is an additional fee you are paying for certain “funds” that most people aren’t even aware that they are paying. Expense ratios can run as low as .02% but all the way up to an additional 2% on top of what you are already paying your advisor. Many advisors choose funds with high expense ratios because they earn higher commissions off the higher expense ratios regardless if the fund is performing as well as other funds. 

All we can say is to find out exactly how much you are paying in fees and then decide if you are getting the best deal. If there are funds out there with higher rates of return and lower expense ratios but your advisor chose the more expensive ones… you should consider looking around for an advisor that will put your needs over their own.

We often meet people that tell us they aren’t sure if they have enough to retire. In these situations, we simply have to sit down together to go over all of their savings, retirement accounts, social security income, other potential sources of income that they often have not considered and we formulate a plan. One might be surprised at the resources available to them that they never even thought about but that is why you should talk to financial professionals who have many years of experience in the financial industry.