Making Work Optional: The Steps to Financial Independence

In this Master the Green you'll learn:

💰 How to plan for risks in retirement

💰 The importance of aligning your investments with your expenses

AND

⛳ The one question you should ask before every shot

One part golf, all parts money

Let's tee this one up🏌️

Walking Away At the Top of Your Game

I recently sat down with an executive who was at the top of his game. 

He was a highly sought-after consultant who had assembled a team that helped their clients achieve immense success in engagement after engagement. This success translated to a mid-six-figure income and a significant portfolio of financial assets that included stocks, mutual funds, and a portfolio of commercial real estate.  

There was just one problem. 

After years of 60-hour work weeks and a grueling travel schedule, he was burnt out.  He recognized that his work - while rewarding – was degrading his life outside of work.   

He wanted out, and he needed help with a plan. 

We approached his situation through the lens of a single question

What are the potential risks of walking away from a successful career?

Risk Management – On and Off the Course

Before any shot on the golf course, there’s two things any reasonable golfer should identify –

1. What is the optimal place for your ball to land
2. What risks are present if you miss that spot

For example – I wish every single drive I hit went right down the center of the fairway, but I know 50% of the time that’s not going to happen. 

So, I have to acknowledge the risks:

1. Are there any bunkers to the left or right of my target that my ball could land in?
2. Are there any trees that could obstruct my approach shot?
3. Is there any water I should try to avoid?

Instead of just focusing on the optimal place to land my ball, I’m also accounting for all the suboptimal (and highly probably) outcomes that could arise.    

For this client, we identified three risks that could derail his ability to walk away from work: 

1. His ability to replace his income
2. The impact of market volatility on his investments
3. Securing health care coverage for his family (he was married with two teenage children)

Once we identified the risks, we attacked each one in a systematic fashion so he could confidently walk away from his job knowing we had a plan.

Making Work Optional: The Steps to Financial Independence

Making work optional isn't just about reaching a certain number in your investment accounts—it's about building a financial plan that allows you to step away from your career with confidence.

The idea of leaving behind a steady paycheck can feel daunting, even if you’ve built significant savings – as was the case for this client.  The solution was to identify the risks that this life transition presented and to develop a plan to address each in a systematic fashion.   

Once we broke it down, there were three critical steps that we took to turn his dream into reality. 

If you’re facing a similar situation, here are three steps you can take to bolster your confidence before taking the leap to the next stage of life.

Step 1: Replace Your Paycheck With a Plan

The first and most important question to answer is:

How will you replace (or supplement) your income if you stop working?

A steady paycheck provides more than just cash flow—it offers security and predictability. To walk away from work or start a passion project with confidence, you need to build a system that replicates that sense of security.  This starts with understanding exactly how much you'll need to cover your expenses each year and where that money will come from.

A good rule of thumb is to break your spending into two categories:

• Essential expenses: Housing, healthcare, groceries, insurance, and other must-haves.
• Lifestyle expenses: Travel, dining out, hobbies, and the experiences that make life enjoyable.

Once you have a clear picture of your spending needs, you can map out how your portfolio, Social Security (if applicable), and any other income sources will provide the cash flow to support your lifestyle.

It’s important to note that you’re walking away from work in your 40s or 50s, the distributions from your investments may be higher early on until other income sources – like Social Security, pensions, or income from business ventures – kick in. 

The goal is to build a reliable system of withdrawals that feels as steady as a paycheck, without the anxiety of running out of money.

Step 2: Build Your Investment Buckets

One of the biggest fears about relying on your portfolio for income is watching your investments fluctuate with the market. One potential solution is to organize your portfolio into different investment buckets—each designed to serve a different time horizon.

Here's how the bucket strategy works:

• Bucket 1: Cash & Short-Term Needs (Years 1-3): This bucket holds enough cash and conservative investments to cover your first few years of expenses. It's your safety net—money that won’t be affected by short-term market swings.
• Bucket 2: Mid-Term Growth (Years 4-10): This bucket contains a mix of stocks and bonds that are designed to provide moderate growth with less volatility. You’ll tap into this bucket when your short-term funds run low.
• Bucket 3: Long-Term Growth (10+ Years): This is where the majority of your portfolio lives—stocks and other growth investments that will fuel your financial independence for decades. The longer this money stays invested, the more time it has to compound.

This system helps you weather market downturns without feeling forced to sell investments at the wrong time. It also creates a natural flow of replenishing each bucket as you spend down your cash reserves.

Step 3: Secure Your Healthcare Coverage

For those retiring before age 65, healthcare coverage is often the biggest roadblock to making work optional. Without an employer plan, you'll need to bridge the gap until Medicare eligibility.

There are several options to consider:

• COBRA Coverage: Extends your employer health plan for up to 18 months, but often at a much higher cost.
• Affordable Care Act Plans: Subsidized health insurance through the healthcare marketplace, with costs tied to your income level. Careful planning around how you draw income in early retirement can help you qualify for premium tax credits.
• Private Insurance Plans: Purchased directly through insurers, often at a higher premium.

A comprehensive financial plan will factor in healthcare costs as a core expense—not just as an afterthought.

Build Confidence Through Preparation

Making work optional isn’t about hitting a magic number—it’s about creating a plan that gives you confidence. Replacing your paycheck, structuring your investments, and securing healthcare coverage are the building blocks of financial independence.

With the right plan in place, you can transition from saving for tomorrow to fully living today—knowing your wealth will support the life you’ve worked so hard to build.

Are you ready to take the first step toward making work optional?  If so, there's three ways I help people like you:

Ask me anything

Do you have money questions?  I’m here to help.  No cost or obligation to you.  As a newsletter subscriber, I’m happy to take 30 minutes out of my day to help you, and I'll do my best to be sure you leave with answers to your most pressing financial questions.

Let’s build your financial plan

Over the course of 90 days, we'll provide you with a clear picture of where you currently are and the steps you should take to achieve your financial goals. 

During an introductory call, we’ll have a chance to discuss to scope of work and cost so you can make an informed decision before diving in. 

Let’s work together

Hiring a financial advisor is a decision most people only make once in their lives - so we don't take it lightly.  If you’re considering adding a financial advisor to your team, we'll go through a three-step process to show you how we work with clients, and let you make the decision if it's a good fit for you or not. 

If you've never considered hiring an advisor before, this is a great way to see what comprehensive financial planning looks like.

Schedule a 30-minute call to get started today.