If you’re dreaming about stepping away from full-time work at 60, you’re not alone. Maybe you want more time to travel, volunteer, or just slow down. The big question is — can you afford it? – The answer depends on your lifestyle, spending habits, debts, health, legacy plan, and more.  

– If you’re thinking about retiring at 60, there’s more to it than just your investment balance. You’ll also want to think through things like when to start Social Security and how to bridge the gap until Medicare kicks in. 

Portfolio targets for retiring at 60 

Retiring at 60 is still technically retiring early—you’re not eligible for Social Security quite yet (age 62), and don’t qualify for Medicare (age 65)–  for much of the population, so you’ll still need to plan your withdrawals – strategically, being mindful of how market volatility may impact your sustainable withdrawal rate. Here are the portfolio requirements for different spending levels: 

Portfolio requirements by expense level 

For someone planning to spend around $120,000 a year, you may need roughly $3 million saved if you plan to fully retire. But if you can bring in even $100,000 a year through part-time work or rental income, that number can drop by nearly half.  Using the widely accepted 4% withdrawal rule, here are some withdrawal rates for 25-year retirement: – 

Income Generated by Portfolio Size (at 4% withdrawal rate) 

Portfolio Size	Annual Income	Bridge Income Needed for Various Expense Levels
$500,000	$20,000/year	$60K bridge for $80K expenses; $100K bridge for $120K expenses
$1.5 million	$60,000/year	$20K bridge for $80K expenses; $60K bridge for $120K expenses; $100K bridge for $160K expenses
$2.0 million	$80,000/year	Covers $80K expenses; $40K bridge for $120K expenses; $80K bridge for $160K expenses
$2.5 million	$100,000/year	Covers $80K expenses; $20K bridge for $120K expenses; $60K bridge for $160K expenses; $100K bridge for $200K expenses
$3.0 million	$120,000/year	Covers $80K–$120K expenses; $40K bridge for $160K expenses; $80K bridge for $200K expenses
$3.8 million	$152,000/year	Covers $80K–$120K expenses; $8K bridge for $160K expenses; $48K bridge for $200K expenses; $98K bridge for $250K expenses
$4.0 million	$160,000/year	Covers $80K–$160K expenses; $40K bridge for $200K expenses; $90K bridge for $250K expenses
$5.0 million	$200,000/year	Covers $80K–$200K expenses; $50K bridge for $250K expenses
$6.3 million	$252,000/year	Covers all expense levels shown ($80K–$250K) without bridge income

As you can see, bridge income can be a big help when planning your nest egg. Generating $100,000 annually through consulting, part-time work, or investment income can substantially reduce your needed portfolio – when compared to complete financial independence in these scenarios. 

The traditional salary multiple guideline suggests having six to eight times your annual salary saved by age 60. For example, someone earning $200,000 would target $1.2-1.6 million. While this benchmark works for conventional retirement at 65, it -may fall short for retiring at 60 without some bridge income or lifestyle adjustments. 

Evaluate your lifestyle requirements 

At 60, you likely have clearer visibility into your retirement spending patterns and financial commitments than you did in your 40s or 50s. This creates opportunities to make strategic decisions that can significantly impact your required portfolio size. 

Housing and relocation decisions 

Geographic relocation becomes increasingly feasible at 60 as career constraints diminish. Moving from high-cost metropolitan areas to regions with lower living expenses -may reduce your required portfolio by millions while potentially enhancing your retirement lifestyle. 

Another important consideration is the tax implications of different states. States without income taxes can provide meaningful savings on retirement account withdrawals and Social Security benefits. Property tax differences also impact your ongoing housing costs substantially. 

As you consider a change in geography and state during retirement, downsizing decisions may also affect both your upfront capital and ongoing expenses. Downsizing from a large family home to a smaller home more suitable for you as you age may also inject significant assets into your retirement portfolio while reducing property taxes, insurance, and maintenance costs. 

Healthcare planning considerations 

Healthcare costs often become more predictable and pressing at 60. Current health conditions and family medical history should inform both your expense budgeting and insurance planning strategies. 

Long-term care insurance deserves serious consideration at this age. Premium costs increase significantly after 60, but the coverage becomes more relevant as you approach ages when care needs typically emerge. Whether you have a LTC policy, or choose to self insure, this can have a material impact on the required portfolio balance necessary to cover your retirement expenses, including LTC.  

Prescription medication costs and specialist care often increase during your 60s. Factor these evolving healthcare needs into your retirement expense planning, particularly during the five-year gap before Medicare eligibility. You may also want to consider Medicare supplemental plans to make your out-of-pocket costs more predictable.  

Travel and lifestyle priorities 

Early retirement years often represent peak travel and activity periods before health limitations potentially constrain these pursuits. Many 60-year-old retirees -prioritize expensive travel plans during their initial retirement years. 

When planning for retirement lifestyle, consider whether your retirement spending will follow a declining pattern—higher expenses in early retirement years that decrease as you age and become less active—often referred to as “retirement stages” spending. Or, whether you’re willing to adjust your lifestyle each year as markets go up and down. Your spending pattern affects your portfolio withdrawal strategy and asset allocation decisions. 

Debt and financial obligations 

Outstanding debt obligations require strategic evaluation at 60. Would you prefer to have lower monthly expenses, or are you comfortable carrying debt into retirement? Certain debt, like low-rate mortgage debt, might make sense to maintain if investment returns exceed borrowing costs, while high-rate credit card debt should typically be eliminated before retirement. 

Family financial commitments often persist into your 60s. Grandchildren’s education expenses, adult children’s financial support, or aging parent care can represent substantial ongoing costs that must be incorporated into your retirement planning. 

Maximize your final earning years 

Your late 50s and early 60s often represent peak earning potential, creating opportunities to accelerate wealth accumulation through sophisticated strategies not available earlier in your career. 

Foundation retirement strategies 

Maximum contribution strategies should be your starting point: 

• 401(k) contributions: $23,500 plus $7,500 catch-up in 2025 (with a special catch up for those ages 60-63)
• IRA contributions: $7,000 plus $1,000 catch-up 
• HSA maximization: $4,300 individual or $8,550 family coverage 

Catch-up contributions may provide substantial advantages for 60-year-old retirees. The additional $8,500 in annual tax-advantaged savings, compounded over several years, can meaningfully impact your retirement readiness. 

Roth versus traditional contribution decisions become critical as you approach retirement. Maintaining some tax diversification provides flexibility in what your annual income picture looks like each year, your current tax bracket, expected retirement tax rates, and legacy planning goals should inform these choices. 

Final executive compensation decisions 

Many high earners face significant compensation decisions during their final working years. Stock option timing, deferred compensation elections, and equity acceleration choices can substantially impact your retirement portfolio. 

Consider spreading large equity compensation events across multiple years to manage tax brackets. Coordinate these decisions with your retirement timeline to optimize both tax efficiency and cash flow needs. 

Executive severance packages often include valuable benefits beyond cash payments. Extended healthcare coverage, outplacement services, and non-compete payment arrangements can often be negotiated, and provide meaningful bridge benefits. 

Large-scale charitable giving strategies 

For those with philanthropic interests, gifting strategies become more relevant as wealth accumulates and tax planning needs evolve. Donor-advised funds allow immediate tax deductions while maintaining control over distribution timing. 

Charitable remainder trusts can provide income streams while offering tax benefits and legacy planning advantages. These strategies work particularly well for high earners with appreciated assets approaching retirement. 

Consider bunching charitable deductions into single tax years to exceed standard deduction thresholds, particularly during high-income years before retirement. 

Create your bridge strategy 

Retiring at 60 creates a two-year gap before early Social Security eligibility at 62 and a five-year wait for Medicare. Your income plan must address both income replacement and healthcare coverage during this transition period. This gap also presents significant planning opportunities to take advantage of lower income tax years, and minimize future challenges—RMDs, cost of Medicare in the future, Social Security tax torpedo. 

Social Security optimization timing 

Social Security claiming decisions become concrete planning considerations at 60. While you can claim benefits as early as 62, – this decision permanently reduces your monthly payments by approximately 25-30% compared to full retirement age benefits. 

The decision involves weighing immediate cash flow needs against lifetime benefit optimization. Someone with a substantial retirement portfolio might delay claiming to maximize benefits, while others might claim early to preserve portfolio assets, especially if leaving a legacy or inheritance is a priority. 

Consider spousal benefit strategies if you’re married. Coordinating claiming strategies between spouses can optimize household Social Security income over both lifetimes. 

Pre-Medicare healthcare planning 

Healthcare coverage represents one of your largest expenses during the five-year Medicare gap. If you’re eligible, COBRA may provide up to 18 months (36 months in rare circumstances) of continued employer coverage, though at significantly higher premium costs. 

Private health insurance through ACA marketplace plans become your primary long-term coverage option. Premium costs vary dramatically by location and income level, potentially requiring substantial budget allocation for healthcare expenses. 

Health Savings Accounts become particularly valuable for 60-year-old retirees. The triple tax advantages make HSAs powerful vehicles for funding healthcare expenses, including Medicare expenses, throughout retirement 

Income bridge strategies 

Taxable investment accounts provide flexible income access without early withdrawal penalties. These accounts allow you to manage tax liability year by year based on your other income sources. Any realized gains from taxable accounts would be subject to preferential capital gains treatment instead of ordinary income taxes if the investment was held for longer than 1 year.  

Real estate investments -may generate steady cash flow through rental income while providing inflation protection and tax advantages through depreciation deductions. 

For those that would prefer a gradual transition into retirement, part-time work or consulting -can help you leverage your established professional network and unique skills. Many 60-year-old retirees find fulfillment in selective work arrangements that provide income while allowing substantial lifestyle flexibility. 

Advanced Roth conversion opportunities 

Early retirement may create opportunities for strategic Roth conversions during lower-income years. Converting traditional retirement account assets to Roth accounts can optimize your lifetime tax situation and provide tax-free income on qualified withdrawals in later retirement years. 

Coordinate conversion strategies with other income sources to help manage tax brackets effectively. The goal is to convert assets during years with lower overall income before Social Security benefits begin. Also be mindful of the impact these conversions have on the cost of Medicare.  

Plan your customized retirement strategy 

Retiring at 60 offers advantages over earlier retirement ages while still requiring sophisticated planning. Your proximity to Social Security and Medicare creates opportunities that don’t exist for retirees in their 40s and 50s. 

The complexity of coordinating final compensation decisions, optimizing Social Security claiming strategies, managing healthcare coverage transitions, and implementing tax-efficient withdrawal strategies requires professional guidance tailored to your unique circumstances. 

Everyone’s version of retirement looks different — and your plan should too. If you’re wondering what retiring at 60 could look like for you, Contact BPM’s wealth management team to develop comprehensive strategies tailored to your final earning years, benefit optimization timeline, and retirement lifestyle objectives. 

This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual. This information is not intended for use as tax advice. The examples given are hypothetical and are for illustrative purposes only. Actual results may vary from those illustrated.  

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. each an SEC Registered Investment Advisor | BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc.  

If you’re considering retirement at 62, you’ve reached what many consider the traditional retirement milestone—the age when many Americans step away from their careers and begin accessing the benefits they’ve been building toward for decades. 

At 62, your retirement planning landscape looks quite different from those considering earlier retirement. You have access to Social Security benefits and just three years until Medicare eligibility kicks in, which fundamentally changes your planning dynamics. Instead of creating complex workarounds and bridge strategies, you’re working within established systems designed to support retirees. 

The question shifts from “Can I afford to retire early?” to “How do I optimize my retirement income and make the most of my legacy planning now that traditional benefits are available?” 

Your financial planning focus naturally centers on maximizing portfolio efficiency, coordinating multiple income sources, and implementing sophisticated tax strategies that may not have been as relevant during your wealth-building years. 

How much do you need in your portfolio to retire at 62? 

Retiring at 62 often allows for more traditional withdrawal rates since you have immediate access to Social Security income and only a short bridge to Medicare. This puts you in a much more favorable position than earlier retirees. 

How much you’ll need to save depends primarily on your target spending goals and needs.  

Let’s take a closer look at a visualization using a traditional 4% withdrawal rate.  

Annual Expenses	Portfolio Needed (No Bridge Income)	Portfolio with $100K Bridge Income
$100,000	$2.5 million	$1.0 million
$150,000	$3.8 million	$2.3 million
$200,000	$5.0 million	$3.5 million
$300,000	$7.5 million	$6.0 million
$400,000	$10.0 million	$8.5 million

Keep in mind that these calculations don’t heavily rely on the income from your Social Security benefits. While Social Security provides valuable supplemental income, it often won’t support luxury lifestyles on its own. 

As you’re crunching some numbers, traditional salary multiple guidelines become much more accurate at 62. Having eight to ten times your annual salary saved typically supports retirement, assuming you’re not maintaining extremely high spending relative to your earned income. 

You can also use the 25x expense rule—saving 25 times your annual expenses. For example,  someone spending $200,000 annually could need about $5 million, which aligns with the preliminary portfolio calculations above. 

Understand your retirement lifestyle needs 

At 62, you’re in a particularly advantageous position when it comes to retirement planning.  

You likely have much clearer visibility into your spending patterns and long-term financial commitments than you did in earlier decades. This clarity can create valuable opportunities for strategic decisions that can significantly impact both your required portfolio size and how you want to approach legacy planning. 

Daily living expenses 

Your retirement spending will likely shift from your working years in some predictable ways. Those daily commuting costs could disappear while healthcare expenses typically increase. Your dining and entertainment patterns may shift as your schedule becomes more flexible and you have more time to enjoy the activities you love. 

Here’s something many retirees discover: spending often peaks during those initial retirement years as they pursue delayed travel plans and activities they’ve been looking forward to for years, then moderates as they settle into comfortable routines. It’s worth thinking about whether your retirement will follow this front-loaded spending pattern or maintain steady expenses throughout. 

Long-term care considerations 

Long-term care planning shifts from something you might think about someday to something much more immediate at 62. Your current health status and family history should inform both insurance decisions and care preference planning. 

Something important to keep in mind is that long-term care insurance premiums tend to increase substantially after 62, making current decisions somewhat time-sensitive. However, self-insurance through portfolio assets can be another viable option. 

Healthcare expenses 

Healthcare costs become both more predictable and more substantial at 62. Prescription medications, specialist care, and preventive treatments often increase during your 60s and beyond—but at least you can plan for them more accurately than when you were younger. 

The three-year gap until Medicare eligibility requires specific planning, but COBRA or private marketplace coverage can bridge this period much more easily than the longer gaps faced by earlier retirees. That shorter timeline works significantly in your favor. 

Travel and activity priorities 

Early retirement years often represent peak spending periods for travel and active pursuits. Many 62-year-old retirees choose to front-load expensive travel plans while they’re healthy and energetic—and this makes a lot of sense from both a lifestyle and financial planning perspective. 

Consider sequencing your retirement activities based on physical demands and costs. International travel and adventure activities might make sense during those initial retirement years, while domestic and less physically demanding activities can extend throughout your retirement as you age. 

Legacy planning opportunities 

At 62, wealth transfer planning shifts from future consideration to immediate implementation. You may find yourself helping with grandchildren’s education expenses, adult children’s home purchases, and various family financial support needs that often align with this life stage. 

Wedding expenses for children, educational funding for grandchildren, and down payment assistance represent substantial potential cash outflows that should be incorporated into your retirement planning—if that’s something you want to do. 

When it comes to your estate plan, sophisticated strategies such as grantor-retained annuity trusts, charitable remainder trusts, and generation-skipping trust strategies are most effective when implemented before significant health changes occur. The window for implementing these strategies effectively can narrow as you age. 

Current federal estate tax exemption levels provide substantial gifting opportunities that may not persist indefinitely. It’s helpful to coordinate your annual exclusion gifts and lifetime exemption usage with your retirement cash flow needs to help ensure everything works together smoothly. 

Optimize your financial strategies 

Your last few working years or early retirement period create unique opportunities for financial optimization that simply aren’t available during pure wealth-building phases or later in retirement. 

Foundation retirement contributions 

Even at 62, maximum annual contributions remain valuable if you’re still working: 

• 401(k): $23,500 plus $7,500 catch-up in 2025 (If you’re 60-63, you can get an extra catch-up limit) 
• IRA: $7,000 plus $1,000 catch-up 
• HSA: $4,300 individual or $8,550 family coverage plus $1,000 in catch-up contributions 

These contributions provide final opportunities for tax-advantaged savings while you potentially still have earned income to support them. Every dollar you can shelter from taxes now can help you grow your retirement accounts.  

Pension distribution decisions 

If you’re fortunate enough to have a traditional pension plan, you’re likely facing some irrevocable decisions at 62. The choice between lump sum versus annuity elections will affect your retirement income structure for the rest of your life. 

Lump sum distributions provide portfolio control and legacy planning flexibility, but they shift longevity and investment risk to you. Annuity payments provide predictable income but limit flexibility and legacy opportunities. 

You’ll want to consider your other income sources, risk tolerance, and legacy goals when making these permanent decisions. There’s no universal right answer—it depends entirely on your specific circumstances and what matters most to you. 

Social Security filing strategy 

Here’s where things get interesting from a planning perspective. Social Security claiming at 62 permanently reduces your monthly benefits by approximately 25-30% compared to full retirement age benefits. For high earners, this reduction might be perfectly acceptable given your modest reliance on Social Security for lifestyle support. 

However, delayed claiming until age 70 can increase benefits by 8% annually after full retirement age, potentially making the delay worthwhile for longevity planning and spouse benefit optimization. 

If you’re married, you have additional claiming strategy options that single retirees simply don’t have access to. Spousal benefits, survivor benefits, and coordinated timing can optimize household Social Security income over both lifetimes. 

Consider which spouse should claim early versus delay based on earnings records, health status, and overall retirement planning goals. These decisions affect survivor benefits that could last decades, so they deserve careful consideration and probably some professional guidance. 

Plan your healthcare transition 

Healthcare planning at 62 focuses on bridging those three years until Medicare, while potentially managing increasing medical needs and prescription costs. 

Pre-Medicare coverage options 

COBRA can extend your employer coverage for up to 18 months, which gets you halfway to Medicare eligibility. However, premium costs increase substantially when employers stop contributing to coverage costs, so you’ll want to budget accordingly. 

Private marketplace health insurance plans provide alternatives with potentially different provider networks and prescription coverage. When evaluating these options, compare total costs including premiums, deductibles, and out-of-pocket maximums to get the full financial picture. 

Medicare preparation planning 

Medicare enrollment requires active decisions about coverage types and supplemental insurance that will affect your healthcare experience for years to come. Original Medicare with Medigap policies offers different trade-offs than Medicare Advantage plans, and understanding these differences now will help you make better decisions. 

Understanding Medicare coverage limitations also helps inform long-term care insurance decisions and health savings account usage strategies for the years ahead. 

Medicare Part B and Part D premiums also include income-related monthly adjustment amounts (IRMAA) for high earners. These surcharges apply based on your modified adjusted gross income from two years prior, which can create some timing challenges. 

Planning withdrawal strategies and Roth conversions with IRMAA thresholds in mind can help minimize these additional premium costs throughout your Medicare eligibility. It’s worth understanding these thresholds now, while you still have time to plan around them. 

Health Savings Account optimization 

HSAs provide unique advantages for retirees with high-deductible health plans, and these advantages actually increase after age 65. HSA withdrawals for non-medical expenses face only ordinary income tax without penalties after 65, making them similar to having an additional retirement account. 

Maximizing HSA contributions during your final working years and preserving balances for retirement healthcare expenses can provide significant tax advantages throughout your retirement. 

Create your comprehensive retirement plan 

Your retirement at 62 is about more than just having enough money—it’s about optimizing all the systems and benefits you’ve earned while creating a legacy that reflects your values and supports the people you care about. 

If you’re ready to explore what retirement at 62 could look like for your specific situation, contact BPM’s wealth management team to develop comprehensive strategies that coordinate Social Security benefits, healthcare transitions, tax optimization, and legacy planning tailored to your circumstances.  

This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual. This information is not intended for use as tax advice. 

The examples given are hypothetical and are for illustrative purposes only. Actual results may vary from those illustrated.  

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. each an SEC Registered Investment Advisor | BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc.  

The blockchain and digital assets industry enters 2026 at an inflection point. What began as experimental technology has evolved into essential financial infrastructure, with institutional adoption accelerating at unprecedented rates.  

As regulatory clarity emerges and traditional financial systems converge with blockchain innovation, business leaders face critical decisions about digital asset strategies. The coming year will separate early adopters who capitalize on these transformative trends from those who risk being left behind in an increasingly digital financial ecosystem. 

Five Trends to Prepare for in 2026 

1. Institutional Adoption Reaches New Heights 

The institutional wall of resistance has crumbled. With 59% of institutions planning to allocate over 5% of their assets under management to cryptocurrencies in the coming year, and 75% expecting to increase allocations overall, 2026 marks the year digital assets become a standard portfolio component rather than an alternative investment. This shift reflects growing confidence in market infrastructure and regulatory frameworks that have matured significantly over the past year. 

State Street’s research confirms this momentum, revealing that nearly 60% of institutional investors plan to increase digital asset allocation, with average exposure expected to double within three years.  

2. Stablecoins and Tokenization Transform Financial Infrastructure 

The stablecoin revolution has arrived. With 84% of institutions now utilizing or expressing interest in stablecoins for yield and transactional convenience, these digital dollars are reshaping how value moves through the global financial system. 2025 witnessed banks, fintech companies, and even merchants rapidly developing stablecoin strategies. In 2026, this experimentation will transform into widespread implementation. 

Circle’s CEO projects the regulated USD stablecoin market to grow to $1 trillion by 2026, driven by use cases extending far beyond simple payments. Asset tokenization addresses fundamental inefficiencies—slow settlement times and high intermediary costs. Some industry projections suggest tokenized assets could reach $2 trillion by 2030, while Boston Consulting Group estimates up to $16 trillion by 2030 and other forecasts range as high as $30 trillion. 

3. Regulatory Clarity Unleashes Market Potential 

Regulatory clarity stands as the number one catalyst for digital asset growth, and 2026 will deliver the frameworks the industry has long awaited. The SEC’s Crypto Task Force is developing comprehensive regulatory guidance, while the CLARITY Act provides clear jurisdictional boundaries between the CFTC and SEC. This transition from enforcement-driven to guidance-based regulation fundamentally changes the risk calculus for institutional participation. 

The shift extends beyond federal regulations. Following Wyoming’s Frontier Stable Token and Illinois’s comprehensive frameworks, we anticipate additional states will compete for digital asset business through progressive legislation. For business leaders, this regulatory clarity removes the primary barrier to adoption, making 2026 the year to move from planning to implementation. 

4. DeFi Opens Doors to Institutional Participation 

Decentralized finance stands ready for its institutional moment. While only 24% of institutional investors currently engage with DeFi protocols, this figure will triple to 74% within two years as compliance solutions mature. The Financial Action Task Force’s Travel Rule requirements for DeFi platforms have established the compliance foundation necessary for institutional participation. 

Interest extends beyond Bitcoin and Ethereum to significant ecosystems like XRP and Solana, with new exchange-traded products expanding access. Innovative compliance solutions like verifiable credentials allow institutions to maintain privacy while meeting regulatory requirements, removing the final barriers to DeFi participation. Investment committees exploring DeFi in 2026 will find mature protocols offering yields and services previously exclusive to traditional finance. 

5. Onchain Finance Infrastructure Comes of Age 

Despite technical hurdles, blockchain scalability improvements and regulatory clarity signal an inflection point for onchain finance. Major financial institutions have moved beyond pilots to production deployments, testing scalable use cases for everything from trade finance to securities settlement. Layer-2 solutions and technologies like zero-knowledge rollups will achieve mass adoption in 2026, finally delivering the speed and cost efficiency blockchain has long promised. 

Swift’s live trials of digital asset transactions exemplify how traditional infrastructure providers are bridging old and new systems. As interoperability challenges resolve and security standards mature, technology executives must prepare for blockchain integration across core business processes, from supply chain management to financial reporting. 

Learn more about our Blockchain and Digital Assets Consulting Services

Strategic Actions for Company Leaders 

For C-Suite Executives: 

• Develop comprehensive digital asset policies covering investment, custody, and operational use cases 
• Establish board-level oversight for blockchain initiatives with clear risk parameters 
• Allocate budget for talent acquisition and technology partnerships in Q1 2026 

For Finance Leaders: 

• Evaluate tokenized assets for treasury management and portfolio diversification 
• Implement accounting systems capable of handling digital asset transactions 
• Prepare for new tax reporting requirements as standards evolve 

For Technology Executives: 

• Assess blockchain platforms for pilot programs in non-critical business processes 
• Build internal capabilities through training and strategic hiring 
• Establish vendor relationships with established blockchain infrastructure providers 

For Compliance Officers: 

• Update KYC/AML procedures to accommodate digital asset transactions 
• Monitor state and federal regulatory developments monthly 
• Implement real-time transaction monitoring for blockchain-based activities 

Partner With BPM for Your Digital Transformation 

The convergence of traditional finance and blockchain technology presents both unprecedented opportunities and complex challenges. At BPM, we help organizations navigate this transformation with practical guidance tailored to your industry and risk profile. Our professionals combine deep knowledge of digital assets with an understanding of regulatory requirements and operational realities. 

Don’t let 2026 pass without positioning your organization for success in the digital economy. Contact BPM today to discuss your blockchain and digital asset needs. Together, we can transform industry disruption into a competitive advantage. 

Not all audits are created equal. For companies considering going public or engaging with public markets—whether through an IPO, acquisition, or merger—the difference between private company and public company audits is critical. While both AICPA and PCAOB audits share foundational principles, PCAOB audits introduce significant additional requirements in documentation, independence, and regulatory oversight.  

These enhancements result in a substantially higher level of rigor and scrutiny required to undergo a PCAOB audit—including private companies preparing to go public. Understanding these differences is crucial for effective budgeting, preparation, and risk management. Overlooking these distinctions can lead to costly delays, increased audit fees, and even reputational risk as your company transitions to the public sphere. 

The Basics: Who Does What? 

AICPA audits are designed for private companies and are conducted according to Generally Accepted Auditing Standards (GAAS) set by the American Institute of Certified Public Accountants (AICPA), providing assurance to stakeholders such as lenders and shareholders. By contrast, PCAOB audits are mandated for public companies and overseen by the Public Company Accounting Oversight Board (PCAOB)—a regulator established in the wake of the Sarbanes-Oxley Act (SOX) to protect investors and ensure the integrity of public financial reporting. 

While it might be tempting to think of a PCAOB audit as simply an “upgraded” AICPA audit, the reality is that the processes, scrutiny, and consequences are on a different level entirely. The shift affects every aspect of your audit experience—from documentation to independence requirements to regulatory oversight. 

Key Differences (From a Company’s Perspective) 

Scope and Depth 

The scope of an AICPA audit centers on providing reasonable assurance that the financial statements are free from material misstatement, giving auditors some flexibility in their approach. In contrast, PCAOB audits are not only deeper but also far more prescriptive. This is because PCAOB audits are designed to serve the interests of public investors and protect the integrity of capital markets, requiring auditors to adhere to stricter standards and deliver a broader scope of assurance than AICPA audits.  

Regardless of reliance on internal controls, PCAOB standards demand detailed substantive testing of significant audit areas. This leads to a more rigorous and extensive audit process than most private companies have previously experienced. For those accustomed to the private-company approach, the increase in expectations and scrutiny—often called “uplift”—can be substantial. This is not just an incremental step; it’s a transformation in the level of rigor and regulatory demand. 

Documentation, Sampling, and Review 

Documentation is one of the starkest areas of contrast. PCAOB audits require much more extensive and contemporaneous documentation. Companies often find themselves needing to revisit and expand prior supporting files, prepare detailed memos that meticulously assess US GAAP or IFRS, and ensure every key accounting judgment is fully substantiated with evidence. 

In many cases, key accounting conclusions that were reached under AICPA audits will be revisited as part of a PCAOB audit, as increased scrutiny is applied to complex transactions. While both AICPA and PCAOB standards permit statistical and non-statistical sampling using professional judgment, companies will notice the real difference lies in the heightened rigor and the volume of documentation required under PCAOB standards. Auditors may request re-performance or additional evidence for areas previously deemed sufficient, as PCAOB inspections drive a more exacting approach. 

Materiality thresholds are often set lower in PCAOB audits, meaning more transactions are subject to testing, and accounts or financial statement line items that were previously excluded may now be in scope. Moreover, PCAOB audits mandate a second partner review as part of their standard practice, further raising the bar for audit quality and consistency. As a result of this increased scrutiny, companies frequently need to redo or supplement documentation and procedures that were previously considered sufficient under AICPA standards. 

Independence and Permitted Services 

Independence is a critical issue for private companies preparing to go public. The PCAOB and the Securities and Exchange Commission (SEC) impose much stricter independence rules than the AICPA. Under AICPA standards, firms may provide certain non-audit services if management accepts responsibility and safeguards are implemented. 

Audit firms are barred from providing non-audit services such as bookkeeping, financial statement preparation, payroll, IT system design and implementation, valuation, actuarial services, internal audit outsourcing, legal, or expert services to their audit clients.  

Tax services are tightly restricted, particularly for executives in financial reporting oversight roles or involving the planning, marketing or opining in favor of confidential or aggressive tax strategies. The SEC’s affiliate definition is broader and captures a wider range of entities and individuals. 

As a public company, PCAOB and SEC independence requirements apply both prospectively and retrospectively to all financial periods included in your SEC filing. For IPO and SPAC transactions, the most recent full fiscal year’s audited financial statements and all subsequent unaudited interim periods must comply with these stricter standards; only earlier periods presented may follow AICPA independence rules together with the SEC’s general independence standard.  

For pre-IPO companies, a comprehensive independence review—looking at both the letter and the spirit of the rule—is essential early in the IPO process to prevent costly disruptions or regulatory scrutiny. 

Cost 

The increased rigor and scope of PCAOB audits come at a cost—sometimes a substantial one. For many companies, especially those undergoing this process for the first time, the transition can lead to inefficiencies as they navigate unfamiliar requirements and find themselves in need of external support. 

Companies making the transition should expect audit fees to be significantly higher: typically, 30–75% more expensive if SOX 404(b) internal control attestation does not apply, and up to two to five times higher if/when it does. In addition to the direct cost of the audit, companies need to budget for more staff time, greater internal involvement, and potential consulting or legal expenses in order to meet heightened compliance requirements. 

Reporting Differences 

PCAOB audit reports are generally more detailed and may include “Critical Audit Matters” (CAMs)—narratives that explain the most complex or high-risk areas of the audit and how the auditors addressed them. This level of transparency is not required in AICPA reports, which are typically shorter and do not include such disclosures. Addressing CAMs may require the involvement of technical accounting experts, particularly when dealing with complex estimates, revenue recognition, or valuation issues. This can lead to increased reliance on external advisors or specialized internal resources to ensure that the company’s positions are well-documented, defensible, and aligned with PCAOB expectations. 

Regulatory Oversight 

PCAOB and SEC rules require the public disclosure of identified control deficiencies that have been determined to be material weaknesses. In addition, the identification of errors can result in the restatement or revision of prior period financial statements. This can introduce both reputational and legal risk for public companies and result in any combination of the following – receipt of SEC comment letters, commencement of SEC enforcement actions, shareholder lawsuits, analyst downgrades or negative press. 

Unlike AICPA audits, which are subject only to periodic peer review by another accounting firm, PCAOB audits are inspected directly by the regulator. The results of these inspections, including any deficiencies, can be made public; however, the identities of the issuers subject to audit are not disclosed in PCAOB inspection reports. When an auditor fails a PCAOB inspection, additional audit procedures become necessary to ensure compliance with regulatory standards.  

This may involve revisiting previously completed audit work, gathering more extensive documentation, and performing supplemental testing in areas identified as deficient. These efforts result in increased time, cost, and resource allocation for the company, as well as potential disruptions to financial reporting timelines. Although rare, incremental audit efforts necessitated by the results of a PCAOB inspection may result in the identification of previously unidentified errors or control deficiencies.  

Learn more about our Technical Accounting Services

Common Pain Points (and How to Prepare) 

Companies undergoing their first PCAOB audit quickly realize that they will face more frequent and detailed information requests, particularly concerning controls, estimates, and  documentation of accounting policies.  For private companies preparing to go public, PCAOB audits are often subject to much tighter timelines —driven by the IPO process.  

Once a registration statement is filed, the audit schedule is compressed by the need to respond to SEC comments (often within 30 days), take advantage of favorable market windows, and keep audited annual and quarterly reviewed interim financial statements sufficiently current under SEC rules. If too much time passes, additional audit work may be needed to update financials, adding pressure and complexity. 

These dynamics mean that recordkeeping must be organized year-round, and internal teams should be prepared to provide rapid, thorough responses to auditor requests. The pace and rigor of PCAOB audits in the pre-IPO context often catches private companies by surprise, making early preparation and ongoing readiness essential to avoiding costly delays or missed market opportunities. Auditors will also require robust evidence for all key assertions and will not simply accept management explanations.  

In many cases, companies ultimately realize that their existing accounting infrastructure and personnel may not be fully equipped to meet the heightened scrutiny and accelerated pace necessary to meet tightened deadlines. The level of technical depth and documentation required can expose gaps in internal capabilities—particularly around complex areas like revenue recognition, stock-based compensation, or fair value measurements.  

Sometimes, companies are unaware of the level of sophistication needed until they are deep into the audit process, leading to last-minute scrambles for external advisors or technical accounting experts.   
 

Bottom Line 

Transitioning from an AICPA audit to a PCAOB audit is not just a regulatory box to check—it’s a fundamental transformation in process, rigor, and expectation. Companies that approach this proactively—by strengthening documentation, reviewing independence, and dedicating sufficient resources— will be much better positioned for a smooth and successful transition to public company status.  

That’s where BPM comes in.  

If you need advisory support to prepare for PCAOB audits: As a specialized group within BPM, our Technical Accounting Group (TAG) is composed of highly experienced professionals who guide companies through their most complex accounting and compliance challenges. TAG’s deep expertise in SEC filings, IPO readiness, and PCAOB audit preparation ensures that clients not only meet but exceed regulatory expectations.  

Early preparation isn’t just smart; it’s essential for safeguarding your company’s reputation and keeping your path to the public markets on track. TAG helps you get audit ready—addressing complex revenue, leases, and equity topics; sharpening SAB/SEC disclosures; aligning internal controls (SOX 404); and building robust audit packages. 

If you need auditors to execute under PCAOB standards: BPM’s PCAOB audit practice is comprised of skilled professionals with the necessary acumen to navigate the challenging regulatory environment and deliver rigorous, efficient audits to support your IPO or public company journey. 

The state and local tax (SALT) deduction has undergone its most significant transformation since 2017. On July 4, President Trump signed H.R. 1, the One Big Beautiful Bill Act (“OBBBA”), into law, bringing substantial changes to how taxpayers can deduct their state and local taxes on federal returns. For millions of Americans—particularly those in high-tax states—these modifications represent both opportunities and complexities that require immediate attention as we move through 2025. 

This analysis examines what changed, who benefits most, and how these modifications affect your tax planning strategies. Whether you’re a business owner, high-net-worth entity, or organization managing complex state tax obligations, understanding these changes is crucial for optimizing your 2025 tax position and beyond. 

Key SALT Changes Affecting High-Earners 

The OBBBA introduces a temporary but substantial increase to the SALT deduction limit. The law increases the $10,000 SALT cap to $40,000 and phases down the $40,000 SALT cap (to $10,000) at a 30% rate for taxpayers making over $500,000. For married filing separate taxpayers, the benefits are proportionally adjusted. The $40,000 cap becomes $20,000, and the income threshold drops to $250,000 for the phaseout calculation. This represents a four-fold increase for eligible taxpayers, providing significant relief for individuals   in high-tax jurisdictions. 

The income-based limitations add complexity to the new structure. An individual with $550,000 of AGI in 2025 would exceed the $500,000 threshold by $50,000. Applying the 30% phaseout, $15,000 of the deduction would be disallowed, leaving them eligible to deduct $25,000 in SALT. For higher earners, those with $750,000 of AGI would see a $75,000 reduction in their allowable deduction, which would phase down to the minimum guaranteed amount of $10,000. 

The timing of these changes creates both immediate opportunities and future planning considerations. The law increases the $40,000 SALT cap and $500,000 income threshold by 1% each year from 2026 through 2029, with the cap reset to $10,000 from 2030 onwards. This temporary nature means individuals need to consider both short-term tax optimization and long-term planning strategies. 

At BPM, we help business clients manage these complex interactions between federal and state tax obligations, ensuring you maximize available deductions while planning for future changes in the tax code. 

How Businesses can Navigate SALT Workarounds 

One of the most significant aspects of the new legislation is what it doesn’t change: the preservation of pass-through entity tax (PTET) workarounds. The OBBBA does not change SALT deductibility for either pass-through businesses—such as S corporations and partnerships—or C corporations. This represents a major victory for business owners who have relied on these state-level strategies to circumvent the federal SALT cap. 

Understanding PTET Mechanisms 

Pass-through entity taxes work by allowing businesses to pay state income taxes at the entity level rather than having individual owners pay them personally. Since the SALT deduction cap generally applies to individual taxpayers and not entities, the pass-through entity can deduct the full amount of state tax paid at the federal level. The owners then receive state tax credits equivalent to the amount paid at the entity level. 

According to the American Institute of Certified Public Accountants, many states have enacted PTET workarounds since the 2017 TCJA limitation. These programs vary significantly in their qualification criteria, election rules, and credit allowances, but they generally follow similar principles. 

Key Points for Business Owners: 

• Deductibility at the entity level, bypassing individual SALT caps 
• Dollar-for-dollar credits to owners for taxes paid by the entity subject to certain limitations 
• Elections and timing of payments vary by state 
• Coordination with multiple state jurisdictions for multi-state businesses 

The preservation of PTET workarounds under the new law means business owners can potentially benefit from both the higher individual SALT cap and the continued availability of entity-level deductions. This dual approach requires careful coordination with tax professionals to optimize the combined benefit. 

For businesses operating across multiple states, the complexity increases substantially. Different states have varying PTET rules, credit mechanisms, and conformity requirements. Some states that previously enacted temporary PTET provisions have sunset clauses at the end of 2025 and will require legislative extensions to continue these benefits. 

Learn more about our State and Local Taxes (SALT) Accounting Consulting Services

Advanced Planning Strategies for Wealth Preservation 

Planning Alert: With the temporary nature of the increased SALT cap, business owners need strategies that work both during the enhanced period (2025-2029) and after the reversion to $10,000 in 2030. 

The enhanced SALT deduction creates several sophisticated planning opportunities that require immediate attention. Given the temporary nature of these changes, timing becomes crucial for maximizing benefits while positioning for the future reversion. 

Strategic Timing Considerations 

The income phaseout mechanism presents unique planning challenges and opportunities. Individuals approaching the $500,000 modified AGI threshold should consider income timing strategies to maximize their SALT deduction benefit. This might involve: 

• Deferring income to stay below the AGI threshold  
• Accelerating deductions to reduce modified AGI calculations 
• Timing asset sales to coordinate with SALT deduction availability 
• Managing retirement plan distributions to optimize total tax impact 

Multi-Entity Structure Optimization 

For business owners with complex entity structures, the interaction between individual SALT deductions and entity-level PTET elections requires careful analysis. Some considerations include: 

Strategy	Benefit	Risk Factor
Entity-level PTET election	Full deductibility regardless of owner income	State law changes could eliminate option
Individual SALT maximization	Direct benefit on personal returns	Subject to income phaseouts and caps
Hybrid approach	Optimizes both entity and individual benefits	Requires ongoing monitoring and adjustment

The ability to use both entity-level PTET elections and enhanced individual SALT deductions creates opportunities for sophisticated tax planning. Business owners might elect PTET for a portion of their state tax obligations while maximizing individual SALT deductions through strategic income management. 

Legislative Outlook and Future Considerations 

Critical Timeline: The enhanced SALT cap reverts to $10,000 in 2030, creating a potential tax increase for businesses owners and individuals who have grown accustomed to higher deduction limits. 

The Congressional Budget Office estimates that the new law will increase federal deficits by $3.4 trillion between 2025 and 2034. This substantial fiscal impact makes future modifications to the SALT provisions likely subjects of political debate. Business owners should prepare for potential scenarios including: 

• Early sunset if fiscal pressures mount 
• Extension negotiations as 2030 approaches 
• Modified caps that differ from current provisions
• Alternative limitations that could replace the current structure 

Technology and Compliance Considerations 

The increased complexity of SALT deduction calculations, combined with varying state PTET rules, places greater emphasis on sophisticated tax compliance systems. Business owners might consider investing in: 

• Tax software capable of handling complex SALT calculations 
• Professional advisory relationships with multi-state experience
• Documentation systems that support both current benefits and future audits 
• Regular compliance reviews to help ensure ongoing optimization 

The interaction between enhanced individual SALT deductions and entity-level PTET elections requires careful tracking throughout the year. Business owners can’t simply “set it and forget it” – these strategies require ongoing monitoring and potential adjustments based on actual income and tax liability developments. 

How BPM helps clients optimize their tax positions 

The complexity of the new SALT deduction rules demands sophisticated tax planning that goes far beyond simple compliance. At BPM, we understand that business owners face a unique challenge: maximizing immediate benefits while preparing for the inevitable reversion to lower caps in 2030. 

Our Integrated Approach to SALT Planning 

We don’t view SALT deduction planning in isolation. Instead, our advisory teams integrate these strategies with broader business objectives, cash flow management, and long-term growth planning. This comprehensive approach helps to ensure that tax optimization supports rather than constrains your business development goals. 

Our process begins with a thorough analysis of your current tax position across all jurisdictions where you operate. We examine entity structures, income streams, and existing PTET elections to identify immediate optimization opportunities. Then we model various scenarios to understand how different strategies perform under changing income levels and future legislative environments. 

Specialized Services for Complex Situations 

Multi-State Business Operations: For clients operating across multiple states, we coordinate PTET elections and individual SALT strategies to maximize total benefits. Our state and local tax specialists understand the nuances of different jurisdictions and can identify opportunities for tax arbitrage between states with different approaches to pass-through entity taxation. 

Entity Structure Optimization: We regularly review client entity structures to help ensure they remain optimal under current tax law. The enhanced SALT deduction may make certain structural changes advantageous. 

Succession Planning Integration: For business owners approaching retirement or considering succession planning, we coordinate SALT strategies with wealth transfer objectives. The temporary nature of the enhanced deduction creates time-sensitive opportunities for tax-efficient business transfers. 

Looking to optimize your business tax strategy under the new SALT deduction rules? Contact BPM to explore personalized solutions that maximize your current benefits while preparing for future tax law changes. 

Most businesses approach workforce planning reactively. They hire when teams are stretched too thin. They restructure after inefficiencies have already affected performance. They address skills gaps only after key employees leave or critical projects stall.  

Workforce optimization offers a different approach. Rather than reacting to workforce challenges as they arise, it creates a proactive framework that aligns your people, organizational structure, and capabilities with your business goals. For organizations navigating growth, change, or transformation, workforce optimization shifts the focus from managing headcount to building a resilient, strategically aligned workforce. 

What is workforce optimization? 

Workforce optimization (WFO) is a strategic approach to designing, deploying, and developing your workforce in alignment with business objectives.  

Unlike tactical workforce management—which focuses on scheduling, employee work associated with time tracking, and day-to-day operations—workforce optimization addresses the structural and strategic questions that determine long-term performance:  

• Do you have the right organizational structure?  
• Are people in roles that match their skills and your priorities?  
• Where are the gaps between current capabilities and future needs?  
• How do you prepare your workforce for what’s ahead? 

We define workforce optimization as the process of aligning talent with strategy through organizational design, workforce planning, skills analysis, and change management. It’s not about software platforms or productivity metrics. It’s about creating clarity, efficiency, and agility in how your organization is structured and how your people are positioned to be set up for success.  

How does workforce optimization work? 

Workforce optimization operates as an integrated system rather than a collection of separate initiatives. It brings together four core components that work in tandem to create a more effective, strategically aligned organization. 

Organizational design  

This creates the structural foundation and often means examining how teams are configured, where responsibilities sit, and whether your current structure supports or hinders business priorities.  

Organizations often carry outdated structures forward through growth or change, creating bottlenecks, unclear accountability, or duplicated effort. Effective organizational design clears these inefficiencies and builds a framework where roles, teams, and reporting lines work together strategically. 

Talent management 

Here, you can ensure you’re deploying people where they create the most value. Rather than filling open positions reactively, this involves analyzing where talent is concentrated, where it’s needed most, and how future business priorities will shift those requirements. The goal is strategic alignment—optimizing employee performance and matching your workforce capabilities to the work that drives results. 

McKinsey research shows that individuals who are top performers in highly critical roles deliver 800% more productivity than average performers in the same role. This finding underscores why strategic talent deployment matters.  

When the right people are in the right roles—and those roles are clearly defined and aligned with business strategy—organizations unlock disproportionate value from their existing workforce. Workforce optimization strategies focus on maximizing this productivity through better talent alignment and role clarity. 

Skills analysis 

These types of analyses identify the gap between what your organization can do today and what it needs to do tomorrow. As business demands evolve, so do skill requirements. This component involves mapping current capabilities, pinpointing development needs, and creating pathways—whether through training, reskilling, or strategic hiring—that close those gaps before they become performance barriers. 

This approach supports performance management by ensuring teams have the capabilities needed, and ability to adjust to meet changing performance goals as the organization evolves. 

Change management  

Change management recognizes that workforce optimization only works if people understand and support it. Structural changes, new role definitions, or shifts in how work gets done require thoughtful communication, leadership alignment, and strategies that help employees adapt. Without this element, even well-designed workforce plans stall during implementation. 

Learn more about our Workforce Optimization Services

Is there a difference between workforce management and workforce optimization? 

Yes. Workforce management handles day-to-day operations—scheduling, time tracking, attendance, and ensuring adequate coverage during peak periods. Workforce optimization addresses the broader strategic questions that determine long-term performance and organizational effectiveness. 

Workforce management provides the operational backbone. It answers questions like:  

• Are workloads distributed fairly? 
• Do we have enough people scheduled for this shift? 

• How is our employee attendance this quarter? 
• What are our upcoming staffing plans for the holidays? 

Workforce optimization is the next evolution. It focuses on agility, strategic insight, and long-term capability rather than just efficiency metrics. Organizations using workforce optimization ask different questions:  

• Is our structure aligned with business priorities?  
• Where are the skills gaps that will affect future performance?  
• How do we prepare our workforce for what’s ahead?  
• How can we improve employee efficiency while maintaining engagement and quality? 
• Are roles clearly defined and positioned for accountability? 

According to SHRM research, organizations that proactively forecast workforce trends are more likely to excel at driving change compared to those that don’t—61% versus 45%. This translates into better operational efficiency and reduced costs.  

The distinction matters because businesses operating reactively—filling positions as they open, addressing skills gaps only after they create bottlenecks—are constantly behind. Proactive workforce optimization builds the structural foundation that allows organizations to adapt, scale, and perform without scrambling. 

Why businesses benefit from proactive workforce planning 

The business case for workforce optimization shows up in measurable ways across financial performance, talent retention, and organizational agility. 

Stronger financial performance 

Strategic workforce planning helps prevent costly mistakes like overstaffing by allowing organizations to prioritize hiring efforts and focus on essential roles versus reactive, last-minute hiring.  

By forecasting workforce needs accurately and aligning headcount with business priorities, organizations avoid the financial drain of overstaffing during slower periods and the revenue loss associated with being understaffed during critical growth phases. This level of precision in workforce deployment directly affects the bottom line—reducing unnecessary labor costs while ensuring adequate capacity to capture revenue opportunities. 

Improved retention 

Strategic workforce planning also improves retention. Employees who see clear development pathways, understand how their roles contribute to business goals, and work within well-designed structures are more likely to stay. This reduces costly turnover and preserves institutional knowledge. When workforce structures support career growth and role clarity, retention becomes a natural outcome rather than a constant challenge. 

Enhanced agility 

The advantages extend beyond talent alignment. Organizations with optimized workforce structures demonstrate stronger agility during market shifts. They can reassign resources quickly, adapt to changing business priorities, and build succession pipelines that ensure leadership continuity.  

Stronger operational efficiency 

Well-designed workforce structures eliminate the inefficiencies that drain organizational resources. When roles are clearly defined, reporting relationships are logical, and responsibilities don’t overlap unnecessarily, work flows more smoothly.  

Teams spend less time navigating organizational confusion and more time executing on priorities. Redundancies are minimized, accountability is clear, and decision-making accelerates.  

These efficiency gains compound over time, creating organizations that can accomplish more with existing resources rather than constantly adding headcount to compensate for structural problems. 

Better strategic execution 

Workforce optimization aligns your talent infrastructure with strategic priorities, making it easier to execute on what matters most. When your organizational structure supports rather than hinders your business strategy, initiatives move faster, cross-functional collaboration improves, and strategic goals become achievable rather than aspirational.  

Organizations with optimized workforces don’t just plan better—they execute better, because the structural foundation exists to turn strategy into results. This workforce optimization solution creates a competitive advantage by enabling data-driven decision-making at every level of the organization. 

The role of technology in workforce optimization 

While workforce optimization is fundamentally a strategic framework rather than a technology solution, workforce optimization software can support and accelerate the process when used appropriately. The right tools provide organizations with real-time data and actionable insights that inform better workforce decisions. 

Effective WFO software helps organizations track key performance indicators across talent deployment, skills coverage, and organizational efficiency. These platforms can surface patterns that might otherwise go unnoticed—such as emerging skills gaps, inefficient resource allocation, or structural bottlenecks that slow execution. By aggregating data from multiple sources, workforce optimization technology creates visibility into how well your current structure supports business priorities. 

Additionally, workforce optimization technology can help organizations meet compliance requirements by tracking certifications, training completion, labor regulations, and other workforce-related mandates. This becomes particularly valuable for organizations operating across multiple jurisdictions or industries with strict regulatory oversight. 

Move from reactive management to strategic workforce optimization 

Organizations that embrace workforce optimization move beyond the cycle of reactive hiring, emergency restructuring, and constant firefighting. They build structures that support agility, create role clarity, and ensure talent is deployed where it creates the most value. 

Whether your organization is navigating change, scaling operations, preparing for evolving work models, or addressing talent gaps, workforce optimization provides the strategic foundation to move forward with confidence.  

Looking to build a more strategic, resilient workforce? Contact BPM’s workforce optimization consultants to explore how we can help align your organizational structure with your business goals. 

If you’re considering retiring at 55, you’ve landed on what many consider the “sweet spot” of early retirement planning. You’re pursuing something ambitious, but you’re also in a much more favorable position than those trying to retire at 40 or even 50. 

At 55, you have some distinct advantages working in your favor. You only have about seven years before you become eligible for Social Security benefits. You’ve had access to catch-up contributions for five years. Perhaps most importantly, savings in qualified retirement plans may be available to you penalty-free access through something called the Rule of 55. 

The challenge lies in building sufficient wealth while managing the ongoing financial commitments that often come with this life stage—maybe you’re still supporting children through college, caring for aging parents, or dealing with your own evolving healthcare needs. 

So, how much do you need to retire comfortably at 55? Let’s find out.  

How much do you need in your portfolio to retire at 55? 

If you’re aiming to retire at 55, you’ll likely need a sizeable nest egg to cover your living expenses (though it’s often much smaller than if you were retiring 10-15 years earlier). 

To get a baseline figure, start by estimating your annual expenses and use a ballpark withdrawal rate. Keep in mind that your nest egg will likely need to last 30+ years. To be more conservative, we created a chart that used a 3.5% annual withdrawal rate.  

Annual Expenses	Portfolio Needed (No Bridge Income)	Portfolio with $100K Bridge Income
$80,000	$2.0 million	$700,000
$120,000	$3.0 million	$1.5 million
$160,000	$4.0 million	$2.5 million
$200,000	$5.0 million	$3.5 million

When we talk about bridge income, we’re referring to additional assets outside of your retirement nest egg, such as part-time work, real estate, or other alternative sources of income.  

By supplementing your retirement savings with additional income, you reduce your reliance on your portfolio alone to cover your expenses, meaning your nest egg may be able to be smaller.  

In the above table, you can see that generating $100,000 annually through part-time work, consulting, or investment income can reduce your needed portfolio by a couple of million dollars. 

Another way to reach your target number is to use the salary multiple rule, which suggests having six to eight times your annual salary saved by the time you reach age 55. If you’re earning $150,000, this would mean targeting $900,000-1.2 million.  

While this guideline tends to be more accurate for conventional retirement in your 60s, it often falls short for retiring at 55 without substantial bridge income or significant lifestyle adjustments. 

Creative ways to work toward your retirement number 

Your retirement spending needs at 55 likely extend well beyond basic living expenses. At this life stage, you’re probably juggling some complex financial obligations that will persist into retirement. 

Understand your lifestyle requirements 

How you want to spend your time—and your money—plays a big role in determining how much you’ll need to retire comfortably at 55. At this life stage, your financial picture is probably more complex than it was in your 30s or 40s, with various commitments that will shape your retirement planning. 

Housing decisions 

As every homeowner knows, owning property is expensive, and those costs don’t disappear just because you retire. Property taxes, insurance, and maintenance are ongoing realities whether you’ve paid off your mortgage or not. 

If you’re like many people at 55, you might own multiple properties or be wrestling with some big decisions about your living situation. Should you downsize to reduce expenses? Stay put and age in place? Maybe you’re dreaming of that retirement home in a different climate or lower-cost area. 

When it comes to debt, the decision isn’t always black and white. Yes, carrying mortgage or credit card debt into retirement will increase how much you need in your portfolio. But if you have a low-rate mortgage and your investments are performing well, paying it off early might not be the smartest financial move. It really depends on your specific situation and comfort level with debt. 

Healthcare considerations 

Here’s something you’ll want to think seriously about: your health and healthcare costs. At 55, you probably have a clearer picture of any ongoing health issues or family medical history that might influence your expenses down the road. 

If you’re managing chronic conditions or know that certain health issues run in your family, these considerations should factor into your healthcare budget planning. It’s not the most exciting part of retirement planning, but it’s one of the most important. 

Family financial commitments 

Family obligations often don’t stop when you hit your 50s. You might still be helping kids through college, supporting graduate school dreams, or even assisting with grandchildren’s education expenses. 

Many people also find themselves supporting aging parents with healthcare costs or long-term care needs while still managing their own family’s financial goals. 

Your insurance needs are probably shifting, too. As your children become financially independent, you might need less life insurance. On the flip side, long-term care insurance becomes something worth considering more seriously at this stage. 

Maximize your savings strategies 

Retiring at 55 means you need to be strategic about every savings opportunity available to you, especially the ones that offer unique benefits for your age group. The good news? You have some powerful tools at your disposal. 

Foundation strategies 

Let’s start with the basics. Maxing out your retirement accounts should still be your priority. Here are the 2025 contribution limits: 

• 401(k) contributions: $23,500 plus $7,500 catch-up 
• IRA contributions: $7,000 plus $1,000 catch-up 
• HSA maximization: $4,300 individual or $8,550 family coverage, plus $1,000 catch-up contribution  

Those catch-up contributions are a real game-changer for 55-year-old retirees. That additional $8,500 in annual tax-advantaged savings can meaningfully accelerate your timeline, especially when you consider you’ve had five years to take advantage of these higher limits. Every dollar you’ve been able to save above the standard limits has been working for you. 

Rule of 55 advantage 

Here’s where retiring at 55 offers a unique advantage that younger retirees simply don’t have: the Rule of 55 allows penalty-free 401(k) withdrawals from your current employer if you retire at 55 or later. This eliminates that costly 10% early withdrawal penalty that affects younger retirees, giving you access to your retirement income sooner.  

There’s an important caveat, though—this rule only applies to your current employer’s plan, not previous employers’ 401(k)s or IRAs. If you’re seriously considering retirement, planning your departure timing around this rule could save you substantial penalty costs during your early retirement years. 

Deferred compensation timing 

If you’re a high earner, you might have deferred compensation that becomes accessible around retirement age. These plans often provide guaranteed returns while shifting income to potentially lower tax brackets in retirement, which can work in your favor. 

You’ll want to review your payout options carefully. Lump sum distributions might push you into higher tax brackets, while annuity payments provide steady income but less flexibility. It’s worth taking the time to understand your options. 

Pension considerations 

If you’re fortunate enough to have a traditional pension, it can significantly impact your retirement calculations. Some pensions offer early retirement options with reduced benefits, while others require waiting until full retirement age. 

Here’s something worth doing: calculate your pension’s present value to understand its impact on your required portfolio size. A pension providing $30,000 annually could reduce what you need from your investment portfolio by approximately $750,000-850,000 using conservative withdrawal rates. That’s a substantial difference that could change your retirement timeline. 

Annuity evaluation 

Fixed annuities can provide guaranteed income to bridge the gap until Social Security eligibility. However, current interest rate environments and inflation protection features deserve careful evaluation. 

Annuities often make the most sense for retirees who prioritize guaranteed income over portfolio flexibility. Think of them as part of a diversified approach rather than your primary retirement strategy—they’re one tool in your toolkit, not the whole solution. 

Bridge the gap to traditional retirement benefits 

When you retire at 55, you’re creating a seven-year gap before you can access Social Security and a 10-year wait for Medicare. It sounds like a long time, but it’s much more manageable than the gaps faced by people retiring in their 40s.  

Your bridge strategy needs to address both income and healthcare needs during this transition period. 

Social Security timing considerations 

Here’s where things get interesting from a planning perspective. You can start claiming Social Security as early as 62, but there’s a trade-off—your benefits will be permanently reduced by about 25-30% compared to waiting until your full retirement age. 

This decision becomes one of those complex financial puzzles where you’re weighing immediate cash flow needs against lifetime benefit optimization. If you’ve built substantial portfolios, you might choose to delay Social Security to maximize those benefits.  

On the other hand, if preserving your portfolio assets is a priority, claiming early might make sense even with the reduced benefits. 

Healthcare coverage planning 

Let’s talk about healthcare—it’s likely going to be one of your largest retirement expenses during that 10-year gap before Medicare kicks in.  

If you’re eligible, you can extend your current employer healthcare coverage via COBRA for up to 18 months, but you’ll be fronting the entire bill, which could be costly. You can also look into private insurance via the ACA marketplace. While you search for plans, bear in mind any specialists, medications, and in-network providers so you can find a plan that works for your health needs.  

Something that catches many people off guard is that premium costs can vary dramatically depending on where you live and your income level. If you’re an early retiree with substantial portfolios, you may not qualify for premium subsidies, which means healthcare coverage could become quite a big monthly expense. 

Income strategies 

The good news is you have several options for generating income during these bridge years, and you can mix and match based on what works best for your situation. 

• Taxable investment accounts become really valuable here because they provide penalty-free income access and offer flexibility in managing your tax liability year by year. You’re not locked into any specific withdrawal schedule and realized gains are taxed at capital gains rates as long as you hold the asset for at least one year.  
• Real estate investments can be particularly appealing at this stage. Whether it’s rental properties generating ongoing income or REITs that give you similar exposure without the headaches of direct property management, real estate can provide both cash flow and tax advantages through depreciation deductions. 
• Roth conversion opportunities become especially valuable during these “lower-income” early retirement years. Since you’re likely earning less than during your peak working years, converting traditional retirement account assets to Roth accounts can optimize your lifetime tax situation. Bear in mind that conversions in your early 60s can impact the cost of Medicare, so ensure your team reviews the pros and cons with you.  
• Part-time work or consulting often provides both income and a sense of purpose that many retirees find they miss. Your established professional network opens doors to flexible arrangements that simply weren’t available earlier in your career—maybe that’s consulting in your field, teaching, or pursuing something you’ve always been passionate about. 

As you’re in this time of lower tax years, it’s also a great opportunity to start planning for larger distributions and events in retirement like RMDs, Medicare, and Social Security.  

Create your customized retirement plan 

Retiring at 55 is an exciting prospect.  

And the truth is, there are a lot of moving pieces to coordinate—planning for Social Security claiming strategies, navigating healthcare coverage gaps, and managing multiple income sources.  

It can feel overwhelming to juggle all these decisions on your own, which is why many people find it helpful to work with professionals who understand not just the technical requirements but also the personal side of what makes retirement fulfilling. 

Everyone’s version of retirement looks different, and your plan should reflect what matters most to you. 

If you’re ready to explore what retirement at 55 could look like for your specific situation, contact BPM’s wealth management team to develop strategies tailored to your timeline, goals, and the retirement lifestyle you’re envisioning. 

This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual. This information is not intended for use as tax advice. 

The examples given are hypothetical and are for illustrative purposes only. Actual results may vary from those illustrated. Guarantees are based on the claims-paying ability of the issuing company.  

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. each an SEC Registered Investment Advisor | BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc.  

Your prospects are asking about your security practices. You know you need compliance, but which framework should you pursue first? 

SOC 2 and ISO 27001 are two of the most recognized security frameworks in the world. Both demonstrate your commitment to protecting customer data. Both require significant investment. And both can open doors to new business opportunities. 

But they’re not identical, and choosing the wrong one could mean missing out on key prospects or wasting valuable resources. This article breaks down the core differences of SOC 2 vs ISO 27001, helps you understand which standard aligns with your business goals, and shows you how to make the right choice for your organization. 

What Is SOC 2? 

SOC 2 is a security framework developed by the American Institute of Certified Public Accountants (AICPA). It focuses on how you protect customer data from unauthorized access, security incidents, and vulnerabilities.  

When you complete a SOC 2 audit, you receive a report that demonstrates your controls are working effectively over a defined period of time. This report shows prospects and customers that you take data security seriously all the time, not just when you are being audited. 

SOC 2 is the standard framework for service organizations in North America. If you’re selling to US-based companies, they’ll likely request your SOC 2 report during their vendor evaluation process. 

“SOC 2 provides assurance that your data protection isn’t just policy, it’s practice. That credibility is what gives it it’s strength in the North American market.” – Lauren Bradner – Director, IT Security Compliance Operations 

What Is ISO 27001?  

ISO 27001 is an international standard created by the International Organization for Standardization. It outlines requirements for building and maintaining an Information Security Management System (ISMS). 

Unlike SOC 2, ISO 27001 results in a formal certification. This certificate proves you’ve established a comprehensive system for managing information security risks. 

ISO 27001 carries strong recognition worldwide, particularly in Europe and Asia. International prospects often require this certification before they’ll consider doing business with you. 

“ISO 27001 represents global trust. One certification speaks to regulators and clients worldwide, and reflects a mature, risk-based approach to protecting data.” – Lauren Bradner 

How SOC 2 and ISO 27001 are Similar 

These frameworks share more similarities than differences. Both require independent third-party audits. Both focus on core security principles like confidentiality, integrity, and availability. Both demand substantial time and financial investment. 

The AICPA’s mapping analysis shows approximately 80% overlap between the two frameworks. They share nearly all the same controls, with only about 4% variation. This overlap means the work you do for one framework often applies to the other. 

Both frameworks also require you to document your security practices, train your team, and continuously monitor your controls. You’ll need to demonstrate strong risk management and maintain detailed evidence of your security efforts. 

SOC 2 vs ISO 27001: Key Differences 

Geographic Recognition 

Your target market should drive your decision. SOC 2 dominates in North America, where it’s become the expected standard for service providers. ISO 27001 holds more weight internationally. 

That said, many US companies accept ISO 27001, and international organizations may accept SOC 2. The deciding factor is what your specific customers require. 

Framework Flexibility 

SOC 2 gives you more flexibility. You choose which of the five Trust Services Criteria to include in your audit. Only Security is mandatory. You can add Availability, Confidentiality, Privacy, and Processing Integrity based on what your services require. 

ISO 27001 takes a more prescriptive approach. It requires 93 specific controls known as Annex A controls. If you exclude any controls, you must document and be able to justify why they don’t apply to your organization. 

Scope and Documentation 

SOC 2 audits typically have a narrower scope. You’ll need a management assertion, system description, and control matrix. Additional documentation depends on which Trust Services Criteria you select. 

ISO 27001 requires more comprehensive documentation. You’ll create an information security policy, risk assessment, risk treatment plan, formal internal audit process, and Statement of Applicability. You also need a plan for continuous improvement of your ISMS. 

Report Type 

ISO 27001 provides a certificate that confirms your compliance. It’s a binary result:you’re either certified or you’re not. 

SOC 2 produces an attestation report that details the auditor’s opinion on your controls. This report provides more granular information about which aspects of your security program passed evaluation. 

Renewal Requirements 

Both assessment types require annual third-party audits. SOC 2 Type II reports need full annual renewal to stay current. ISO 27001 certificates last three years, but still require annual surveillance audits (50% control testing) to verify ongoing compliance. After three years, you’ll complete a full recertification audit. 

Learn more about our ISO Certification Preparation Services

Which Security Framework Should You Choose? 

Start by asking yourself these questions: 

• Where are your customers located? US companies typically require SOC 2, while international clients expect ISO 27001. 
• What are your customers explicitly requesting? Listen to what prospects ask for during their due diligence process. 
• What’s standard in your industry? SaaS companies often need SOC 2, while global enterprises expect ISO 27001. 
• Where do you plan to expand? If you’re targeting international markets, ISO 27001 may be more valuable long-term. 
• How mature is your security program? SOC 2 can be a good starting point, while ISO 27001 typically requires more operational maturity. 
• Do you prefer flexibility or structure? SOC 2 adapts to your specific services, while ISO 27001 provides detailed requirements. 

Many organizations eventually pursue both frameworks. The overlap between them means your work on one framework accelerates progress on the other. Having both certifications demonstrates a robust security program and builds trust with customers worldwide. 

Get Compliant with BPM  

Choosing between SOC 2 and ISO 27001 depends on your customers, your market, and your business goals. But you don’t have to make this journey alone. 

BPM guides organizations through both SOC 2 and ISO 27001 compliance processes. We help you understand which framework fits your business, prepare for your audit, and maintain compliance over time. Our team works alongside yours to build security programs that not only meet compliance requirements but also strengthen your overall security posture. To discuss which framework is right for your business, contact us. 

The conversation around San Francisco commercial real estate has shifted. After years of headlines focused on vacancy rates and remote work challenges, something fundamental is changing in the Bay Area market—and the implications for property owners, investors, and developers are significant. 

At our recent 2025 Year-End Real Estate Forum – led by BPM’s Real Estate Leader, Mark Leverette – we gathered some of the most influential voices shaping San Francisco’s real estate landscape: brokers navigating deal flow, attorneys structuring transactions, developers planning new projects, and financial leaders managing complex portfolios. The consensus was clear – San Francisco is experiencing a tangible resurgence, driven by economic stabilization, political leadership, and the transformative impact of artificial intelligence on the region’s commercial landscape. 

If you’re making decisions about Bay Area real estate investments, lease commitments, or portfolio strategy, understanding these dynamics is essential to positioning your assets for the opportunities ahead. 

The K-Shaped Recovery and What It Means for Commercial Property 

Chief Economist Paul Single from City National Bank opened the forum with an unflinching look at the current economic environment. His central theme? We’re in the midst of a K-shaped recovery—where different sectors and asset classes are experiencing dramatically different trajectories. 

For commercial real estate, this creates both challenges and opportunities: 

• Top performers: Properties tied to growth sectors like technology and AI are seeing renewed demand and stabilizing valuations 
• Lagging assets: Traditional office spaces not aligned with modern workplace needs continue facing pressure 
• The divide matters: Your property’s position in this recovery depends heavily on tenant mix, location, and adaptability to new market demands 

This divergence means blanket strategies no longer work. Your approach to one property in your portfolio may need to differ significantly from another, even within the same market.  Adding that rock climbing wall, or upgrading the roof to a garden retreat, may be just the answer in some cases.  

Federal Reserve Policy: One Vote Isn’t Everything 

Single offered a particularly valuable reminder for anyone making long-term real estate investment decisions: “Eyes on the Fed Chair… but remember, they’re only one vote.” 

While Federal Reserve policy on inflation and interest rates remains influential, the commercial real estate market is increasingly driven by local fundamentals—employment trends, sector growth, and regional competitive advantages. For San Francisco specifically, these local drivers are proving more powerful than national monetary policy in shaping market direction. 

The takeaway? Don’t let macro uncertainty paralyze your local market strategy. The Bay Area has unique catalysts driving demand that transcend broader economic headwinds. 

Forces Behind San Francisco’s Commercial Real Estate Momentum 

Leadership Stability Creates Investment Confidence 

Political stability matters to commercial real estate markets. The election of Mayor Daniel Lurie has brought renewed focus and consistent leadership to San Francisco’s economic development agenda. For property owners and investors, this translates to: 

• More predictable regulatory environments for development and repositioning projects 
• Coordinated efforts to address street-level conditions that impact property values 
• Strategic initiatives supporting business retention and attraction 

When investors feel confident about a city’s direction, capital follows. We’re seeing this play out in deal flow, tenant expansion discussions, and developer interest in projects that were shelved during more uncertain times. 

The AI Sector: San Francisco’s Commercial Real Estate Catalyst 

Perhaps no single factor is reshaping the Bay Area commercial real estate landscape more dramatically than artificial intelligence. The region’s position as the global epicenter of AI development is creating ripple effects across property markets: 

Office demand is evolving: AI companies need different spaces than traditional tech tenants—more collaborative environments, specialized infrastructure for computing needs, and proximity to the innovation ecosystem 

Competition for prime locations: As AI firms expand rapidly, they’re driving renewed interest in Class A office space in key corridors, particularly in South of Market and parts of downtown San Francisco 

Supporting ecosystem growth: The AI boom is attracting talent, which drives residential demand, which supports retail and hospitality—creating a virtuous cycle for mixed-use developments 

If your portfolio includes Bay Area commercial properties, understanding how AI growth affects your specific assets should be part of your strategic planning conversations. 

The Office Market’s Tangible Resurgence 

The forum participants—people actively working deals and tracking leasing activity—reported something that doesn’t always show up in quarterly statistics: genuine momentum in San Francisco’s office market. 

This doesn’t mean the market has returned to 2019 dynamics. Rather, we’re seeing: 

• Tenant tours increasing for well-positioned, amenitized properties 
• Companies making decisions they’d been delaying, particularly those in growth sectors 
• A flight to quality, where premium spaces are outperforming significantly 
• Renewed interest in flexible lease structures that give tenants growth options 

For property owners, this creates a clear strategic imperative: Assets need to be positioned for the market that’s emerging, not the one we left behind. 

Strategic Considerations for Your Commercial Real Estate Portfolio 

What Market Optimism Means for Your Investment Decisions 

The San Francisco market’s recovery isn’t uniform, and your strategy shouldn’t be either. Consider these actionable perspectives: 

• If you’re an office landlord: The properties attracting interest share common characteristics—modern systems, amenity-rich environments, strong building management, and locations connected to where talent wants to be. Investing in repositioning or amenity upgrades may unlock significantly more value than waiting for market conditions to improve on their own. 
• If you’re evaluating acquisitions: The K-shaped recovery creates opportunities to acquire assets that can be repositioned for growth sectors. Properties that seem challenged in traditional office uses might be perfectly suited for AI companies, life sciences tenants, or mixed-use conversion. 
• If you’re planning development: The combination of political stability, sector growth, and returning market confidence creates a more favorable environment for breaking ground on projects—but success will depend on reading the specific tenant demand signals correctly. 
• If you’re managing a portfolio: Tax strategy becomes even more important in a recovering market. Understanding how to structure asset sales, leverage 1031 exchanges, or optimize holding structures can significantly impact your after-tax returns as property values stabilize and potentially appreciate. 

The Community Factor: Why Energy and Collaboration Matter 

One of the most interesting observations from our forum wasn’t about cap rates or leasing velocity—it was about something less quantifiable but equally important: energy. 

Multiple participants noted that collaboration and optimism are returning to the San Francisco real estate community. Brokers are more active. Developers are having productive conversations with lenders. Property owners are engaging in strategic planning rather than crisis management. 

This matters because commercial real estate is ultimately a relationship-driven business. When the ecosystem is functioning well—when information flows freely, when partnerships form naturally, when there’s collective belief in the market’s direction—deals happen, challenges get solved, and opportunities get realized. 

Positioning for What’s Next 

San Francisco’s commercial real estate market is evolving into something different from what came before. The forces driving this transformation (AI sector growth, political stability, and renewed economic fundamentals) are creating opportunities for property owners and investors. 

As we move through 2025, the Bay Area commercial real estate market will continue to reward those who position their assets thoughtfully, understand sector-specific demand drivers, and structure their holdings for both tax efficiency and operational excellence. 

Ready to discuss how these San Francisco market trends affect your commercial real estate strategy? BPM’s real estate advisory team works with property owners, investors, and developers to navigate complex market transitions, optimize portfolio performance, and structure transactions that align with your long-term objectives. Contact us to start a conversation about your Bay Area commercial real estate holdings. 

Stepping away from your career and retiring at 50 is an exciting goal.  

At 50, you’re in a particularly interesting position, personally, professionally, and financially. You’ve likely accumulated substantial career experience and earning power, plus you now have access to catch-up contributions that weren’t available in your 40s.  

While the average retirement age in America is 62, retiring 12 years earlier is possible with the right approach. 

The question isn’t whether early retirement is possible—it’s how you can build sufficient wealth to maintain the lifestyle you want while navigating the years before traditional retirement benefits kick in. 

How much do you need in your portfolio to retire at 50?  

When you’re planning to retire at 50, you’ll want to analyze all your goals and spending habits holistically to give yourself a better sense of what you’ll need to maintain your lifestyle. 

In terms of your portfolio needs, most people find it helpful to plan with more conservative withdrawal rates (less than 4%) since your portfolio potentially needs to last decades longer than traditional retirement planning assumes. This longer timeline may work in your favor in some ways, but it does require a different approach to the numbers. 

As you start to look at the numbers, you’ll get a better sense of what this could look like for you.  

The following table assumes a 3.5% annual withdrawal rate for a 40+ year retirement: 

Annual Expenses	Portfolio Needed (No Bridge Income)	Portfolio with $100K Bridge Income
$100,000	$2.5 million	$1.0 million
$150,000	$3.8 million	$2.5 million
$200,000	$5.0 million	$3.8 million
$300,000	$7.5 million	$6.3 million

As you can see, bridge income—supplementary income that comes from outside your investment portfolio—can make a significant difference in your requirements.  

For example, if you bring in $100,000 annually through part-time consulting, rental properties, or other sources, you can reduce the size of your portfolio by a couple of million dollars compared to complete financial independence. That’s a substantial reduction that can make early retirement much more achievable. 

Alternative ways to find your ideal retirement number 

There’s not one right way to find your magic retirement number—it’s completely custom to your lifestyle and circumstances.  

If reverse engineering through a planned withdrawal rate feels too ambiguous, you could also consider the income replacement approach. This “rule” suggests maintaining 80-90% of your pre-retirement income. If you’re currently earning $200,000 annually, you might need $160,000-180,000 in retirement income, which would require roughly $4.5-5.1 million using conservative withdrawal rates. 

You may have also heard of the salary multiple method, which recommends saving six times your annual salary by age 50. While this traditional guideline works for conventional retirement, it often falls short for early retirement scenarios. Carrying this rule out, someone earning $150,000 would target $900,000 by 50—which might be insufficient for early retirement without substantial bridge income or lifestyle adjustments. 

Here’s something encouraging: retiring at 50 versus 40 can offer some distinct advantages. Those ten additional earning years provide more time for portfolio growth and contributions. These factors can reduce the aggressive savings rates required for earlier retirement ages. 

Tips to help you reach your retirement number 

Retiring at 50 requires intentional spending and systematic wealth building, but it doesn’t mean you have to change your lifestyle. It’s about being strategic with where your money goes and optimizing your financial plan. 

Here are some ways to start doing that.  

Take an honest look at your spending patterns (and future spending needs) 

Do you really know how much money you spend every month?  

Even the most finance-savvy people can gloss over regular spending habits, but when prepping for an early retirement, pulling out the microscope will be worthwhile.  

One way to get a true sense of your spending is to track your expenses for a few months. This way, you have the data to identify spending patterns and potential optimization opportunities.  

For example, many high earners discover that subscriptions or impulse purchases consume thousands annually without adding much to their quality of life. 

Pay particular attention to fixed expenses that will likely persist in retirement. Housing costs, insurance premiums, and recurring services often represent your largest controllable expenses.  

Debt obligations also deserve special attention—carrying mortgage or credit card debt into retirement can substantially increase your required portfolio size. 

It’s worth considering how retirement might change your spending patterns. Healthcare costs typically increase as employer-sponsored insurance ends. Housing expenses might decrease if you downsize or relocate. Transportation costs often drop significantly without daily commuting. These changes can work in your favor if you plan for them thoughtfully. 

Maximize your tax-advantaged accounts 

Every dollar you invest now will go toward your future. But it’s not just about investing; it’s ensuring you’re investing in tax-efficient accounts that will help you reach your goals.  

A good place to start is your foundation contributions to your retirement accounts: 

• 401(k): $23,500 in 2025, plus $7,500 catch-up if you’re 50+ 
• IRA: $7,000 plus $1,000 catch-up contribution 
• HSA: $4,300 individual or $8,550 family coverage with an extra $1,000 in catch-up contributions.  

Those catch-up contributions provide a crucial advantage for 50-year-old early retirees. The additional $7,500 in 401(k) contributions and $1,000 in IRA contributions can meaningfully accelerate your timeline—that’s an extra $8,500 annually in tax-advantaged savings. 

Advanced strategies might include mega backdoor Roth conversions if your employer plan allows after-tax contributions. Roth conversion ladders can also provide tax-free income during early retirement years before Social Security eligibility. 

Optimize your investment approach 

As we discussed earlier, it’s not enough to just invest; you need to have a strategy tied to those investments.  

Asset allocation becomes particularly important as you approach retirement age. You need growth to build wealth, but you also need some stability to weather market downturns during your early retirement years. Many people consider what’s called a declining equity glide path: higher stock allocations during your wealth-building phase, gradually shifting toward more conservative investments as retirement approaches. 

Tax efficiency becomes increasingly important as your portfolio grows (known as asset location). This involves placing tax-inefficient investments in retirement accounts while keeping tax-efficient index funds and municipal bonds in taxable accounts (like brokerage accounts). It’s all about balancing (and optimizing for) the different tax treatments of your investments, i.e., which are subject to ordinary income tax versus capital gains tax.  

Many early retirees also add real estate to their portfolio as it can provide strong cash flow and tax advantages, with an added bonus of additional portfolio diversification. If you own a rental property, for example, you can generate ongoing income while offering depreciation deductions. If direct property ownership doesn’t appeal to you, Real Estate Investment Trusts (REITs) provide similar exposure without property management responsibilities. 

Think strategically about debt elimination 

Debt isn’t always a bad thing. In fact, leveraging debt strategically can help you reach certain objectives.  

But carrying the wrong debt with you into retirement can take away from other financial avenues you may want to pursue.  

It all depends on the type of debt you have, interest rates, other income sources, and overall spending habits—all of which are extremely personal.  

A great example of this is paying off a mortgage before you retire at 50.  

On the one hand, entering retirement without a housing payment provides valuable cash flow flexibility and can reduce your required portfolio withdrawals.  

However, paying off low-rate mortgages might not optimize your overall wealth if investment returns exceed your borrowing costs. This is one of those decisions where your personal comfort level with debt plays a significant role. 

Consider geographic arbitrage opportunities 

One benefit of retirement is that you likely aren’t bound to one location due to your career. This makes relocation, especially relocation to lower cost-of-living areas, more feasible.  

The difference between retiring in San Francisco versus Austin, or Manhattan versus Nashville, can represent hundreds of thousands in required savings. Geographic arbitrage isn’t just about lower costs and potential tax savings—it’s about accessing different lifestyle opportunities during your retirement years. Maybe you want to live near the beach, in the mountains, or in a vibrant smaller city with great cultural amenities. 

In general, moving from high-cost areas to regions with lower living expenses can reduce your required portfolio size. You’ll, of course, want to factor in family, friends, healthcare, and lifestyle routine considerations into any move.  

Plan for your health 

If you want to retire early at 50, that leaves 12 years before you’d be eligible for Social Security and an even longer 15-year wait for Medicare.  

It’s important to create an income plan that accounts for these gaps, notably in your health. 

One option is COBRA. This law lets you continue with your existing healthcare coverage for up to 18 months after a “qualifying event,” which in this case would be retirement. While your coverage will be seamless, COBRA typically costs quite a bit more than employee premiums. 

After COBRA expires, the private insurance via the ACA marketplace plans become your primary option for securing healthcare. When you get to this point, shop around as premium costs can take big swings depending on your location and income level. Plus, early retirees with substantial portfolios may not qualify for premium subsidies, making healthcare a large retirement expense to prepare for. 

This is where Health Savings Accounts (HSAs) become really valuable. The triple tax advantages—deductible contributions, tax-free growth, and tax-free qualified withdrawals—make HSAs powerful retirement funding vehicles that can extend well beyond their healthcare purpose. 

Create your personalized retirement plan 

How much money you need to retire at 50 depends on your lifestyle, spending goals, debts, health, and investment philosophy.  

There’s no one formula that will tell you when you’ve reached your magic retirement number—building a retirement income plan is all about creating a customized approach that aligns with your values and the retirement lifestyle you actually want. 

If you’re ready to explore what retiring at 50 could look like for your specific circumstances, contact BPM’s wealth management team to develop comprehensive strategies tailored to your income, spending patterns, and retirement lifestyle goals. 

This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual. This information is not intended for use as tax advice. 
The examples given are hypothetical and are for illustrative purposes only. Actual results may vary from those illustrated.  

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. each an SEC Registered Investment Advisor | BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc.