How often does life go exactly as you’ve planned? Even the most forward-focused person knows that life doesn’t always stay in its own lane. The unexpected happens. If you’re lucky, these surprises are positive, but more likely it’s a mixed bag.
Retirement is no different. A 2018 Gallup poll found that 43 percent of retirees retired earlier than planned. (IBJ) Workers between the ages of 50 and 64 expected to retire at age 67. Those surveyed who retired early exited the workforce an average of six years sooner than planned.
And unexpected retirement could derail your future savings plans and force you to tap into your retirement accounts sooner than you intended.
There are lots of reasons why someone might retire early but the most common reason is health. Layoffs are the second most frequently reported reason. These are two things you cannot control.
So what should you do to prepare for an early and completely unexpected retirement?
In our experience, too many people wait until retirement is looming before they begin planning. The trouble with this approach is in an unexpected retirement you may not have your plan in place. Starting sooner rather than later is always better.
If there are known health or other issues that might force an unexpected retirement, a financial planner will look at might happen. For instance, if you retire before 65, Medicare isn’t an option and you would likely need to find a private health insurance.
Unexpected retirement at an earlier date might stretch the length of time your nest egg needs to last. This could impact your budget and future spending. Taking Social Security at 62 can add to your income, but your benefits are reduced by as much as 30 percent.
Even if you don’t specifically plan for an unexpected retirement, having a financial plan in place makes adjustment easier. You aren’t starting from scratch. Your financial planner already knows where you are and where you want to be in retirement. Then, instead of trying to determine what your financial picture looks like, and where you want to be, your planner just needs to determine if there is a gap and the best way to bridge it.
An unexpected retirement is only one of the many obstacles possible in the future. The uncertainty of tomorrow can create anxiety. But you don’t need to live in fear of what might be.
Life doesn’t always go as you planned or hoped, and retirement doesn’t always look the way we imagined. A thorough financial plan can help you find a sense of security and allow you to roll with the changes that may occur with less stress.
If you’re ready to get a financial plan in place for your best possible future, book your free call with Bradford today.