When do you plan to retire? Age 66? 70? Never?
Think again.
The U.S. News & World Report1 states that 48% of workers retired at a younger age than they had planned. And unfortunately, many of these retirees are not choosing to retire. Rather, their plans are cut short by the reality of unexpected retirement.
Reasons for early retirement can range, including being laid off from a job and being unable to find new work. And sometimes, health concerns of the individual force an unplanned early exit from the workforce.
So, what can you do to mitigate the impact of an unplanned or forced early retirement?
- Contribute as much as you can while you can. When it comes to your retirement plan, nothing is more important than committing to consistent, and appropriately increasing, contributions. Not only is it one of the best ways to prepare for a comfortable retirement, it can also be a great help to you should you run into an unexpected setback.
- Be prepared to adjust your retirement plans. If you end up in retirement at age 55, it doesn't mean you start drawing from the account you weren't planning to touch until you were 65. In fact, doing so can have extreme consequences. Instead, consider making adjustments such as working part- or full-time during retirement or altering your lifestyle to lower your spending budget. Even a part-time job somewhere in your community can significantly help your bottom line.
- Don't force your retirement dreams on your retirement reality. When planning how you're going to live in retirement, consider that your planned lifestyle needs to match up with your actual income at the time of retirement. So not only should you estimate your expenses during retirement (which is a good idea at any age), you should also re-evaluate those estimates alongside your portfolio and other expected income as you get closer to retirement. This will help keep your plans in line with reality.
The bottom line is that while some of the statistics mentioned here may be new, the solution has not changed. Prepare early, contribute often, increase contributions when you're able, and set goals and make plans that can be adjusted should unforeseen changes occur. To help determine how much monthly income your current retirement savings may provide you in your retirement, please utilize our Retirement Income Calculator.
1https://money.usnews.com/money/retirement/aging/articles/the-ideal-retirement-age-and-why-you-wont-retire-by-then
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