Skip to content

    6 Ways to Prepare for an Unexpected Early Retirement

    October 27, 2017

    “I’m going to work until I’m 65.”

    Many of us may feel this way, but the startling truth is this: either due to health issues, downsizing, or the health of a loved one, nearly 50% of us will be forced to retire earlier than we had planned.1

    The old adage, “an ounce of prevention is worth a pound of cure” could not be more apt when it comes to thinking about retirement. We may have every intention to keep working past the age of 62, 65, or later, but circumstances change, and so must our plans.

    Why Me?

    We might anticipate facing health difficulties as we age, and do our best to stay healthy and active. However, even the best laid plans meet unexpected obstacles. In 2017, there remains a big gap between the age in which workers plan to retire (65) and the age they actually do (62).1Beyond ailing physical health, here are some of the top reasons we may least expect:

    1. I lost my job
    2. I have to care for my spouse or family member
    3. Relocation (i.e., due to natural disaster, family obligations)
    4. Mental health (addiction, depression, anxiety)

    Think Again

    A mere 4 out of 10 workers1 have tried to calculate how much retirement will cost. Don’t wait! It could cost you more than you think.

    If we consider these calculations2 now, decisions we make today can make all the difference for us tomorrow. Here are some of the things you should consider:

    1. What are your fixed costs?
      • Mortgage
      • Utilities
      • Insurance
      • Service payments
      • Real estate taxes
      • Alimony
    2. What are your flexible expenses?
      • Travel
      • Entertainment
      • Luxury items
    3. What are your income sources?
      • Social Security
      • Pension
      • Retirement accounts (ie, 401(k), IRA)
      • Inheritance
      • Rental income
      • Investment income
      • Stocks, Bonds, Mutual Funds, CDs
      • Part-time or full-time work
    4. What are your healthcare costs/needs?
      • For yourself
      • For your spouse
      • For your dependent

    Pound of Cure

    There’s more to planning for retirement than money management. Regardless of when it happens—unexpectedly early, or on our own terms—we can develop certain habits now to mitigate problems and strengthen our viability later.

    1. Rethink work – Look for a job now, when you’re not “looking for a job.” Start thinking out of the box about ways you might work part-time or in a different capacity. Having a work plan in place will give you peace of mind now, and provide you extra cash in hand should you need it later.
    2. Practice streamlining – Make small adjustments to “fun” spending. Take a close look at your spending habits. What is wasteful or overly generous? By trimming luxury expenses here and there, we can build healthier spending habits in the event of financially leaner times. Need help tracking spending? Download our free budget template.
    3. Review your benefits – Social Security and Medicare choices change yearly. Be sure you stay current on new tax laws, penalties, rules for eligibility, and benefit details.
    4. Talk to experts – If you have an investment strategy in place, that’s great! If not, consider making one today. Regardless, yesterday’s plan may not fit tomorrow’s financial landscape. It’s important to stay diversified in an ever-changing market. Work with people you trust to ensure a secure future with a sound retirement plan.
    5. Write it down – Globally, only 14% of workers have a written retirement plan.3 The good news: If you take the time to write a strategy, you significantly improve your chances of acting on those intentions.
    6. Indulge in joy – Abrupt change in lifestyle can trigger anxiety and depression. Whether we face retirement unexpectedly or not, the shift from working to not working is no small thing. By staying connected to what makes us happy, we can decrease stress and encourage a positive outlook.

    Conclusion

    With retirement comes uncertainty—that much is certain. But uncertainty doesn’t have to mean insecurity. Take some time today to think about what you need to continue to be happy tomorrow. Prepare yourself for the unexpected. Craft a Plan B. Rethink your retirement plan. Do things today that make you happy, and make a habit of it.

     

     

    1Employee Benefit Research Institute, 2017 Retirement Confidence Survey

    2Personal Decision Points: 7 Steps to Your Ideal Retirement Transition, Scott Hanson

    3Aegon Retirement Readiness Survey 2017
    © 1993-2024, Allworth Financial. All rights reserved.

      Privacy Policy   |    Disclosures   |    Cookie Preferences   |    Do Not Sell or Share My Personal Information

       

      Advisory services offered through Allworth Financial, a Registered Investment Advisor | Disclosures | Privacy Policy

      Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Check the background of this firm on FINRA's BrokerCheck.

      HMRN Insurance Agency, LLC license #0D34087

      1Barron’s 2024 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking of independent advisory companies is based on assets managed by the firms, growth, technology spending, succession planning, and other metrics.

       2 Retention Rate Source: Allworth Internal Data, FY 2022

      3 The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey. 

      4 As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration. 

      5 InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience. 

      6  2021 Value of an Advisor Study / Russel Investments

      7 Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.

      8 USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.

      9 NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.

      ✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

      ✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

      †Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company. 

      Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.