Planning for an Unplanned Retirement
Many Americans today are unsure if the money they have saved will be enough for retirement. Hence, many plan to remedy this problem by working.
Even though most of us would like to think we have some control over how long we will work, life has a way of throwing a curveball. Whether it comes in the form of a health issue or a job layoff, sometimes the decision of when to retire is out of our hands.
A Retirement Confidence Survey conducted by the Employee Benefit Research Institute found that nearly half of American workers retired earlier than expected. Thus, planning to work into your 70s is not something to rely on. Below are a few things to consider when planning for an unplanned retirement:
- Learn about benefits. If you are retiring earlier than planned, immediately talk with whoever handles your company’s benefits to understand what is available to you. You may discover you are entitled to severance pay or an early retirement package, and you may also qualify for unemployment compensation or Social Security disability benefits. Also focus on health care, and whether you will be eligible for Medicare.
- Know your financial status. Look at your sources of income, including any pension or termination payout you may be entitled to, your 401(k) or other retirement plans, and any personal savings or investments. Add your spouse or partner’s earnings and savings to the equation as well.
- Zero in on spending. Understand how much it costs to support your lifestyle. Identify your fixed expenses (needs) and discretionary expenses (wants). Compare them to your anticipated monthly income, and set new spending goals. Consider finding full or part time employment, as there are many opportunities to create income in retirement.
See Rebekah Barsch, Laid Off At 60? How to Plan For An Unplanned Retirement, Forbes, Nov. 17, 2017.