Finance

5 Financial Steps to Take When You are Suddenly Forced to Retire Early

An unexpected retirement doesn’t necessarily have to be an unplanned retirement.

If you’re facing retirement earlier than you had anticipated, you’re virtually a part of the majority. About half of retirees don’t know that their retirement date is right around the corner, and they never have the opportunity to plan accordingly. Health concerns often push people to retire before they’d like to, and companies will sometimes offer early retirement in an effort to downsize.

Most people never know they’ll face a situation where retirement is the only solution. When situations like these happen, new retirees should be poised to move appropriately.

Take What’s Made Available to You
If you qualify to receive social assistance, don’t be too proud to request it. You’ve spent your entire working life contributing to these programs so that you could redeem them when you needed them. If you’re of age to receive social security benefits or government subsidized healthcare benefits, take them – you’ve technically already paid for them. If you’re retiring due to disability, you may also be entitled to disability benefits.

Consider Taking on a New Job
If you’re retiring because your company is making you, rather than because you can no longer work, consider taking another job. You won’t start at a new place in the same position. Your pay won’t be the same, and you may wind up working fewer hours. Continue to work if you’re up to the task. This will give you more time to save and strategize while you’re still making long term decisions about your official retirement.

Make Fiscally Sound Lifestyle Changes
When your sales bonuses and overtime are gone, will you still be able to afford to live your current lifestyle? It may be wise to put the house on the market and get that condo you’ve always dreamed of. It may be less expensive, especially if the condo is designed for retirees. Smaller houses, apartments, and condominiums also cost less to cool and heat, so you’ll save money on your monthly utility bills when you decide to downsize.

Take Inventory of Everything
What do you own? How many bills do you pay every month? Are you paying for things you don’t even use? How much, realistically, can you afford to spend every week? Taking a thorough inventory of all the facts and figures will allow you to come up with the basic semblance of a budget. You’ll need a basic short-term plan to get you through until you’ve developed a solid long-term plan. The sooner you start moving towards saving and cutting expenses, the sooner you move towards balanced books.

Work with a Financial Advisor
What you do with your money during retirement is more important than what you do with your money at any other stage of your life. Most people in retirement live on fixed incomes, and they need to understand how to manage money with their earning potential throttled. This is precisely the reason why so many retirees choose to work with financial advisors for important guidance.

A financial advisor will be able to tell you how much you’re actually worth in cash and assets. He or she will help you establish important priorities and key dates for your financial goals. If you play your cards right, you might even be able to strategize a few getaways to enjoy with your newfound free time. A great financial advisor will keep you in a forward-thinking mindset while helping you take the path of least resistance.

In short, early retirement may be inconvenient, but it doesn’t need to be the worst burden of your life. As long as you meet the challenge with valuable actions shaped to secure your future, you’ll be resilient enough to remain on your own two feet.

About Alana:
Alana Downer is a staunch promoter of financial literacy, currently supporting Learn to Trade – an educational place for traders and investors.

 

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