Early retirement may sound like a dream while working every day, year after year. For a good number of workers that dream gets actualized. According to a report, roughly 43% of workers retire earlier than they were expected to. The commonly heard reasons for people leaving their jobs earlier than expected were a shift or issues in their company such as reorganization or downsizing and health issues. Only a third of the 43% that retired early gave the reason for retiring as thinking they could afford it.
All your retirement plans can be thrown off if you are forced into early retirement. For example, if you were planning to work till the age of 67 and you are unfortunately laid off at 62 and can’t get another job, the disadvantage of this sudden change doubles. First of all, you miss out on a good five years of potential savings. Secondly, you will need more money to sustain you for the rest of your life seeing as you will be spending more time in retirement.
A few years may not seem like having to the potential of creating a worthy impact, but those few years can make a really huge difference. However, there are a few things one can do to shield themselves against these unpredictable situations.
The first one is the most difficult to do but the most obvious, saving more or as much as you can to cushion the fall in case of early retirement. Calculate how much you want to have saved by a certain age, then see how much you will need to put away to achieve that goal a few years earlier. Even if you are not forced to retire early and you plan for retirement with the notion that you will need more money with less time to save, which automatically sets you up to save more, you can simply end up retiring early because you can afford to do so.
Another thing is making the most out of social security. Use social security to your advantage if you may not be able to afford saving up more. Seeing as how much you receive on benefits depends on when you claim. To get 100% of the benefits that you are entitled to it is best that you claim once you have reached your full retirement age and depending on which year you were born it could be between the ages of 66 and 67.
If you end up retiring earlier than you had expected, all your plans could be tossed out the window. No one can predict your future, just ensure you have plans in place that will prepare you for any hurdles that may come your way.