Even with a solid retirement plan in place, life can include big and unexpected changes.
About 46% of retirees left the workforce earlier than planned, according to the 2016 Retirement Confidence Survey released by the Employee Benefit Research Institute. Corporate restructuring and downsizing are both components of this statistic, but an earlier-than-expected retirement could also happen due to a health condition or the need to care for a loved one.
Whatever the reason, if you find yourself looking at an unplanned retirement, it’s crucial that you assess the situation and develop a strategic plan in order to enjoy the years ahead, says Donna Peterson, Retirement Income Strategist for Wells Fargo Advisors.
If you’re currently working, one way to get an extra layer of protection against unexpected changes is to adjust your potential retirement date. For retirement goals, “target an earlier age,” advises Peterson. For example, if your plan is to work until the age of 65, modify your savings strategy to fit the goal of retiring at age 55. If things go well and you end up working until 65, you have extra income to provide for some luxuries in retirement or pass on to family.
Another way to stay ahead of possible employment changes: evaluate your current skills. If you believe there’s a chance your organization will be eliminating your position in the next few years, think about pursuing education opportunities to update or realign your résumé. You may even opt to switch to a different field or industry if your current line of work comes to an end. While a later-in-life career change may seem daunting, it presents a great opportunity to pursue personal interests and passions that you never had time for in the past.
For medical conditions that increase the odds of an early retirement, it’s worthwhile to look at the alternatives you may have for health insurance. If your current employer provides health coverage, you’ll need to replace this benefit after retiring. Perhaps you have a spouse who works and receives health insurance for the family — check the details of the plan to determine if you can switch to the spouse’s health plan if necessary. Consider adding long-term disability coverage to provide income if you are injured and unable to continue working.