Are you looking at an unplanned early retirement? Retirement may come sooner than you think if your company is downsizing or closing and laying off employees. They may also offer you early retirement to bring in someone younger, someone they don’t have to pay as much, or provide the same benefits package.
If you find that your retirement is coming sooner than expected, know that you are not alone. According to U.S. News and World Report, “Over 2.9 million workers ages 55 to 70 left the labor force during a six-month window in 2020.” That number has continued to increase.
Here are some tips to help you navigate an unplanned early retirement:
1. Figure Out Your Retirement Income
Take a look at your savings, severance package, pension, investments, Social Security income, and any other source of income you may have to determine your assets and what you have to work with after your unplanned early retirement. You’ll find it beneficial to speak with a financial planner who specializes in retirement.
2. Re-Evaluate Your Spending
It may be time to cut corners and find some ways to cut your expenses. Does it make sense to pay off your car or your home so you don’t have added interest payments, or is it better to keep that money in savings? Do you still need a complete cable package, or would streaming services be less expensive? Compare the things you need and the things you simply want, then figure out what you can cut from your want list. You can always add it back in later if you figure out it’s possible.
3. Think About an Alternate Job
Many people find another job after an unplanned early retirement. You may need to consider working, but probably not as much as you did before. A part-time job can get you out of the house and bring in a little extra cash every month. Plus, you won’t have all the responsibilities of your former job. Or maybe it’s time to think about starting your own business or side hustle for extra cash. What skills and knowledge do you have that can benefit you now in a new job or business?
4. Don’t Panic
Now is not the time for hasty decisions. Don’t do anything before thinking it through and looking at all the options. Instantly filing for Social Security or taking your pension can have long-term consequences on your income. You’ll want to carefully consider what your best options are with an early retirement, and you may find it worthwhile to speak to a professional to help you make the right choices.
5. Know the Difference Between Temporary and Permanent
You may need to make some temporary decisions to help you manage while you’re figuring things out. It may mean cutting back on things you want to do, slashing your cable or cellphone bill to cut expenses, and planning some budget-friendly meals. These don’t need to be permanent choices, but they will help you through the early stages of unplanned retirement. Permanent decisions that can have lasting effects such as filing for social security or withdrawing from a retirement account too early can end up costing you in the long run. Be intentional about the decisions you make and carefully review your options.
Your early retirement may be unplanned, but if you make the right decisions to see yourself through, it can end up being a good thing and something you’ll be grateful for down the road.
Help Is Available
If you need career advice or interviewing tips, reach out to Rachel Schneider with CareerFind for a free intro call.