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Financially Dealing with an Unexpected Early Retirement

Senior couple sitting in chairs facing a lake with mountains in the background

Courtesy of Brooke Chaplan

Life is full of surprises, and you never know when you might face a major career change. Most people plan to work well into their senior years, but there are times when you might be required to end your career sooner than expected. You might need to retire early due to a health issue, or the company that you work for might be laying people off. An unexpected early retirement doesn’t have to ruin you financially when you know how to deal with it effectively.

Begin Scaling Back

Any new financial situation requires you to take prompt action. This is a good time to sit down and think about your needs versus your wants. For example, you might be able to cut out a subscription program that you rarely use. Although you may need to scale back, try to remember that you still need to leave some room in your budget for fun.

Review Your Current Financial Situation

In an ideal situation, you should already have a retirement plan in place that just requires you to make a few adjustments. If not, then now is a good time to put together a plan for the rest of your retirement. Seeking professional help with financial planning helps you to put yourself in the right position for handling your money from this point forward.

Identify Ways to Increase Your Income

Although you might be retiring, you might still have ways to keep income flowing into your accounts. For instance, you might choose to start a home-based business that lets you continue to use your skills. Many people find success with doing minor home repairs or with offering cleaning services in their community.

Be Prepared to Adjust Your Plan Over Time

A lot can change after retirement. You may need to change your plans if you get married or move to a new location. Make sure to review your financial accounts at least several times a year to identify areas where you may need to make further adjustments. You might want to move more money into your investment accounts if your financial situation begins to look up. Alternatively, you might need to reduce your expenses more as you age.

Your financial situation can change throughout your life. While you might have thought you had it all figured out, it is possible to adapt your retirement plans to changes in your career. The right investments combined with knowing how to scale back and increase your income all work together to make sure that you have what you need to retire comfortably.

Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan

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