Retirement, that long-awaited chapter of our lives, is ideally a time of our choosing. But sometimes life has other plans and circumstances beyond our control that can lead to early retirement.
In fact, even though the retirement age continues to rise, the average American still retires by age 62. So if you think retiring at age 70 is realistic, the truth is that it might not be.
Let us look specifically at a few reasons why retiring later is not always a reliable strategy.
Unexpected Health Problems
Even if you are the picture of health today, you never know what will happen in 5, 10, or 20 years. As you age, your health can suffer. Working longer is not a guarantee, as 34% of retirees in 2021 were forced to retire early due to a health problem or disability.
Your Company Downsizes
It is incredibly disheartening if you are in the last few years of your career and your company downsizes, leaving you in the dust when you were counting on the income to provide for you in retirement. In fact, 25% of retirees were forced into early retirement due to changes at their company. At this stage of life, it is challenging to find another job when prospective employers know you will be retiring soon. While you can keep your skills sharp and take measures to prove your value to your current employer, you just never know what will happen to your company as the years go on.
Your Family Needs Your Help
Your loved ones are aging right along with you. Even if your health is excellent and your company still needs you, you may need to step back from the workforce earlier than planned to take care of a spouse or other family member. Your family comes first, so you do not want to feel the pressure of working just to have enough in retirement if the unexpected occurs. It is not fun to plan for contingencies like this one, but having a proactive mindset can help you prepare for the worst-case scenarios leading up to retirement.
You Might Just Need a Change
When you are in your 50s and still have years to go before you retire, it may seem simple enough to push out your retirement date from 65 to 70. But what happens when, at 63 or 64, you cannot imagine working for another six or seven years? If you were banking on working until 70, you might not have enough saved.
The younger you are when you retire, the more energy and health you will have to enjoy retirement. Many retirees regret spending their best retirement years grinding away at work. Sure, they had more money when they finally did retire, but they had less time to enjoy it.
Since you cannot predict the future, how should you plan?
Start With a Plan
Being forced to retire earlier than we want may not be ideal, but it is a reality we must face. The key lies in being proactive and preparing ourselves for the unexpected, both financially and emotionally. To better navigate the twists and turns life may throw our way, it’s wise to diversify your income streams, build a robust emergency fund, and nurture a resilient mindset.
Remember that you do not have to continue your financial journey alone; we at Wellstone Wealth Management are here to help. If you want to review your retirement plan and target retirement age, schedule a complimentary introductory meeting by contacting us at 503-594-1210 or firstname.lastname@example.org.
Greg Allen is a CERTIFIED FINANCIAL PLANNER™ professional, Life-Centered Financial Planner, Managing Member, and second-generation owner of Wellstone Wealth Management, a life-centered financial planning firm that takes a unique Return on Life (ROL) approach to help their clients live the best life possible with the money they have. With over 20 years of experience, Greg holds fast to his mission of helping clients plan their finances around their lives, instead of the other way around, resulting in fulfillment, confidence, and a meaningful life. Greg also provides a caring, trusted long-term relationship and life-centered financial behavioral counseling. He specializes in working with people who have recently retired or are close to it (typically five years or less) and relates well to corporate executives and upper-management couples who often have complicated financial pictures and need help maximizing their wealth, reducing their taxes, and preparing for retirement so they can maintain their ideal lifestyle.
When he is not helping his clients find meaning and purpose, you can find Greg spending time with his friends and family, especially his wife, Sandy, children, and grandchildren. As a native Oregonian, Greg loves the outdoors, visiting the Oregon Coast, and retreating to their family cabin in the mountains. He enjoys staying involved with his church, reading, watching sports, and anything to do with exercise and wellness. To learn more about Greg, connect with him on LinkedIn.
Information provided herein is provided by Wellstone Wealth Management, LLC. This information is for general informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Information was compiled from third-party sources believed to be reliable and accurate but cannot be guaranteed. Investment advisory services are offered through Oswego Wealth Advisors, Inc., an SEC Registered Investment Advisor. Neither Wellstone Wealth Management, LLC nor Oswego Wealth Advisors, Inc render any legal, accounting, or tax advice. All investments involve risk, are not guaranteed, and may lose value. We recommend that all investors consult with a qualified adviser to assess your personal situation before implementing any strategy.
Please remember to contact your advisor when your financial circumstances or objectives change. Your advisor may recommend adjustments to your financial planning and investment strategies to better suit your current situation.