5 Reasons Why Retirement May Come Sooner Than Expected

Oftentimes, "retirement" seems like a far-off idea. No matter what stage of life you are in, retirement is a big life change that requires careful planning from a variety of different perspectives. The intent of this brief article is to look at a few different scenarios that could significantly change your plans — maybe a couple of years early, or perhaps much earlier than you might have anticipated. Some of these situations are good things and some are difficult, but all of them amount to an important decision you must make in terms of your career and your finances.

Your Health

With advances in modern medicine, many people are able to continue in their day-to-day lives with ongoing medical conditions all the time. However, this is not the case for everyone. There may come a point where your body simply cannot handle the same activity every day. This is not limited to your physical health either. As more people attend to their mental wellness, some may discover that their jobs present an obstacle to feeling at ease. No matter how great the job is, it isn't worth your health! Whatever your health factor may be, you may be able to transition into an early retirement over time, instead of leaving your job immediately.

For example, working from home rather than commuting every day. Working from home is much more "acceptable" these days, and more employers are comfortable with the idea. Shifting from full-time to part-time work could make things easier and allow for continued savings rather than drastically cutting off your working income. This transition often creates a more comfortable "easing into" retirement when time does come to finally retire fully.¹

Family Obligations

Your health isn't always the factor in retiring earlier than planned. Taking care of a parent, child, spouse or another family member who needs your attention can be a reason. Although care professionals may be a big part of meeting your family member’s needs, it is likely that you may want to be more present in their daily life. Here, too, transitioning to working from home might be a financial stopgap to help you enhance your eventual full retirement.²

A Sudden Windfall

Some circumstances leading to an early retirement are more positive! These more positive events could be a sudden windfall from investments, inheritance, or some sort of unexpected financial benefit. One side-effect of this great windfall could be the daily grind of your job becomes a little less desirable. Perhaps even completely unnecessary. Windfalls can present the opportunity to live your life a little more on your terms. One thing to think on before you decide to retire and enjoy a new lifestyle -- you may find life without meaningful work becomes a little too idle for your liking. If this isn’t a case where you’re transitioning to working fewer hours before full retirement, you should look into finding a new pursuit for your newly-discovered free time.

Moving On

And then there are those situations where the decision of making a transition is completely out of your hands. If the company you are working for is going through some sort of change, such as being purchased by a competitor, it may be in their interest to make some staffing decisions. Another common scenario could be a financial "tightening of the belt" for the company you work for, and they can no longer afford to pay you. Although you might find that you need to seek other employment, it is possible that this dovetails with the “windfall scenario,” where the company parts ways with you via a “golden parachute” severance package. In some cases, this parting gift may provide a financial bridge into your early retirement.³

A New Opportunity

Maybe your current job is simply a means to an end for you. Your real dream may be to pursue your own passion & skill to occupy your time. Maybe it is to start a small business. I have one client whose dream is to move to a farm and start their own bed and breakfast, for example. Maybe yours is to create a charity, one that allows you to focus your time and attention on matters that have a bit more meaning. Whatever opportunity you might have in mind for a way to use your retirement years to satisfy yourself, a new opportunity with built-in income for you may be a path worth contemplating.

Whatever your path to early retirement, it is always a good idea to run these scenarios past your trusted financial professional. They can assist you in easing the transition and adjusting your financial strategy accordingly.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.