Retirement: Expect the Unexpected

“To expect the unexpected shows a thoroughly modern intellect” -?Oscar Wilde

This is certainly true when it comes to retirement.

According to ThinkAdvisor, more than half of Americans retire earlier than expected, and only one out of six retired at the exact age they expected.

So, how can you prepare for an unplanned retirement? While it's essential to speak with a financial advisor for personalized advice, here are some things to consider if you find yourself in this situation:

Plan Your Exit Thoughtfully

Retiring is more than just leaving your job; it involves careful planning to maximize your benefits. You'll leave behind not only your regular paycheck but also other employer-related perks like health insurance and retirement account matches. Ensure you time your exit strategically to make the most of these benefits, such as cashing out paid leave you've accumulated.

Understand Retirement Plan Tax Implications

The retirement plan options and their tax implications can vary from one employer to another. If you're considering voluntary retirement, weigh the pros and cons of taking a lump sum upfront versus phased retirement benefits. Consider how the tax treatment will impact your after-tax income, especially concerning potential changes in your income in the future.

Coordinate Retirement Plans with Your Spouse

If you're married and pool your income with your spouse, it's crucial to align your retirement plans. Coordinated planning enhances the chances of maximizing long-term income, optimizing social security benefits, and managing taxes effectively over time.

Secure Healthcare Coverage

Don't overlook healthcare coverage during this transition. If you're not yet eligible for Medicare, evaluate whether purchasing individual insurance or extending your employer's coverage is more beneficial. Plan accordingly to bridge any coverage gaps.

While an early retirement may not have been part of your initial plan, unforeseen circumstances might lead you down this path. If faced with this decision, carefully weigh the short and long-term consequences. The goal is to ensure you don't outlive your assets or become a financial burden on your loved ones.

If you're curious about the possibility of an early retirement, let our team at Flagship Asset Services know. We can guide you through your options and help you make informed decisions for a secure financial future.

Thanks for reading.