Minimize the Impact of Retiring Earlier Than Planned

by Craig Moser on October 5, 2018

The old saying, “The best laid plans of mice and men often go awry” also applies to retirement.  Although retirement ages have risen over the last several years, Gallup surveys show approximately 50% of people retire about 3 years earlier than originally planned.  Whether an early retirement is planned or not, there are some things you can do to minimize the impact of retiring early.

Reasons to Retire Early

According to a Transamerica Center for Retirement Survey, the most common reason people retire early is they’re are laid off.  Generally speaking, the older you are, the more difficult it becomes to find gainful employment.  For example, if you’re laid off at age 60, the odds of finding another job are probably fairly slim.

Health concerns were the second most common reason people retire early.  Whether you need to care for an aging parent or yourself, a significant change in health often results in early retirement.


Because more than half of the Transamerica survey respondents retired earlier than planned, it’s possible you will too.  Your retirement age impacts many aspects of your overall retirement plan.  Things like when to claim Social Security benefits, the amount of money you need to save, and how long your retirement income will last are all tied to your retirement age.  To minimize the impact of retiring early, it makes sense implement a few steps now:

Be realistic about your timetable.

Take a realistic look at your current situation to estimate your retirement age.  Consider how much you enjoy working and trends in your specific industry.

Save more than you think you should.

To give yourself a little cushion, save more money that you think you need to.  Increasing your savings from 10% to 12% will come in handy if you end up retiring early.

“What if?”

Create a “what if” plan that looks at retiring two or three years earlier.  Doing this will generate different numbers you can use to decide how secure you would feel retiring early.

Minimize the Impact of Retiring Early

While a retirement income plan is valuable, it’s only as good as the assumptions you provide.  Because the age you plan retire can change for many reasons, it makes sense to play it safe. Work with your financial professional to develop a contingency plan that allows you to retire 3-4 years early than planned.  Should you need to implement that contingency plan, your future self will thank you.

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