How to Cope with Unplanned Early Retirement
When a working individual starts to reach the 60-70 age bracket, it is an automatic indication to some companies that the time has come to let that employee go. In some cases, it is a result of health problems that cause many retirees to leave the workforce earlier than planned. Some people have a set age or year in mind which they feel comfortable to retire by. But, with many other things, sometimes retirement cannot be planned. Unexpected early retirement generally means you will need to make some major adjustments to your retirement finances. Here's how to cope with an unplanned retirement:
Do a Financial Stock Take
Before making any drastic decisions regarding your finances and the steps moving forward to retirement life, do yourself favour and evaluate all the savings and incomes sources you currently have. Looking at this, you will have to determine if those amounts are enough to pay all your monthly expenses. If you are in a position where you are unable to cover your expenses, then you must find a way to reduce your expenses or extend your working life.
Revise your Retirement Spending Strategy
Considering you initially planned to spend 4-5 per cent of your total savings each year after retiring at age 65 or 70, it might be advisable to lower that percentage in order for your retirement money to stretch. When you are not receiving a monthly salary, you really need to be smart about how you spend. Start off by saving on groceries, find out when there are pensioner specials and try to buy goods on promotion. Also, keep a close eye on taxes as you begin to spend down your retirement assets.
Live within your New Budget
If you unable or don’t have an interest in finding a new job, you will need to learn to live on what current retirement income sources can provide. When making a financial transition moving into retirement, whether you are able to live lavishly or modestly you need to think long-term. Adjust your lifestyle to what your finances can accommodate – it is always better being comfortable in a lifestyle than having to ‘keep up’ or chase one that you previously lived or desired.
Structure Your Days
Once you set out a plan for each day, you will find yourself looking forward to days ahead. Setting a framework for your week will get you into a new routine and make your days meaningful just like when you got up for work in the morning. Take advantage of your new routine; some people make lunch plans every day, other take up creative classes or take up volunteer work one or twice a week.
Stay tuned to your Connections
Risk factors that come along with early retirement include loneliness and social isolation. It is important that to keep in touch with friends and establish friendships bases in new activities or places you decide to go to. Popular gatherings for retirees include church societies, neighbourhood committees and volunteer organizations.