Tame Unexpected Retirement Fears With These 5 Moves,
You weren’t planning on retiring, but now you may not have a choice. Sudden retirement comes about when your company decides to eliminate your position. Call it downsizing, rightsizing, or layoffs; when it is you in that situation you call it sudden. Here are five things you can do to build a new plan of action.
1. Put Together a Retirement Income Plan
A retirement income plan is a timeline that shows you how much income you will have, what sources it will come from, and when each source starts.
It includes Social Security, pensions, annuities, anticipated savings and investment account withdrawals and projected retirement account withdrawals. Once this plan is in place you can decide if you must reduce expenses, find additional work, or if you’ll be just fine as things are. You can also use your plan to compare alternatives. In many cases of sudden retirement, people think they must start Social Security early, or instantly begin their pension, but that isn’t always the best option. Your plan allows you to layout various combinations of things and see which one gives you the best long-term outcome.
2. Re-evaluate Needs Verses Wants
I’ll admit, I am emotionally attached to my monthly pedicures and a good bottle of wine. But are those needs or wants? I have to put them in the wants category. When your income is suddenly lower than expected, first thing to do is cut back on the wants.
You can always add them back in later. Go through your bank and credit card statements and find ways to eliminate the extras right away. This can help buy you some financial breathing room to figure out a longer-term plan. One way to evaluate needs and wants is by creating what I call a values-based spending plan; it takes some soul searching but helps you identify the things that really matter the most to you.