Unexpected Retirement

I came across a survey sponsored by Sun Life Financial that really raised some concerns about retirement planning.

Sun Life Financial interviewed a group of people who retired involuntarily. The survey results were overwhelming.

Approximately one in five of the retirees interviewed were forced into retirement well before the age that they had anticipated retiring. The average retiree left the workforce eight years early.

The two main causes of the early retirement were 1) layoffs or downsizing and 2) illness or injury.

For 70% of these retirees, the forced retirement greatly impacted their retirement plans. Most of the retirees were funding IRAs and employer-sponsored retirement plans. Although we have considered ways to create a better retirement account, this may not be enough. They had hoped to have at least $1 million saved before retiring. However, the average retirement account only had about $500,000 when the retiree left the workforce.

Lesson learned: Stop procrastinating!

This survey prompts us to question our current preparations for retirement. Are we maximizing our retirement planning right now, or are we putting it off until later? As we can see from the survey (and as the Bible mentions to us), we aren’t promised tomorrow. Procrastination could put you and your family at risk if something happened to your current employment position.

Sure, if your company decided to layoff or downsize some departments, you may be able to find another job. But we have seen recently that, for many, this has not been as easy as it used to me. Thousands and thousands of workers have been job hunting for months. Some have been unemployed for over a year.

What about those retirees who experienced an illness or injury? What if physical limitations kept you from getting another job in any area?

Many of these retirees were too young to start drawing on Social Security to help supplement their retirement nest eggs. If we are solely or largely depending on the government for our retirement income, we may be greatly disappointed. We have to save for our own retirements so that we have access to money (without penalty) before Social Security benefits kick in.

With smaller amounts of money to draw upon, the retirees in the survey have been forced to change their lifestyles and cut back on expenses. For many people, cutting back on living expenses can be difficult.

Although I strongly recommend emergency funds that hold three to six months’ living expenses, the reality is that few people have any type of emergency money set aside. How many of us could comfortably keep up with a mortgage payment if our paychecks disappeared? Our whole lives could be turned upside down in an instant.

Retirement planning is not something to do when retirement gets close. It should be initiated as soon as we are hired on. Sure, goals may change, but it is better to have something than to be caught off-guard and left with nothing. If you’re not sure what to do or how to start, just talk to someone who can help guide you.

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