The Retirement Time Bomb
You weren’t planning on making retirement decisions so soon. You thought you had years to go before you entered the critical transition period, where the choices you make now set the stage for the next 30 years of your life. But the timer is ticking. You’ve got to make good decisions, fast.Most folks at this crossroads have arrived from three paths. Which one is yours?
You’ve been let go from your former employer. With experience comes wisdom— and often more expensive benefits that the firm no longer wants to pay. Can you afford to retire on what you have saved? You’ve been offered a retirement buyout. It’s tempting, but is it the best deal for you? Will the package explode your plans down the road? What do you need to know to make the best decision? You were dedicated to your career and loved your job for years and years … until now. You’re not sure if the hours are worth it anymore, but you don’t know if early retirement is the right move. Would it be better in the long term if you continued until full retirement age, even though you must make personal sacrifices to do so? Whether your employer dropped the bombshell on you or not, you’re suddenly at a crossroads you didn’t expect. You need to evaluate your options speedily while sweeping up all the information you need to head in the right direction. This timely guide is designed to help you quickly make good decisions about your future and discover whether you can afford to “cut the wires” that connect you to the workforce.
Questions you might be asking yourself include:
• What do I need to know to decide whether I can retire early?
• Is my financial situation stable enough to last throughout my lifetime (as well as my spouse’s)?
• Will I need to continue to work after my “retirement”?
• How will my family react to me no longer working?
• What resources can I count on to help me with this situation?
If you’re too young to claim Social Security, you’ll need to create a plan to bridge the income gap until you reach claiming age. If you’re under age 59 you may be penalized for drawing down retirement accounts (on top of the potential tax bill you’ll owe). Many people in your situation seriously consider taking another job. But it could be hard to find another position that rewards your experience and work ethic. Even if you’ve got enough cash on hand to avoid drawing on your investments, you may still want to adjust your investment mix. When you’re on the brink of exiting the workforce, protecting your money from fluctuations in the stock market becomes critical. Preparing your portfolio to ride out bear markets and recessions is key when your portfolio is the foundation of your retirement lifestyle.