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Lost years are 'absolutely important' for retirement security
According to Katherine Collinson, CEO and director of Transamerica Institute and Transamerica Retirement Research Center, unplanned early retirement can have serious financial consequences for retirees.
“Many people are concerned about how severe the consequences could be and how critical an additional five or 10 years of service could be to achieving retirement security,” Collinson said. They may not even realize that it exists.”
If these new retirees receive Social Security benefits before their full retirement age (ages 66 to 67, depending on their date of birth), their benefits will be permanently reduced. The median age for claiming Social Security benefits is 64. According to EBRI. Retirees can wait until age 70 to receive their maximum Social Security benefits.
Retirees who quit their jobs at age 62 miss out on other economic opportunities.
Mr Collinson said they could lose five years of income, assuming they intend to retire at full retirement age of 67.
You may also lose any employer-sponsored retirement benefits or additional Social Security work history credits.
They also miss out on increased savings and investments because they believe they would have remained untapped if they continued to work.
Plus, you'll have to pay for health insurance before you turn 65, when you're eligible for Medicare, which can be expensive, Collinson said.
Reset your financial goals after early retirement
People who are forced into early retirement may not have much financial flexibility. But they need to sit down and make a financial plan, which will help assess the risk of running out of money in the future, Collinson said.
is a certified financial planner, OXYGen Financialan Atlanta-based financial advisory and wealth management firm.
When evaluating your finances, you should consider whether it would be advantageous to relocate, including where taxes may be lower. Carefully review the rules that accompany your COBRA or other health insurance plan. Jenkin, who is also a member of the CNBC FA Council, said look into any perks you may not be taking advantage of, such as credit card perks.
Mr Collinson said former retirees who are still employed should take note of this and take steps now to extend their working years.
By maintaining good health habits, keeping job skills current and relevant, and continuing to build professional networks, workers may be able to avoid unexpected early retirement, she said.
