Sometimes a person thinks they have reached early retirement. Other times they are ‘pushed out‘ of their job or career.
Retiring Too Early Or Not
Either way, if they have not done financial planning to mitigate for inflation, their retirement can quickly go sideways.
Here are 3 solutions to facing a situation of retiring too early.
- Get a part time or gig job: This doesn’t necessarily mean being a retail greeter. There are all kinds of work to choose from now, especially with a tight labor market. Many employers of these part time jobs prefer an older worker, because older workers can be more reliable. There are also many employers that are able to work around your schedule.
- Streamline your lifestyle: Do you know where your money is going? If not, time to find out. Are each of the expenses adding quality to your life? If not, why are you spending money on it/them? Low hanging fruit tends to be eating out and groceries. This isn’t to advocate for buying poor quality food. Quite the opposite. It’s to shed light on shifting away from packaged food to perhaps getting creative about making meals from scratch (if you aren’t already).
- Review your portfolio: Is your portfolio growth able to exceed the growth of inflation? You need to stay true to yourself here. If you are unable to take on more risk with your portfolio, then you perhaps would only sabotage yourself by taking on risk that would keep you up at night during times of volatility. There is a tradeoff: Would you rather lose sleep over watching your purchasing power erode year after year because your portfolio can’t keep up, or are you willing to take on more risk knowing that there will be bumps in the road for taking on a little more risk?
What else can you do? While a degree of adopting all 3 of these to some degree will get you to a higher likelihood of not running out of money, you may want to first make sure your perspective on recent portfolio changes is accurate. Also, even though I am obviously biased in saying this, working with a CFP ™ will reap peace of mind that you are on the optimal path to having the type of retirement you want.
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.