Published: Tuesday, September 7, 2010
Sudden retirement can throw off plans
Ivan Shomer and his wife planned meticulously for their retirement, but even they were caught off guard when he was laid off from his sales manager job four years ago, essentially forcing him into retirement at age 63.
"We definitely had to tweak a few things," said Shomer of Carrollton, Texas. "We had to set up a budget sooner than we had originally planned. We wanted to see where did our money go and what's mandatory in the way of expenses and what's optional."
Successful retirement planning requires a methodical, thought-out approach and a strong sense of where you want to be when you stop working.
But, as the Shomers found, the vagaries of the job market can torpedo the best-laid plans, and if you're forced to retire before you're ready, it can really throw off your planning rhythm.
For one thing, the time you thought you had to catch up on retirement savings is abruptly cut short.
"Take some time to pull back and evaluate your options," said Derrick Kinney, senior financial adviser at Derrick Kinney & Associates in Arlington, Texas.
Here are some of the things you need to consider.
Your severance. "One of the first things to review is what the severance package, if any, is," Kinney said. "This will help serve as your lifeline for the next few months and helps buy some time to make longer-term decisions."
Social Security benefits. A crucial decision you'll face is whether to claim your Social Security benefits early.
Workers may start receiving Social Security retirement benefits beginning at age 62 -- but they'll receive a lower benefit than those who wait until their normal retirement age. The normal retirement age depends on your year of birth.
Think broadly. Lynn Lawrance, a certified financial planner at Financial Network Investment Corp. in Dallas, said workers today have to prepare for "a retirement that could potentially span more than 30 years."
"We definitely had to tweak a few things," said Shomer of Carrollton, Texas. "We had to set up a budget sooner than we had originally planned. We wanted to see where did our money go and what's mandatory in the way of expenses and what's optional."
Successful retirement planning requires a methodical, thought-out approach and a strong sense of where you want to be when you stop working.
But, as the Shomers found, the vagaries of the job market can torpedo the best-laid plans, and if you're forced to retire before you're ready, it can really throw off your planning rhythm.
For one thing, the time you thought you had to catch up on retirement savings is abruptly cut short.
"Take some time to pull back and evaluate your options," said Derrick Kinney, senior financial adviser at Derrick Kinney & Associates in Arlington, Texas.
Here are some of the things you need to consider.
Your severance. "One of the first things to review is what the severance package, if any, is," Kinney said. "This will help serve as your lifeline for the next few months and helps buy some time to make longer-term decisions."
Social Security benefits. A crucial decision you'll face is whether to claim your Social Security benefits early.
Workers may start receiving Social Security retirement benefits beginning at age 62 -- but they'll receive a lower benefit than those who wait until their normal retirement age. The normal retirement age depends on your year of birth.
Think broadly. Lynn Lawrance, a certified financial planner at Financial Network Investment Corp. in Dallas, said workers today have to prepare for "a retirement that could potentially span more than 30 years."
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