|By Rodney Brooks, @Perfiguy, USA TODAY|
That retirement you're looking forward to in five years: Be prepared for it sooner than you expect.
Numerous surveys have shown that people think that they are going to retire later than it happens. The two big reasons: health issues and losing your job. According to the
Unplanned early retirement can create havoc with your retirement plans. Those five or 10 additional years of saving were no longer possible. Some may have had to take
"I have several clients and families who have gone through this," says
Others are not prepared psychologically.
"Don't leave your retirement to hopium," says
How to be ready:
•Do an assessment. Sullivan says you should look at cash flow, balance sheet, insurance and estate plans to get an idea of where you are today and the impact of earlier-than-expected retirement.
•Plan for the unexpected."If you pre-rehearse those types of contingencies, you are far more likely to make good decisions in an emotional moment," says
It's not that different from helping children who are afraid of monsters in the closet, Sicchitano says. "The best solution is turn the light on, and see how big he is, how scary he is."
•Build an emergency fund."You want to make sure you've built an adequate emergency fund," says
•Consider what you want in retirement. Once people get into their 50s, they need to look at how early they can retire, based on what they want, says
•Reduce debt. "The more you can lower your committed expenses, the more flexibility you have," says Sicchitano.
•Maximize contributions to your 401(k) and minimize fees.
|Copyright:||Copyright 2014 USA TODAY|