You might not plan on retiring early. But illness or downsizing could lead to an abrupt departure from the workforce. If this happens, are you prepared to deal with the financial issues? Preparation is key. While you’re still working, you can take a number of steps.
First, consider increasing your emergency fund to 12 months’ worth of living expenses, with the money kept in a liquid, low-risk account.
Also, if you’re concerned about forced retirement, you may want to evaluate your investment portfolio to determine how a change in your time horizon might affect it. And think about Social Security. You can collect benefits at 62, but your checks will be bigger if you wait until your full retirement age, which is likely between 66 and 67. Of course, if you need the money, you may not be able to afford to wait.
Finally, consider your health insurance options. If you lose your employer-sponsored coverage, and you’re not old enough for Medicare, you may want to connect with your state’s health insurance exchange.
Taking an unexpected retirement can be challenging — but the more prepared you are, the better your outcomes are likely to be.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Member SIPC