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 Employee Benefit Research Institute (EBRI), 47 percent of American retirees in a 2013 survey retired before they planned, mostly because of health or disability.
Some advice on how to be ready in case unexpected early retirement happens to you:
• Build an emergency fund. “You want to make sure you’ve built an adequate emergency fund,” says Marc Freedman, president CEO of Freedman Financial in Peabody, Mass., and author of the book Retiring for the Genius. “Six to 12 months of your living expenses,” he says. “If you are 55 and faced with retiring soon, you should be able to do that.”
• 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 Joe Franklin, president of Franklin Wealth Management in Hixson, Tenn. “Determine at what age you are independent enough to say, ‘I can keep working if I enjoy it or leave if I don’t like it.'”
• Reduce debt. “The more you can lower your committed expenses, the more flexibility you have,” says Sicchitano.
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