The Neyland Report
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SHOULD YOU RETIRE IN 2020?

SHOULD YOU RETIRE IN 2020?

SHOULD YOU RETIRE IN 2020?

As the national unemployment rate continues in record numbers, many American workers wonder if and when they will go back to work. Among them are older workers, many of whom report they are considering early retirement, rather than accept their perceived health risks in the workplace. But is this the right time to retire? What are the advantages and downsides of considering early retirement? The Neyland Report takes a look at the consideration of this major life change.

  • Social Security considerations: Before you make your final retirement decision, remember that full retirement age is 66 or 67, depending on the year you were born, but you can collect Social Security as early as age 62. At 62 you will receive a lesser monthly payment than if you wait until full retirement age. Visit the Social Security website where you can easily calculate how much you will receive based on your age.
  • Early retirement packages: Some companies are offering early retirement packages in order to trim their staff  due to the cutbacks imposed by the pandemic. Before you jump on that offer, take a hard look at it. For example, often a package will include health insurance for six months to a year. This may be very important if you are not yet 65 years old and therefore ineligible for Medicare. Also, any benefits that you have accrued, such as vacation pay, should be included in your retirement package.
  • Your retirement savings: If you are invested in a company-driven 401(k) or similar savings program, it is best to have a savings goal based on the amount of money that will allow to live comfortably in retirement. If you have not met the goal or are far from it, will you have enough money to last through the rest of your life? It not, do you have other sources of income to supplement your savings? These are critical considerations, as is your decision about withdrawing retirement savings during a recession.
  • Cost of post-retirement plans: If you have big plans for retirement activities, can you cover the costs if you retire early? Maybe you are planning on extensive travel, or buying a vacation home after you retire. Check with your financial advisor to determine if your investments will allow you to cover those expenses when necessary. Did the pandemic negatively affect your investments, or are they showing signs of resilience? Again, these considerations may influence your early retirement decision.

Then there are those who counsel us not to make major life decisions in the middle of a crisis. There may be something to be said for waiting to retire until you have a clearer idea of how the economy is going to rebound, and when. But, if you are in good financial shape and feel positive about retirement, this may be your time.

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