Column: How To Plan For Early Retirement

January 5, 2017 | 2 Comments

[Written by Carla Seely]

As the New Year is upon us, new goals and new visions are being created to make this a prosperous and successful 2017. Perhaps you are in the later stages of your career and are consciously developing a succession strategy for your role to ensure a smooth transition when you do retire. Ever thought what would happen if you were forced into retirement well before your succession strategy could ever be executed?

Imagine you have spent countless years growing your career, contributing to the success of your company, mentoring new employees and navigating between all the politics, only to be replaced by a young enthusiastic “Whipper Snipper” fresh out of university.

Carla Seely Bermuda Nov 21 2015 TC

Firstly let’s be honest, it does happen and it happens often, however, this article is not about age discrimination, it is about how to navigate the waters when retirement happens earlier than expected.

Here are a few helpful tips:

Negotiate a retirement package if possible

If your contract is not being renewed or retirement has been strongly suggested to you, it would be wise to negotiate a retirement package. Perhaps it could be three to six months’ salary or being allowed to stay on the health insurance with the employer covering 100% of the premium, but trying to get something out of the situation is important while you get your feet back on the ground.

Visit a retirement planner or advisor

You will need to meet with a professional who can give you an independent view on how much you will need to retire. Perhaps you will be better off than first expected or perhaps you need to make some life changes quickly in order to survive. The goal here is to look at your finances as a whole and determine what you need to do for a stable future.

Determine How You Are Spending Your Money

When times are good, most people do not think as much about how they spend money, they don’t pay attention to daily spending. How much do we spend going out to eat? What is our weekly grocery bill? What about utilities and insurance? Being more aware of how you spend your money will cause you to spend it more carefully and allow you to determine any reductions that could be made.

Cut back financially

If you have been forced into retirement then you will stop receiving a pay cheque and will need to come up with a plan for cutting back expenses. Develop a budget that eliminates most unnecessary expenses, but don’t completely cut entertainment. You need to maintain your spirits and keep up with contacts should you be still looking for work.

Downsize now not later

If your plan in retirement was to downsize the family homestead and buy a smaller property and use a portion of the equity from the sale to fund your retirement, then perhaps now is the time to implement this plan. This might provide the additional retirement funds that you needed, and the only difference is you executed your plan earlier than scheduled.

Find Part-Time Work

You will be able to stretch your savings if you have additional income. Consider part-time work, this could provide the supplemental income needed to at least cover your health insurance or other expenses.

I recommend to all my clients younger and older that they need to start putting additional money into their company pension plan. Whether it’s an additional 1% deduction off their pay cheque per month or additional $500 per month, making voluntary contributions is the easiest way to build retirement savings.

There are no golden rules on how to handle being forced into retirement, but what you can do is recognize that it does occur and you need to financially prepare for it in case it does happen.

- Carla Seely is the Vice President of Pension and Investments at Freisenbruch-Meyer, if you would like any further details please contact cseely@fmgroup.bm or call 441 297 8686

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Comments (2)

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  1. JUNK YARD DOG says:

    Retirement is not exactly like being on a permanent holiday.

    For the retired individual get all you chores done in the morning it is good to be able to say you have accomplished something even if it cleaning house or washing windows , organizing your kitchen or closets, so long as you keep moving.

    For the guys washing the car is a perfect aerobic exercise, doing something is better than doing nothing, you are the boss now, what ever you choose to do by all means take your time , take walk in our beautiful island , the Railway Trail sounds like a good idea ,visit ye old town of st George, because, no body is keeping book.

    It is very important to keep up appearances of the 50 ‘s be very careful with your money management.

    Down sizing means less is more.

    Always leave time in the afternoon for other fun activities and to do all those fun things you dreamed of when you were younger,except shy diving and surf boarding in other words keep busy.

    Many of you in the work place would jump at retirement tomorrow, think twice, may be all you need is a vacation or an attitude adjustment.

    Regardless of what you do at work try to make the best of it, remember you were given you job by your employer because you were considered the best of the best, you worked hard to get that job ,now you work hard to keep it.

    Become the professional that you are, be good at what you do.

    When dealing with the public a smile always looks better on you,
    work should be fun,and enjoyable if not make it so , you will you be much happier .

    Christmas does not come one a year it comes every day.

  2. JUNK YARD DOG says:

    To those people who said “LIKE” to my post, thank you.

    Showing respect, that is being positive , being in agreement,being thoughtful and caring, are all greatly appreciated ,it shows we can all get along with one another we may not always agree,we are all entitled to our point of view,its all good, however it all goes wrong is when negativity is on the table.

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