The Unexpected Early Retirement: Are You Ready for It?

It’s not exactly a compliment to be called a control freak, but let’s face it—aren’t we all a little bit of one? We all want to feel like we have control over our lives, and we go to great lengths to plan for the future. That’s why industries like mine exist—to help people prepare for a specific set of assumptions.

We use preventative care at the doctor to avoid future health issues. We wear seatbelts in case of an accident. We even set out our clothes the night before, because let’s be honest—no one makes good decisions about what to wear when they’re half-asleep. All of these actions are ways we try to create a sense of security and control.

But despite all our planning, life has a way of surprising us, doesn’t it?

One area where surprises are particularly common is choosing when to retire. And for many, retirement doesn’t happen exactly as planned.

When Plans Go Off Track

Not long ago, I got a call from a prospective client. This guy had everything about his retirement mapped out, down to the tiniest detail. He’d thought of nearly every contingency—except one: what happens if I have to retire earlier than expected?

He had just found out that was exactly what was going to happen, and it wrecked his world. Now, don’t get me wrong—it didn’t actually wreck his finances. Once we dug into his plan, everything was going to be fine. But in that moment, he was overwhelmed, and I don’t blame him. He’s not alone.

The Gap Between Retirement Expectations and Reality

Let’s look at some numbers from the Employee Benefit Research Institute:

• Nearly 46% of retirees leave the workforce earlier than planned.
• 68% of current workers expect to retire at age 65 or later, but only 31% of retirees manage to do so.
• The median expected retirement age is 65, but the actual median retirement age is 62.

That’s a big gap between expectations and reality. So, what’s going on here?

Why People Retire Earlier Than Planned

There are a few common reasons why retirement comes sooner than expected:

1. Financial Independence
   About 35% of early retirees leave the workforce because they can afford to. That’s the dream scenario—retiring on your own terms.

2. Health Problems or Disability
   Unfortunately, another 35% retire early due to health issues or disability, making it the most common reason for unplanned early retirement.

3. Company Changes or Downsizing
   About 31% are forced to retire due to layoffs, company mergers, or other workplace changes beyond their control.

The Importance of a Backup Plan

These statistics highlight why it’s so important to stress-test your retirement plan. Even if your ideal retirement age is 65, life might have other plans. Being prepared for those possibilities can make all the difference.

So, how do you plan for something you can’t predict? The answer is simple: you need a backup plan.

How to Prepare for the Unexpected

If you’re within a few years of retirement, now is the time to get serious about planning. Don’t wait until a year before your planned retirement date. If you’re five years out, start mapping out your options now.

Here are two ways to get started:

1. Use a DIY Planning Tool
   Tools like Boldin (formerly New Retirement) allow you to map out different scenarios and get a clearer picture of your finances.

2. Hire a Financial Planner
   If you prefer a deeper dive or don’t want to go it alone, hire a financial planner. Just make sure it’s someone who isn’t trying to sell you a product—find a professional whose sole focus is helping you plan.

Start Now for Peace of Mind

Whichever route you choose, the key is to get started. Don’t wait until you’re forced to retire earlier than expected to figure things out. With the right planning, you can still have a great retirement—even if it happens sooner than you anticipated.

Retirement surprises don’t have to derail your plans. A little preparation now can save you a lot of stress later.