Why you should plan to retire early even if you don’t want to

For millions of Americans, the idea of a traditional retirement doesn’t seem possible or attractive. Many people fear they can’t afford to retire, so they hope to keep working to avoid financial problems. Others enjoy their jobs or like keeping busy.

But while you may hope to maintain your career late in life, you shouldn’t base your retirement plans on that goal. No matter your intentions, it’s a good idea to plan to quit in your early 60s.

While this means you have to save more to be ready to retire on schedule, there’s one big reason to plan for early retirement even if you don’t intend to take it.

When you retire isn’t always in your control

As the coronavirus crisis has shown, life doesn’t always go as planned. Record low unemployment has turned into more jobless claims than ever, and millions of Americans are finding themselves without work and with no prospects of finding new employment anytime soon.

For those who lose their jobs in their 60s, starting over elsewhere can be challenging and stressful. Despite rules against age discrimination, unemployment is typically higher among older workers for myriad reasons, including employers viewing them as too costly or fearing their skills are out of date.

Job losses happen even without pandemics, and they aren’t the only reason retirement plans change. Other common issues that interfere with work include health problems or having to care for a loved one.

Sadly, around half of all current retirees ended up leaving work earlier than expected, and most were forced out for reasons beyond their control, not because they had met their savings goals ahead of schedule.

If you end up not being able to work despite planning to do so, this could necessitate claiming Social Security ahead of schedule and taking a financial hit. It could also mean your savings have to sustain you for more years than planned and you don’t have as much time to save. There’s often nothing you can do about this financial disaster once it happens.

Don’t end up without the income you need if you must retire ahead of schedule

If you plan for early retirement and end up being able to work longer, you haven’t lost out on much. Sure, you had to sacrifice a little to save up a bigger retirement nest egg. But you can enjoy that money in your later years. If on the other hand you save too little because you count on working for longer than you actually can, you’ll be in dire straits.

It’s always better to end up with too much money, rather than too little. So if you’ve set your retirement savings goals with the assumption of retiring late, it’s time to rework them. Do it before you’re forced into retirement with too little to sustain you.