The 3 Solutions To Retiring Too Early

This article was originally published by Stacy Ployhar at 2020 Financial Planning LLC.

Sometimes a person thinks they are able to retire early. Other times they are ‘pushed out’ of their job or career. Either way, if they have not done prudent planning to mitigate for inflation, their retirement can go sideways super fast. Here are 3 solutions to facing a situation of running out of money.

  1. Get a part time or gig job: This doesn’t necessarily mean being a Wal-Mart greeter. There are all kinds of work to choose from now, especially with a tight labor market. Many employers of these part time jobs prefer an older worker, because older workers can be more reliable. There are also many employers that are able to work around your schedule.
  2. Streamline your lifestyle: Do you know where your money is going? If not, time to find out. Are each of the expenses adding quality to your life? If not, why are you spending money on it/them? Low hanging fruit tends to be eating out and groceries. This isn’t to advocate for buying poor quality food. Quite the opposite. It’s to shed light on shifting away from packaged food to perhaps getting creative about making meals from scratch (if you aren’t already).
  3. Review your portfolio: Is your portfolio growth able to exceed the growth of inflation? You need to stay true to yourself here. If you are unable to take on more risk with your portfolio, then you perhaps would only sabotage yourself by taking on risk that would keep you up at night during times of volatility. There is a tradeoff: Would you rather lose sleep over watching your purchasing power erode year after year because your portfolio can’t keep up, or are you willing to take on more risk knowing that there will be bumps in the road for taking on a little more risk?

What else can you do? While a degree of adopting all 3 of these to some degree will get you to a higher likelihood of not running out of money, you may want to first make sure your perspective on recent portfolio changes is accurate.

Working with a Fee Only CERTIFIED FINANCIAL PLANNER ™ will reap peace of mind that you are on the optimal path to having the type of retirement you want.

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