For many people, there are many different things that can occur with your financial situation and can leave you dealing with a difficult situation such as a forced retirement. Having a forced retirement can be traumatic and difficult to deal with. Many baby boomers are in the situation where they are being forced into retirement, which can be hard to deal with. This means that you are no longer adding to your income and you are being forced to live off what you have hopefully been diligent about saving. Almost half of all people that are retired have stated that they did not want to retire when they were forced to. How can you prepare yourself for a forced retirement? Here are some tips to help you out!
Tip # 1 – Save when you are young
You need to be able to save money when you are earning it. If you are forced to retire by 55, you will be thankful that you were diligent in saving 10% of your income where you were in your 20s and 30s. Always have a retirement in place that you are regularly contributing to. In addition to something like a Roth IRA, you also need to be able to set aside money to a savings account. Plan on saving up at least 6 months of your income or more to be sure that you will have plenty of money to live on if you need it.
Tip # 2 – Pay off your mortgage
To prepare yourself for serious financial issues like health problems or an early retirement is to focus on paying off your mortgage when you are younger. Paying off your mortgage in 15 years versus 20 or 30 will allow you to save a lot of money. It gives you a chance to save money and will make it easier to help you be prepared for the event that you have to retire earlier.
Tip # 3 – Apply for Social Security
It is also a good idea to apply for Social Security. This will help you in being able to pay off your debts if you have any when you retire. Just check on early Social Security and if this is something that you need to apply for or not. In some cases you can still work when you apply for Social Security. You may not be able to get as high of an amount.
Meet with a financial advisor in order to know that you are getting the best option to help you manage your money. Dealing with a forced retirement is not a fun process but it is something that can be taken care of as long as you are able to understand how to manage your money wisely when you are younger.
