Retiring Early During a Global Pandemic
Retiring early during global pandemic, in your 50s or early 60s, might seem foolish. But if you have a job that can’t be done safely retiring early might seem more enticing.
According to the Federal Reserve Bank of St. Louis, older Americans have more jobs that carry high economic and health risks. The COVID-19 recession put nearly one-third of workers older than age 50 at greater risk of becoming unemployed. And these workers are at greater risk of becoming sick or dying from the coronavirus. (1) High-risk occupations include jobs essential to public health or safety — such as law enforcement, first responders and front-line health care workers — as well as educators and people working in service and sales-related jobs.
If You Plan on Retiring Early
How will you get health insurance?
Starting with, how to pay for health insurance. If you leave a job before you are eligible for Medicare coverage at age 65, you’ll need to figure that out. You can stay on your employer’s plan for at least 18 months under COBRA; which can get expensive. Another option is to join the group health plan of a spouse who is still working.
What are the implications for Social Security?
Second, think about the implications for social security. Unfortunately, taking benefits before you reach full retirement age reduces the monthly payments you’ll receive over your lifetime. For example, if you take Social Security at age 62 when your full retirement age is 67, you can expect to receive about a 30% lower monthly benefit than if you had waited to start collecting payments at your full retirement age
Can you afford to stop working?
Lastly, consider if you can afford to stop working. To begin with, look at your overall savings, including streams of guaranteed income such as pensions, insurance policies, Social Security or other financial resources. Next, consider ways to reduce expenses. Be sure not to underestimate how much you plan to shop, eat out or travel in retirement — those costs can add up fast. Your main goal is to figure out if you can pay for daily living expenses without drawing from retirement savings for as long as possible.
Ready to Take The Next Step?
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