If you’re due to retire soon, it would be understandable if you’re feeling a bit nervous about the uncertain state of the economy. And that’s precisely the reason some would-be retirees decide to postpone their retirement dates and continue to wait and save.
But what if you can’t wait, or a health or other issue forces you to retire now? It’s not the end of the world. With a bit more attention to detail and some expert guidance, you can still retire during uncertain economic times.
Meet with an advisor. Always meet with a retirement advisor before retiring, rather than after. We can help you assess your portfolio and savings, review your budget, and make certain decisions that can help set you up for long-term success.
Consider your options for withdrawals. You don’t want to feel forced to sell off assets when they’re undervalued; that feels like throwing money away. During an economic downturn, we of course hold out hope (and we’re usually right to do so) that an asset will rebound. So, we should help you structure your withdrawals to focus on certain assets during the downturn, giving others a chance to regain some or all of their former value.
Take advantage of catch-up contributions. If you’re not due to retire just yet, but feel retirement might arrive sooner than expected, start taking advantage of opportunities to make catch-up contributions to your retirement fund(s). You can contribute an additional $6,500 each year to your 401(k) after age 50, and an additional $1,000 to IRAs after the same age. And if you don’t have an IRA? Maybe it’s time to open one.
Consider your other options. Some retirees are discovering the ease of semi-retiring, by cutting back on work hours while remaining employed at least half-time. Another option is to retire from your primary career but continue part-time work as a consultant. If commuting is the main complication, talk to your boss about working from home at least part of the time. Or retire from a demanding career but take up easier, more enjoyable part-time work to earn extra income.
Retirement isn’t always about abruptly stopping work; sometimes, a more creative approach allows you to continue earning while reducing your mental and physical workload.
If you’re concerned about the possibility of retiring during a downturn in the economy, give us a call. We can review the above options, plus others of which you might not even be aware.