If you’re among the many older workers who may be looking at an early retirement due to the economic fallout caused by the COVID-19 pandemic, you’re not alone.
- If retirement comes earlier than you thought, smart planning is a must.
- Taking the right steps now can pay off over the long run.
- By minimizing taxes, a nest egg can last longer.
If you’re among the many older workers who may be looking at an early retirement due to the economic fallout caused by the COVID-19 pandemic, you’re not alone. From March to August of 2020, 2.9 million Americans ages 55 to 70, or about 7% of the workers in that age group, lost their jobs and left the labor force.1
Many of these individuals will be forced into early retirement, which could have severe consequences for their long-term retirement security. Early retirees lose not only wages, but also the chance to make additional contributions to their workplace retirement savings plan, and lose any future employer matching contributions they would have received. Historically low interest rates will also create significant challenges for anyone looking to generate retirement income with their savings.
Overcoming those challenges – or at least mitigating their impact – will require thoughtful execution of smart financial planning strategies. Planning for Retirement: What to Do if it Comes Early outlines nine steps to consider taking if you’ve recently been laid off or have received notice that you will be laid off, and as a result may be considering retiring earlier than planned.
Prudential served as the exclusive sponsor of the National Retirement Risk Index.
1The New School Retirement Equity Lab, “Status of Older Workers,” August 2020.
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