Source: 2009 Retirement Confidence Survey

When do you plan on retiring?

Regardless of your answer, chances are high that you’ll retire sooner than you think you will…ready or not.

In fact, the chart to your right gives you some very important information.

It shows that most folks retire well before they planned to.

Why do people retire prematurely?

It would be nice if people retired earlier than expected because they reached their financial goals surprisingly early. But…eh….no.  That’s not the reason.

Most people leave work earlier than expected for some negative reason and it’s usually because of a health related issue.

I don’t know about you but this is something I hadn’t even considered before and this fact comes at an especially bad time.

As a result of the market downturn most people plan on working a few years longer than usual.  But in reality, we may be forced to exit the workforce sooner than we expect.  In fact, while 77% of workers plan to retire at age 65 or later, 72% actually retire before reaching age 65.

How can you use this data?

1.  Don’t panic.

It won’t help if you start worrying about this.  In fact, in may make the situation worse.  Stress and anxiety is a major contributor to poor health. There are plenty of action steps you can take.

2.  Create Plan B.

It’s time to think about how you would manage financially if you have to exit the work force sooner than expected. Amend your financial plan to deal with this contingency. If you don’t have a financial plan……now might be a good time  to get one.

According to the chart above, you have a 30% chance that you’ll have to stop working by age 60 and as I said above, a 72% chance you’ll retire prior to age 65.  It would be silly to ignore that.  How would you deal with that if it became your reality?

3. Track your average monthly spending.

I’ve written about this extensively but it’s even more important to track your expenses in light of this reality.  If you’re a subscriber, you have my white paper on how to track your spending in 5 minutes each month.  Make sure you do this every month.  If nothing else, you’ll know what it costs you to live so you’ll know how much income you will need when you do retire. Don’t wait to start this.

4. Stay healthy.

You might hate exercising but if you want to reduce your financial stress and prolong your ability to work, an investment in your health is the best thing you could do.  Clearly, you should consult a doctor before you begin any exercise program but you should start investigating this subject asap – regardless of your age. Oh….and after you are through investigating…..get going.

Will these steps guarantee that your retirement will be smooth sailing?  No.  But by taking the action I outline above, you’ll be doing everything you can to make sure you work as long as you want to.  You’ll also be ready if your plans are forced to take a detour.

The financial world has shifted for many of us over the last year.  That doesn’t mean we have to become victims.  Plan ahead, track your monthly expenses and exercise.  These are the best steps you can take to make sure life doesn’t throw you an unwelcome surprise – like early retirement.

Now….drop and give me 20!

Like this article? You will love getting my free brilliant financial updates! No spam, and I won't give your email address to any other person or company.That's a personal promise. Neal Frankle, Certified Financial Planner, Los Angeles, California

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