4 Things to Consider Before Your Clients Retire Early

By August 24, 2021 September 1st, 2021 No Comments

The unusual circumstances of the pandemic have created a tough environment that has driven many Americans into early retirement. More than a quarter of all workers have reported that the global health crisis has prompted them to move up their retirement date, according to a recent survey by the National Institute for Retirement Security. In return, nearly two-thirds (65%) of financial professionals have had to change their approach to retirement planning over the past year.

So, whether your clients are forced into early retirement or choosing to hang up working full time, here are four actions to have them take.

Prepare a retirement budget. Designing a budget can help them plan how their money will be spent and you can update it as necessary to accommodate any changes in their financial situation. Remember to have them take into consideration a budget that lasts throughout retirement. Thankfully, there are many free, personal finance tools and software available online to help your clients plan, track, and manage their funds. One place to start is the Alliance for Lifetime Income’s free RISE Score® calculator to assess what the risk might be of having a gap in their monthly income.

Identify their retirement income sources. Learn what their potential or anticipated sources of income (Social Security, pensions, annuities, distributions from personal investments, and savings) are to help ensure they have the protected income they will need in their retirement years. Protected income – income they are guaranteed to receive – is a great way to cover their essential monthly expenses in retirement. An annuity is a form of protected income that can help give them peace of mind by providing a steady and regular stream of income they can count on for their entire life. There are a variety of other annuity options available – including immediate and deferred annuities – so talk to Mike Van Horn to help determine what’s right for your clients.

Take health insurance into account. If they retire before age 65, they won’t yet be eligible for Medicare, so health insurance costs should be an important consideration when creating their financial plan for retirement. If they have a spouse who is still working, they may be able to tap into their healthcare coverage. Otherwise, they may want to look into other options, like COBRA, Medicaid, private health insurance, or their state’s health insurance marketplace. The Alliance offers a few simple tips on how to address and plan for healthcare expenses in retirement.

If they are offered an early retirement package, have them do their homework before saying yes. Their severance package should ideally offer enough cash to cover several months – or more – of their current paycheck. For example, if they earned $300,000 annually in pay, a package should ideally offer up at least six months of pay ($150,000) to make it worth their while. Ensure that they will be better off financially if they accept the package and that it keeps their financial plans on track. Many packages are also negotiable to a certain extent, so they need to be sure they fully understand their options, and decide what is most important to them and ask for it.


Contact Mike Van Horn, our Director of Annuity Marketing at 877.455.0119 x226 or by email at You can also schedule a meeting.

Article from the Alliance for Lifetime Income | Protected Lifetime Income

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