Nearly half of all retirees had to leave the workforce early and for factors that were beyond their control, a survey by LIMRA has found.
LIMRA Retirement Research found that for 49 percent of retirees, their retirement date was dictated by job loss due to layoffs, employer buyouts, negative work environment or because of health issues. Only 45 percent of retirees said they retired when they planned, and 6 percent retired later than planned.
Retiring early can have a negative effect on a person’s standard of living. There are fewer years to earn and save money for retirement. In addition to the loss of a regular paycheck, early retirement also affects employer-provided benefits, such as health care coverage and retirement contributions.
If a person is too young when they are forced to retire, they may be too young to receive Social Security benefits or a reverse mortgage. They also are forced into making decisions they shouldn’t have had to make until they were much older.
Advisors who recommend to their clients steady systematic savings throughout one’s career can help them mitigate some of the risk. Because no one can predict retirement dates with perfect accuracy, early planning and preparation makes it less painful when someone is forced to leave the workforce earlier than they expected, according to LIMRA.
LIMRA’s research was based on a survey of 5,296 consumers, including 1,533 retirees, 1,391 pre-retirees, 955 late boomers and 1,417 people from Generation X and Generation Y.