Early Retirement Options

Options with Early Retirement

The option of early retirement is something that’s becoming more common, even as people are living longer.  People are choosing to spend more time in their lives pursuing something other than careers and companies are looking at early retirement as an option to reduce the work force without resorting to layoffs.  If you’re trying to decide whether to take the option for early retirement, be sure to consider every side to the situation so you end up financially secure for years to come.

Of course, deciding whether or not to retire early is the end result of any questions you will have on this.  It depends heavily on your financial situation; if you don’t think you have the money to last you through the rest of your life, don’t take that option!  It would be horrible to be 70 or 80 years old and have to rejoin the workforce, or to be a financial burden on your family.

Should You Retire?

In some cases, though, while your employer may be presenting early retirement as an option, be aware of your company’s performance and determine whether or not offering early retirement is the option your employer is looking at before a round of layoffs.  If you feel that your company may be heading for layoffs, accept your early retirement, but take time to prepare. Requesting for a delay in time before you retire, can allow you time to save up extra money towards expenses or even to look for a new job. You can collect your retirement benefits from your old company while making money with the new.  Remember, a little preparation will go a long way!

Retirement Plans

If your company is offering you several different early retirement options, such as whether to receive your pension as a lump sum or an annuity, be sure to take a careful look at the pros and cons of each.  For instance, with a lump sum, you’re guaranteed to be able to leave whatever’s left to your family, while with an annuity, you have guaranteed income each year, no matter what.  Also, consider having some of your pension benefits rolled into an IRA fund, which will give you tax-free money when you’re over 59 years old. 

Your best bet is to talk over your early retirement options with a financial planner, who is trained in how to evaluate your needs through your retirement years and to help you plan for any snags that might happen along life’s road.  With a little planning and careful consideration, you’ll be able to wisely evaluate all of your early retirement options and live in comfort once you’re done working.

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