Is early retirement on the table?

A primera vista, la oferta parece muy atractiva. Su compañía le presenta un paquete de retiro anticipado que ofrece una buena suma de dinero e incluye una asignación para su seguro de salud. It may be part of your company's effort to address the side effects of inflation or increasing costs due to tariffs by reducing payroll expenses.

But experts caution those considering an early retirement package carefully. Bowing out 10 years early could put a strain on your nest egg, so it better be sizeable if you choose to take the leap, said Brendan Burke, a financial planner at BOK Financial®.

"First you need to look at the assets you have currently. See what's set aside for near-term as well as long-term expenses and be aware you'll be speeding up the depletion of your assets by retiring early versus allowing them to grow for a few more years," said Burke.

There is much to consider: the financial implications, certainly; but also, the impact of early retirement on your lifestyle.

El dinero es importante
El lado financiero de la decisión va más allá de sumar los saldos de su plan 401(k) y su cuenta de retiro individual (IRA), dividirlos por la cantidad de años que espera vivir de esos fondos, por ejemplo 30 años, y decidirse por sí o por no. A comprehensive financial plan begins with a clear understanding of where you stand.

“You need to figure out what your current budget is,” said Burke. “Discretionary expenses, like dining out and traveling, can be adjusted to help meet your goal if it's looking thin.”

That could mean a sober assessment of how your spending will change in retirement. Visions of travel, hobbies, shopping and regularly dining out are common, but prone to underestimation in terms of costs, especially if you start spending from your retirement account earlier than planned.

"It could be a poor decision to start tapping your assets early," Burke said. "But if you have cash in a bank account or a brokerage account, you could use that to avoid touching the IRA accounts. You want to at least get past the penalty period of those retirement accounts before you withdraw from them."

He also recommends working with a financial planner to determine where to start pulling from a tax-efficiency standpoint.

“Most importantly, you need to ensure that your money is going to last through your remaining life of non-working years,” he said.

Más de lo que tiene ahorrado
Burke cites three ways an early retirement may impact your financial plan more than you think:

1. Tenga en cuenta que ya no podrá contribuir a sus ahorros; es decir, perderá esos dólares junto con las ganancias compuestas derivadas de esos ahorros.
2. Así comenzará a agotar sus ahorros y necesitará cubrir más años de retiro, pero tendrá menos ahorros para hacerlo.
3. Sus beneficios del seguro social podrían verse reducidos, ya que se asume que trabajará en forma continua hasta la edad de retiro, que puede ser  hasta los 67 años. Los años en los que no tenga ingresos podrían reducir sus beneficios, al igual que usarlos antes de cumplir la edad estimada de retiro.

El deterioro acelerado de sus ahorros no será la única sorpresa posible que tendrá si decide retirarse antes. El seguro de salud es otro riesgo.

"There's definitely the hidden cost of early retirement if you're exiting the workforce prior to being on Medicare," said Burke. "It's a staggering amount that has to come out of savings to just get the bare minimum amount of healthcare coverage. And after that, Medicare also has expenses that need to be factored in."

When you work full-time, many employers cover an average of 85% of premiums for individual coverage and 73% of family coverage, according to WellHub. Hasta poder obtener la cobertura de Medicare a los 65 años de edad, los individuos retirados deben cubrir el total de la prima. Company rates extended through COBRA-the health insurance program that allows eligible employees and their dependents to continue benefits after leaving an employer—run high, too.

Finding another job
If you’re considering picking up another job, either full or part-time, to keep money coming in before you start to spend down retirement savings, you may want to do that sooner than later.

“It’s hard to get back on your feet and start from scratch after you've already exited the workforce and then try and re-enter a couple years down the road,” cautions Burke, adding there may also the unspoken hiring bias of ageism that could make it difficult to prove your skills and energy are able to take on a new role.

If that’s not enough to worry about, check your employer’s severance agreement. They may have included a non-compete clause—which could be a concern if you’re considering working for another employer or starting your own business in the same industry you were working in.

Know your numbers
Burke suggests working with a financial professional to run the numbers to see where you stand before making such a big decision.

"More and more people are aware of how quickly they could lose their job. When I run financial plans, if the client may be at risk of losing a job, I might suggest they spend a little less," said Burke. "They might also want to find a part-time job for salary replacement of at least 50% just to help bridge the gap for those additional working years to help get closer to the goal they have for retirement."

When you strategize options, you may find you don't need to fully replace your salary. But if you can pull in a certain amount of money, it's going to go a long way in helping you to keep your retirement account invested and growing in order to still have that retirement lifestyle you were dreaming about prior to losing your job.