Wealth Column: Should your layoff become your retirement?
Looking ahead to retirement? The Wealth Column by Bruce Helmer and Peg Webb provides useful tips to financial planning to help people get there and consider options along the way whether retirement is imminent or still years away in their investing strategy.
The election is (mostly) behind us. The COVID-19 finish line appears to be on the horizon in the form of a vaccine. Unemployment is down, and it feels like we are starting to turn a corner. But this is still a recession, and for many, that means contending with job loss.
For those nearing the end of their career, being laid off presents a tricky set of questions. Should you jump back into the workforce or retire? Having a process in place to make that decision will help you make one in line with your financial goals.
Deal with the layoff itself
While losing your job can come as a shock, especially if it is unexpected, there are some immediate steps you should take. If your job loss is in the form of a forced early retirement, make sure you are receiving the same benefits as if you retired on your own terms.
When were you planning to retire?
From there, consider your situation in light of when you had planned to retire. If you are within a couple years of your planned retirement age, ask yourself some questions. Do you still love what you do? Are you passionate about your career? If not, and if you are in good financial shape, it might make sense to call it a career.
Talk it over with your significant other
If you have a significant other, there are a whole host of additional considerations. First, when do they plan retire, if they haven’t already? If you don’t know, now would be a good time to ask! You’ll be living off their income until they do.
Consider the impact on Social Security
If you haven’t started taking Social Security yet, see if you can afford to take your benefits sooner. Taking benefits sooner will permanently reduce your payout. If you are the higher earner, your spouse’s benefit may be based on your decision after you pass on.
It’s not a binary choice
Don’t feel forced into a choice about your decision one way or another. There is no law that says you must declare your retirement and can never work again.
Taking a year off to consider your options is perfectly acceptable, especially if you are concerned about being active during the pandemic. Maybe your skill set is conducive to consulting work, or maybe you can take a position with reduced hours. Retirement isn’t the either/or decision it used to be.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on News Radio 830 WCCO on Sunday mornings. Email Bruce and Peg at email@example.com. Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment adviser. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL.