Will you be “shocked” into early retirement?


Image: Andrey Popov/ Bigstock.com

What could cause you to retire early? Four major ‘shocks’ have been found to cause early retirement for about a third (37%) of retirees according to Boston College’s Center for Retirement Research.

The four are: health; employment; family; and financial. That doesn’t mean there aren’t other reasons, but these four were, statistically, way out in front.

1. Health shock

Poor health is by far the most common cause of early retirement, and it comes in two forms. The first is when an individual has an existing health condition—arthritis, for instance—and discovers how much it limits their ability to work. This can force them to retire before they’d planned

The other form comes when someone’s health changes so dramatically that they have to retire before their planned retirement date.

2. Employment shock

This shock comes in changes under three circumstances. This can happen when individuals change their employment. While this may be a positive move, it can also bring the retirement day forward. As does job loss followed by another job. Finally, there’s job loss without another job, which is more likely than the others to lead to early retirement.

It seems that sometimes just a change can make people nearing retirement think more seriously about retiring.

3. Family shock

These shocks can come in changes to: a spouse’s employment or retirement; spouse health; marital status; children living at home; a first grandchild; caring for a parent; and a parent moving into the home of those who are themselves heading toward retirement.

This is a broad list, but the evidence is that any of these instances can lead to early retirement.

4. Financial shock

This is defined simply as ‘large fluctuations in a person’s wealth’. The interesting thing about this is that a wealth gain of 50% or a wealth loss of 50% both saw more individuals retire (although 25% fewer of those with the financial loss). It’s easy to understand why those who had a financial gain would choose to retire early, but not for those with the loss.

The importance of what’s important

Health; employment; family; and finances. They’re all important to life, but they can also impact on the kind of retirement we’re able to create.

But this research also points out the most significant problem causing early retirement—poor health. It’s a reminder (again) that we should look after our health. It’s key for a good retirement. And a good life.

Let’s take this as a warning to take our health seriously. Perhaps it could start by checking out this post to help improve our health and life span. Or we could turn that intention of a healthy lifestyle into a reality. Starting now!

Health should have a priority in life, and especially as we approach retirement. It’s important.

Bruce Manners: the author of Retirement Ready?, Refusing to Retire, and founder of RetireNotes.com



Category: Early retirement, Lifestyle, Physical Health

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