Has the Pandemic Forced You Into Early Retirement? - Slimmer Payments

Has the Pandemic Forced You Into Early Retirement?

All of the cutbacks, furloughs, and layoffs due to the COVID-19 pandemic have forced many Americans into early retirement. Were you one of them?

When retirement is suddenly thrust upon you sooner than you may have planned for, it could cause some financial burdens. Here are some tips to help manage a retirement that may have come sooner than you thought.

Find Positive Ways to Fill Your Time

When you had an anticipated retirement date, you may have had many plans for how to spend your free time. However, when you are suddenly out of work during a time in your life when you still expected to be going into the office every day, all of that free time can be a bit maddening. Find some positive ways to fill it – volunteer, take some classes you always wanted to, find some new hobbies.

Prepare to Deal With Increased Healthcare Costs

If you’ve been forced to retire before 65, you will not have Medicare coverage you were relying on for retirement. If your employer asked you to retire early due to the pandemic, request some subsidized health insurance coverage or “gap coverage”. Otherwise, you should prepare to pay what could be several thousand dollars or more in annual health insurance premiums and out-of-pocket costs.

Consider Part Time Employment

It can be advantageous — emotionally as well as financially — to work part-time after you retire. You will generate extra income and possibly nurture social interactions, and stay sharp mentally. The problem is that you might not find the right part-time work, especially during the current period of elevated unemployment. Keep in mind however, that part-time work can be an issue if you have started to receive Social Security retirement benefits. If you’re taking Social Security early and working part-time, you might need to return some of the Social Security income.

Claiming Social Security Benefits

If you have had to retire early, it is best to hold off on claiming your Social Security Benefits until you are 70 if you can. That’s the age when monthly benefits are at their highest. But they also will gradually increase the longer you hold out past 62, when you can initially claim Social Security.

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