Move over Punxsutawney Phil, there’s a new groundhog in town! Boca Betty can use her groundhog powers to forecast whether you’re on track with your retirement plans. If Betty doesn’t see her shadow, that means you may be headed for an early retirement, but if she does, you might still have some work to do (literally!).
SO WHAT IS EARLY RETIREMENT?
Early retirement means retiring before the age of 65, and while the majority of Americans retire “early” at age 631, for nearly 80% of them, the cause was a health issue or layoff.2 If you are looking to retire early on purpose, you’ll need good planning and may want to seek the help of a financial professional to prepare you for the road ahead—whatever the weather.
While Betty’s shadow may be one indicator of retirement preparedness, there’s some more reliable advice on how to help set yourself up to retire early as well.
HAVE A WRITTEN FINANCIAL STRATEGY
A formal, written financial strategy is one of the best way to get on track for early retirement, live within your means and hold yourself financially accountable. Don’t have one? You’re not alone — only 37% of American workers do.3 Need a way to get started? Tools like a retirement planner can be a great way to open up conversations with your family and financial professional.
BE (OR BECOME) A WORLD-CLASS SAVER*
Only 41% of Americans have a least $1,000 in savings4, but most experts recommend much more: at least 20% of your income.5 For an early retirement, you’ll want as much money saved as possible.
SET UP OR MAINTAIN SOURCES OF GUARANTEED INCOME
Most retirees have at least one or two guaranteed income sources — Social Security and/or pension payments. But for an early retirement, additional sources may be necessary, such as annuities or whole life insurance that can provide continued support over time and in the event of risks such as health events and market fluctuations.
GET RID OF HIGH-INTEREST DEBT
High-interest debt (like credit cards) can be a drain on your savings and income — a major problem if you’re planning to retire early. The best plan is to avoid this debt in the first place, especially if early retirement is an aspiration.
WORK WITH A FINANCIAL PROFESSIONAL
With the guidance of a financial professional, retirees are able to prepare for and navigate retirement alongside someone they trust. Don’t go at it alone — finding a professional to walk with you through planning can help you avoid obstacles that might delay your retirement (and keep Betty’s shadow out of sight).
CONSIDER AN ACTIVE RETIREMENT
Nearly 40% of retirees plan to work in some capacity during retirement.6 Retirement work can range from part-time employment to consulting to starting a small business, and beyond, but if you plan to work after retiring from your main career, it can reduce your income and savings needs.
Retirement worries can feel like being trapped in a time loop — trying and retrying the same strategies, never sure we’re making progress. Need a dose of professional wisdom to break the cycle? Talk to a financial professional today.
Brought to you by The Guardian Network © 2020. The Guardian Life Insurance Company of America®, New York, NY Annuity and life insurance guarantees are backed exclusively by the strength and claims-paying ability of the issuing insurance company. While the primary purpose of life insurance is death benefit protection, it is important to understand the advantages that cash value accumulation can provide to clients, including supplemental income during retirement.
2021-115522 Exp. 1/2023
*A “World Class saver” is a person who saves at least 15 to 20% of gross income
1 Americans retire 8 years later than workers in China—here’s the retirement age around the world, CNBC, Aug 15, 2017.
2 Risks at Retirement, Living Confidently.
3 The Guardian Study of Financial and Emotional Confidence, 2017.
4 41% of Americans would be able to cover a $1,000 emergency with savings, CNBC, Jan. 22, 2020.
5 Personal savings statistics, Guardian Life.
6 The 2014 Guardian Small Business Owners Retirement Readiness Study.