Taking steps to prepare for an unexpected retirement

In my much younger days, I never planned to get married and certainly didn't plan to have children. The last thing I thought I would do was to stay home with them. Yet in my 30s, I found myself married, with children and no outside employment. It wasn't what I had planned, but it was the life I was living. When I re-entered the workforce, my goal was to make enough money to pay for child care, a chauffeur and a housekeeper. I could never find the chauffer.

Now that my husband and I are in our late 50s with children almost out of college, we look at our next phase in life. I don't plan on a traditional retirement. I love my work and have a significant amount of control over my hours and workload. My husband has been with his employer almost 37 years, and I would like for him to retire soon. He's not sure when he will retire. For the most part, he enjoys his work, except for the commute in the winter.

When do you think you will retire? According to a 2018 Gallup poll, workers between the ages of 50 and 64 expect to retire at age 67. This same poll found that 43% of retirees reported having to retire earlier than planned, and of those surveyed, the average age at retirement was 61.

There are a variety of reasons for exiting the workforce early. The most common reasons are for health problems, either the retiree's own or those of a loved one the retiree must care for. Other people are forced into retirement due to a job loss and have difficulty finding new employment.

According to an article by GoBankingRates, a comfortable retirement in Indiana costs around $56,000 a year, making Indiana the seventh-cheapest state to retire in in the United States.

Depending on life expectancy, retirement income and investment returns, you will need $1.1 million to $1.3 million if you retire at 67.

Retiring at 61 increases the recommended amount by $300,000 to $400,000. Your expenses will be higher or lower than the average and your retirement might last more or less than 20 years.

You can take several steps now to prepare yourself for an unexpected exit from the workforce. You can pay attention to current spending, work to eliminate debt, including the mortgage, and increase your emergency-fund savings to 12 or more months of expenses.

If you are eligible to contribute to a health savings account, put in as much as you can and don't touch it until after retirement. While you are working, plan to pay for routine medical expenses out of pocket, allowing the HSA to grow.

For most of us, our spending level during our working years will not be sustainable in retirement, and we will need to adjust our spending accordingly.

One of the first couples I worked with are my poster couple for the benefits of retirement planning. They had a disagreement about whether he could retire. During the planning process, we decided on an amount they could spend monthly if he were to retire today.

Their "homework" was to live on that amount for six months. This enabled the couple to test this standard of living, reduce accumulated debt, and save additional funds for retirement.

During this six-month trial, his job responsibilities shifted, allowing him to comfortably work for a few extra years. They didn't even notice they were spending less and found more enjoyment in life.

The choice is to adjust gradually with the added benefit of increasing savings or take no action and make adjustments once the money is gone and options are limited·

Hahn is a certified financial planner and owner of WWA Planning and Investments. She can be reached at 812-379-1120 or jalene@ wwafp.com.