FINANCIAL FOCUS
KRISTI TREVINO
Financial Advisor
Edward Jones
www.edwardjones.com/kristi-trevino
What Does an Unplanned
Career Transition Mean for You?
The COVID-19 pandemic has unsettled the
country’s employment picture for months
and will likely continue to do so for a while.
However, the nature and terminology of this
disruption varies greatly among individuals –
some have seen their jobs disappear, others have been
“furloughed” and still others have been offered an early
retirement. If you’re in this final group – those either
offered, or feeling forced to accept, an early retirement,
how should you respond?
Try to look at your situation holistically, rather than
strictly in a short-term manner. Consider these four
areas:
• Retirement – What does retirement really look like to
you? Are you ready to fully retire or would you like
to work part time? Are you confident that you can
work somewhere else for a few years before retiring
on your own terms? If you’re not certain you can
work elsewhere, how can you adjust your desired
retirement lifestyle – what you planned to do, where
you hoped to live, etc. – to meet your new reality?
• Income – Just how financially affected you’ll be from
an early retirement depends on several factors: how
much you’ve already saved and invested, whether
you’re married and have a working spouse, whether
you’ve paid off your mortgage, and so on. In any
case, though, you’ll need to answer several questions,
including these: Do I need to start taking withdrawals
from my IRA and 401(k)? If so, how much can I afford
to take out each year without running the risk of
outliving my resources? Should I adjust my current
investment mix? If I haven’t yet started collecting
Social Security, should I do so now, or can I afford to
wait until my monthly payments will be bigger? Are
there any other sources of income I can leverage?
You may want to work with a financial professional to
address these and other key income-related issues.
• Insurance – If you received health insurance through
your employer, an early retirement could present
you with a dilemma, especially if you’re not quite
old enough for Medicare. You might be eligible for
COBRA, which provides ex-employees and their
dependents the option of continued health insurance
for potentially up to 36 months, but this coverage can
be expensive. As an alternative, you might be able
to negotiate an extended severance package, which
could provide you with health insurance for several
months. Or, you might be able to get on the health
insurance plan of your working spouse.
• Legacy – Many people want to take care of their
family while they’re alive – and leave something
behind when they’re gone. If you take an early
retirement, you might lose your employer’s group life
insurance. Of course, if this plan was not sufficient,
you may have already supplemented it with your
own policy, but, if you haven’t, you may need to shop
around for some coverage, particularly if you have
children still at home. You also may want to take this
opportunity to review your key financial accounts
to make sure your beneficiary designations still
accurately reflect your wishes.
Going through an unplanned career transition is
certainly challenging. But looking closely at the four
areas describe above, and making the appropriate
moves, may help you reduce some of the stress and can
put you in a better position to start the next phase of
your life.
This article was written by Edward Jones for use by your local
Edward Jones Financial Advisor Edward Jones. Member SIPC.
12 MOMENTUM