You May Not Get to Choose When You Retire. Here’s How to Prepare

Unexpected early retirement, sequence of returns, inflation, and long-term-care costs can all disrupt your retirement plan, but you can prepare for them. During a panel discussion at the 2026 Morningstar Investment Conference, I talked about those retirement shocks with Dana Anspach of Sensible Money and Michael Finke of The American College of Financial Services.

Today’s excerpt from that panel focuses on planning for an unexpected early retirement.

Build a Retirement Plan That Can Withstand an Early Exit

Christine Benz: I did want to touch on this last shock that we wanted to discuss, which is unexpected early retirement. You have people retiring early for happy reasons because their portfolios are larger than they thought they would ever be. But Dana, I’m curious how much that has happened in your practice where people have been forced out of the workforce or maybe sort of subemployed for a period of years later in their careers and how you try to troubleshoot that with planning.

Dana Anspach: I’ve seen it happen both within our client base and with friends who maybe by choice left the workforce in their mid-50s, but then thinking they could easily get back in and are finding that it is not as easy as they thought. With clients, certainly, we’ve seen people get outsourced in their later 50s or early 60s when they had planned to work to 65, and we have to recalibrate, just like anything of a kind of look at how do we put all the pieces together, what is a sustainable retirement income from this point, and how do we regroup? What we try to do is stress-test the plan for an earlier retirement, say, “I know you think you’re going to work to 65, but let’s build everything as if you are done at 60 or 62.” If you save for and plan for that contingency and you get there and you work longer, great, that’s a better outcome than planning for the opposite event and being forced to recalibrate.

The Hidden Toll of Forced Early Retirement

Benz: Michael, how about you? What do the data say that there’s a disconnect between when people think they retire and when they actually do?

Michael Finke: Let me talk about two phenomena that I’ve seen in the data that are both worth talking about. The first is when you retire, if it was your choice, then there’s no difference in life satisfaction between before retirement and after retirement. In fact, you’re a little happier after retirement.

But if it was not your choice, if you were downsized, then there’s this big decrease in life satisfaction, and for men, it stays below where they were before retirement for four years; for women, for three years. Something to be aware of is that one of the big unknowns is: Can you choose your own retirement date, or is it going to get chosen for you? And if it’s going to get chosen for you, then that is a psychological shock that is going to last for a while, and even preparing yourself for that shock in advance can be very helpful at reducing the impact that it has because it’s a form of rejection.

You feel like your identity has been rejected; your sense of self-worth is being questioned. It’s a big impact. It’s not just a financial impact; it’s a psychological impact.

Let’s talk about the difference between when people say they’re going to retire and when they’re actually going to retire. There tends to be this magic year of 61. If you think you’re going to retire around 61, then you’re going to retire around 61. However, if you think that you’re going to retire at 65, then the difference between when you think you’re going to retire and when you actually retire is larger, and every year after the age of 65, that difference gets bigger.

In other words, if you tend to be very optimistic about how long you’re going to be able to work, you’re probably going to be disappointed, and very often, it’s not our choice. It’s a result of circumstance. It’s either our employer or health that’s going to dictate when we retire.

Valentina Djeljosevic contributed to this article.