Bob wasn’t planning on retiring until he turned 65. He enjoyed his work and co-workers, and his wife Jane was comfortable finishing her career at about the same time as Bob. However, Bob was unexpectedly presented with an early retirement “golden handshake” which would require him to retire now—at age 57.
Since Bob’s offer expired in 21 days, he had to make a decision fast. After discussing his options, Bob and Jane had more questions than answers: Could Bob really afford to take the offer? Would they be better off if Bob declined? What other factors should they consider?
Early retirement is a “compound” challenge. Retiring early means you have fewer years to accumulate assets, but will need those assets to stretch further and provide income for a longer period of time in retirement. Additionally, early retirement penalties, health care costs, decisions about when to begin taking Social Security and Jane’s ability to retire complicated the couple’s decision.