No matter how organized you are, things don’t always go as planned when preparing for retirement. The truth is most people have to retire earlier than they had envisioned due to an unexpected event. It’s natural to feel a sense of apprehension and not have all the answers right away.
The good news is finding a clear path forward for you and your loved ones is closer than you think. And you know someone who likely has guided others in similar situations.
Time to pivot?
New or existing health impairments and disabilities are almost always accompanied by a variety of physical, emotional and financial costs – which too change over time. When preparing to adjust your plans, it’s vital to acknowledge these three costs to remain confident in your vision for retirement.
For example, changes to your physical health may mean that your close family members have to become caregivers and that your home environment has to adapt to accommodate mobility aids. More frequent healthcare visits coupled with a more limited ability to do the activities you once enjoyed can take a toll on your mental well-being and sense of purpose. It’s not uncommon for physical and mobility changes to bring emotional challenges for everyone affected.
In addition to physical and emotional challenges come a range of (sometimes unforeseen) financial costs. Medical services, mobility aids, prescription drugs and health insurance are all expenses that should be estimated for when rethinking retirement plans with your health requirements in mind.
While recalculating the financial costs of your retirement you should also note that, depending on the type of health condition and when you file for retirement benefits, you may qualify for disability benefits – otherwise known as Social Security Disability Insurance (SSDI).
You have the power to adjust your attitude, build resilience and actively strengthen your relationships to find the support you’re almost certainly going to need. To achieve this, consider:
- Focusing on the positives (and accepting the negatives). Take the time to make a list of the most meaningful things to your life and what brings you the greatest amount of purpose, enjoyment and satisfaction. This makes it far easier for you to recognize what’s most meaningful to you.
- Being flexible and remaining resolute. To strengthen your resilience, try putting your energy into practicing self-reflection, being mindful of what you still control in your everyday life, setting realistic goals and focusing on problem-solving rather than worrying about the problem itself.
- Cultivating your social circles. Social wealth in retirement comes with several benefits – reduced loneliness and an opportunity to continue sharpening your mind, to name just a few. Take the chance to rekindle old friendships and continue nurturing the relationships that matter most.
Switching Benefits
One fact to note is that you cannot collect both retirement benefits and SSDI from the Social Security Administration. If you filed, or plan to file, for early retirement benefits and then make the switch to SSDI and your disability application is approved, you should receive a higher benefit and a retroactive payment. However, it may not necessarily be your full retirement benefit.
Multiple factors affect the calculation when switching from retirement to disability benefits. Retirement benefits are based on your 35 highest-earning years, but if you’re disabled and have spent less time in work, your SSDI benefits are determined by your inflation-adjusted earnings from age 21 until the year your disability started.
If you filed for retirement benefits early, you may be able to switch to SSDI or receive a backdated payment, provided:
- You became disabled before you reached full retirement age (66 or 67 years old)
- You can prove your disability or health condition began before you took early retirement, i.e., evidence of a medical diagnosis from a doctor
- You learned that an existing condition qualified you for a higher disability benefit after filing for Social Security benefits
The advantage of determining your eligibility for SSDI is that you may qualify to receive a higher amount to help you pay for health or disability-related costs once you’re no longer working.
Retirement isn’t a one-off event. It’s an ever-evolving process with many layers and lots of moving parts. Give yourself time to figure things out and remember that you can always adjust your direction if needed.
Tom King CFP®, CLU®, AEP® is Registered Principal of King Financial Partners goKFP.com at 222 Blue Course Drive, State College, PA. King Financial is a team of credentialed professionals specializing in retirement, investment management, wealth transfer, and estate planning. Tom can be reached at Tom@goKFP.com (814) 234-3300.
Sources: Raymond James Insight and Commentary; Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC.© 2021 Raymond James Financial Services, Inc., member FINRA/SIPC.
Investment advisory services offered through Raymond James Financial Services Advisors, Inc. King Financial Partners is not a registered broker/dealer and is independent of Raymond James Financial Services.
