Nahanni Akroyd

What are your options if you retire unexpectedly?

This may seem like an odd question, but sometimes older adults are laid off and need to weigh their options – look for work or retire.

What will your income look like? The important thing to remember is that there are no government pensions until you’re at least 60. You’ll want to gather your pension and investment statements, information about your Canada Pension Plan (CPP) entitlement (which you can begin collecting at age 60, unless you have survivor or disability payments) and information about your expenses. You may have a buyout from your employer and will want to decide how best to use it.

Working on your own or with a financial planner, you can create a budget. If you’re going to have an income shortfall, you may decide you need to take on a part-time job or spend less. If you’re over 65 and collecting Old Age Security (OAS), you’ll want to watch out for the OAS clawback if you have a higher income in retirement or the Guaranteed Income Supplement (GIS) for lower income seniors.

If you have a group benefits plan when you leave, you’ll likely have an opportunity to convert the group life insurance into your own life insurance with no medical tests. You may be able to keep the group health benefits, depending on your employer and their plan, or you can convert to your own plan.

If you retire unexpectedly, your financial options are often easier to figure out than what you’ll do with your time. Your friends or partner may still be working and you may be struggling with your self identity. Or, you may be very happy and fully embrace your early retirement - it is different for everyone. Try out new activities, or old activities that you haven’t done for a long time. Remember what you like to do. Summer is often an easier time to retire, as you may have had summer vacations and have a better idea of what to do on a day off in the summer. Soak in the opportunities and the sunshine!