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Illnesses and health conditions are the reasons many seniors take early retirement. Whether they are physical, like MS, or mentally crippling conditions like depression or Alzheimer’s, illnesses that manifest during early or middle old age can have a big impact on quality of life. For many, choosing to retire simply isn’t a financial option, but their health demands that they take leave from work. Let’s look at some things seniors should think about when considering to retire due to an illness.
Whether suddenly impacted by an illness, or experiencing onset symptoms of an illness or medical condition over time, seniors forced out of the workforce by illness need options. Regardless of the situation, employers are legally required to make reasonable adjustments so that their employees with illnesses are accommodated. Further, FMLA provides those with certain illnesses the right to time off work without penalty. Some choose to work a more flexible schedule—or even part-time—if possible. Instead of basing your decision solely on the financial implications, consider all aspects of your wellness. Sometimes taking voluntary redundancy is the right option for your quality of life. A clear advantage of taking redundancy is that it would come with redundancy pay, which might make the decision to retire early easier.
Whether an illness is present or not, most working seniors are already thinking about retirement. In most cases, seniors must wait until they are at least 62 before they can start claiming their pension—but those retiring due to a medical illness or condition may be able to access it earlier. One downside to retiring and claiming your pension early is that it won’t have as much time to grow as it would if you worked longer. However, when health is at risk, most don’t have much of an option.
Every pension has its own details and definitions, so it’s important that you work out exactly what your retirement funds will look like. Start this process by finding out what your pension provider’s rules are surrounding ill-health and taking your pension early. Find out how much the pension is worth and how much income your pension sum can buy. In many cases, ill-health allows the pension holder to get an increased income—known as an enhanced income.
After you’ve reviewed your financial situation, it’s a good practice to create a retirement budget in order to make sure that your retirement funds and income will be sufficient in covering all costs.
Of course, in the case of illness even the support of a pension and partial income might not be enough to cover expenses. Many seniors might not be aware that they have options available for them to increase their retirement funds. One option is selling a life insurance policy through a life settlement. For more information on life settlements, visit our website today!