5 Money Steps to Take if You're Forced to Retire Early

Priority Money Moves if Your Career Is Ending

Middle-aged woman with curly hair sitting on window-seat cushion with tea mug looking out a window.

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Are you considering early retirement? Perhaps now is the right time to retire—even if it’s years earlier than you initially expected. 

If you’ve been forced to stop working due to a layoff, business closure, or something else, you’ll need to make sure your finances are in order before officially retiring early. Here’s what you need to do.

Evaluate Your Assets

First, take inventory of everything you own, like your home, vehicles, and any expensive collections, like art or jewelry. Also take a look at your investment accounts, such as your employer-sponsored 401(k), personal IRA, and other investment accounts.

Another option if your income has dropped or dried up is to start claiming Social Security benefits as early as age 62. Your Social Security benefits will increase as you approach age 70. If you absolutely need the money now, take advantage of the opportunity. However, if you can wait, you’ll get a larger payout.

It’s important to take a look at all your assets—including cash on hand—to see if you’re financially able to retire right now and how long your money will realistically last. If you don’t have enough money to lead a comfortable life in retirement, possibly for decades, you might need to find some additional income elsewhere.

Talk to a Financial Expert 

Getting in touch with a financial planner or advisor about your options is an important step. If you aren’t sure if you have enough reliable income to last throughout retirement—like from your retirement and savings accounts, for example—a financial expert can help you understand what you need to do to retire right now. For instance, what are your monthly financial responsibilities? Can you lower costs in some areas so you’re only paying for what’s absolutely necessary? An expert can help you figure that out. 

Certified financial planners (CFPs) are helpful, but you can also chat with a tax preparer, financial advisor, or another money professional.

Downsize Your Living Space

Sometimes larger items in your life might need to go as you learn to economize and adapt to a new income level. If you have extra space, consider selling your home and moving to a smaller house or apartment, or moving to a less-expensive area, if possible. The median mortgage payment in the U.S. in 2019 was $1,200, so if you can’t move, consider bringing in friends or family to help keep home costs low. Even if they contribute just a little every month, that can reduce what you have to pay out of pocket. If you can decrease the amount you spend on housing costs per month, you may be able to allocate that money elsewhere.

Additionally, if you don’t think you’ll need to leave your home as often as you used to, you may want to consider selling a vehicle to eliminate a loan or insurance payment. 

You can also sell things you don’t need. For instance, if you have a car, motorcycle, and boat, you may want to sell the ones that aren’t necessities. If you can’t, consider splitting use and payments with a friend or relative.


Downsizing your space means that less money goes toward a home payment or rent, allowing you to stretch your dollars even further in retirement.

Look for Part-Time Work

If you can’t find a full-time job in your field, consider part-time work. Whether it’s in your industry or not, part-time work can help keep you afloat as you wait until other income streams start, like retirement distributions or Social Security benefits.

If you’re healthy and feel comfortable, you can also start working at a currently in-demand job, including as an essential worker, since companies are actively hiring for those roles during the pandemic. For instance, you could look into meal or Amazon delivery, grocery services, or rideshare services. Many of these jobs let you work as much or as little as you’d like, tailored to your schedule. Even if you do pick up full-time work again, you don’t have to give up your part-time job right away, especially if you’re earning less in the new job than you were before.


If you have a side hustle that you formerly conducted in addition to your full-time job, it might be time to elevate it into your new full-time gig.

Turn Your Hobby Into a Money Maker

What do you do when you’re not working that you’d like to be doing more of? Are you into graphic design, building websites, or making crafts for your friends and family? Do you have any caregiver skills, whether for children or the elderly, that you can offer to those in need? You can turn your hobby into a side hustle—or even your full-time occupation—if you’re looking for an alternative income stream. Websites like Fiverr, Etsy, and Care.com may make it easier than you think.


If you do need a little extra income, but have already begun collecting your Social Security benefits, it’s important to be aware of the amount you can earn per year while collecting Social Security

The Bottom Line

If you’re facing an early retirement before you think you’re ready, take a little time to evaluate your finances. If you have enough cash on hand and can find a side hustle or downsize your living space, you might be able to survive longer financially without returning to work. But if you can’t cover your expenses, you may want to consider searching for a new job and putting off retirement for a few more years if possible.

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  1. Social Security Administration. "Retirement Benefits."

  2. U.S. Census Bureau. "American Housing Survey."

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