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5 Reasons People Retire Unexpectedly Early

David Ning

Early retirement is the dream of many people working nine to five. But the reality is that a significant portion of the population will involuntarily retire early before the official retirement age. Here are five situations that could push you into retirement ahead of schedule:

Incur a disability. Disabilities can occur without warning. You need to prepare for the worst case scenario of becoming so ill that you cannot continue to work. While there is a safety net for people with disabilities, it's still going to be a devastating financial hit if you aren't prepared for it.

Caregiving responsibilities. Some people who are perfectly healthy may become unable to work because they need to care for family members. I recently learned of a husband who quit his job to take care of his wife after she was diagnosed with diabetes. He had a decent job, but the salary wasn't enough to justify him working full time while hiring full-time help to take care of his wife. And he didn't feel entirely comfortable leaving her with a stranger. At 62, he quit his job, even though he never envisioned quitting the workforce, let alone doing it early.

A once in-demand skill set could no longer be marketable. Legions of manufacturing workers are finding it tough to get a decent job, as companies are increasingly offloading manufacturing jobs overseas to cut costs. The business world is constantly evolving, and your skills may one day become obsolete. Though a complete lack of work is less likely, a more common scenario is that you just can't find a job that pays as much as you used to make, which hits many people's finances quite hard.

A layoff late in your career. It's not always easy to see the warning signs of layoffs before they happen. Job loss can be especially traumatic for older employees. It generally takes older workers much longer than young people to find a new job, and some people never end up landing a new gig. While there are things you can do while unemployed to boost your job prospects like volunteering or retraining for a new career, employers are sometimes reluctant to take on people they fear will retire soon. The best way to prepare for a late-career layoff is often to save as much as you can while you still have a job.

Successful businesses shut down all the time. A dangerously common situation among small business owners is living the high life while not saving for the future. Perhaps due to their risk-taking nature, many self-employed individuals believe they will be able to figure things out if times get tough. More often, the lack of savings will leave them struggling to make ends meet if the business fails, which happens all too often. You don't want to be forced to shut down your business because of the lack of a cash cushion.

No matter how successful your business or career is and how stable you believe your income to be, an unexpected twist could force you into retirement ahead of schedule. Saving more than you think you will need while you are employed will give you options if you encounter a health problem or job loss.

David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.

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