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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75825  
Subject: Re: Unexpected Retirement/Investment Plan Change Date: 11/28/1999 8:28 PM
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I am working on a project for school to show the effect of unexpected early retirement on investing. An example, a 57-year old male is downsized out of his
position with a telecom giant after 30 years of service. He was planning on working until age 62. How will this unplanned for early retirement affect his
investment/retirement plans? What effect does it have on his asset mix? What changes need to be made? Any generic advice on risk, pensions, social security, stock
options, insurance, etc? Thanks!


The basic problem is that living expenses from 57 to 62 will have to come out of the investments he has. This means that this money will not be growing toward an age 62 retirement. Due to the time value of money this will have a big difference on the amount of money that can be spent each year in retirement. His standard of living will be much lower that if he had worked to 62.

Social security will be less when it starts since total earnings will be less.

Assume investments were in mostly stock and little cash. Now will need to build up cash reserve for several years of living expense. (Cash includes CD's, one or two year bonds etc.) However retirement could last 40 years so investments are still mostly in stock.

Need health insurance. COBERA will help. Gov insurance will start at 65.
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