Many people have a pretty good idea of how long they want to work. You may even have a financial plan that assumes you’ll retire at a certain age. Yet more and more we hear of people being forced to retire. File it under “best laid plans…”

Did you know that almost half of current retirees ended up retiring earlier than they had planned? [See Employee Benefit Research Institute 2014 Retirement Confidence Survey.] Your retirement date could be moved up for a variety of reasons, including a health condition, layoffs, or caregiver responsibilities at home.

Anxiety and fear can cloud your thinking when you first learn you’ll be forced to retire earlier than you planned. Don’t make quick decisions in this emotional state – first take stock of your situation.

First take stock of your situation.

Figure out your monthly cash flow.

Where is your money going each month? Which expenses are fixed and which ones are extras that you could cut? A big consideration will be the cost of your health insurance. Possible sources of coverage: participating in your spouse’s plan, choosing the COBRA option under the plan at your last job, taking advantage of the healthcare exchanges created under the Affordable Care Act, or becoming eligible for Medicare at age 65.

Examine your savings, assets, and sources of income.

At first, you may be able to count on severance pay or unemployment benefits. If illness forces you to retire, you may be eligible for disability benefits.

But ultimately, most people will start to build their retirement plan on a foundation of payments from Social Security and company pensions. While these sources offer options for starting payments early, the monthly amount will be smaller. When you project that smaller monthly amount over the rest of your life, the loss can really add up. Consider your choices carefully.

Your third source of income in retirement is the potential investment return on your retirement savings. An online retirement calculator is a good place to start your planning, but you may want to visit a financial advisor for professional guidance and better confidence in your numbers.

Mind the gap.

Once you have a good idea of what will come in and go out each month, it will be easy to see whether you’ll come up short. You can consider a variety of ways to fill that gap:

• Get a new job: It may be difficult to match the pay and status of your previous job, but working through your feelings in advance could help you recognize a decent opportunity when it comes along.
• Find contract work: Many people are able to put their job skills, experience and professional contacts together to create a lucrative consulting business.
• Bring expenses down: Take a close look at your budget to see where you can trim. Vacations, new cars, dinners out, clothing, gifts and entertainment are all fair game.
• Move to a less-expensive home. This could lower your mortgage as well as bring down your taxes and insurance. It could also free up a chunk of equity with the potential to generate even more investment income for you.

 Take steps now so you’ll be ready.

Now that you can see what you have, where it’s going, and what you’ll need in the future, you can take practical steps to align your spending to your income. Start with an online retirement planning calculator, and consider talking with a financial advisor who can confirm your numbers and put your retirement options in the context of your goals and values.

Run a variety of retirement scenarios.

Choose an experienced advisor who has the knowledge and tools to run a variety of retirement scenarios so you can make an informed decision about your future. You may not have been planning to retire early, but you may find it opens up a fresh perspective on what retirement can be.

This material is for general information only and is not intended to provide specific advice or recommendations to any individual. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes.