How can advisers help prepare a client for an unexpected early retirement?

Sarah Wotherspoon, CFP and a principal of San Rafael, Calif.-based firm Private Ocean, had a client in her early 60s who was offered early retirement in 2014.

“We plugged her severance/retirement package into her financial model and concluded that she could retire at that time, which is what she ultimately chose to do,” Wotherspoon says.

If retiring early isn’t financially do-able, Wotherspoon often advises clients to find other kinds of work, including consulting.

She also revisits clients’ financial models to determine what other financial adjustments they can make, such as spending less or downsizing their home, to be on a sustainable path.

Catherine Seeber, CFP, partner and senior adviser at Wescott Financial Advisory Group in Philadelphia, recommends that clients “remain relevant” in their careers to reduce the odds of having to retire early.

“Not only will that assist you in your current position, lessening the chance that you'll be the first to go, but it will increase your marketability for another position or company,” she says.

For clients who work in cyclical industries or those prone to downsizing and layoffs, setting a target to have 12 months of savings to fall back on should be a priority, says Claudia Mott, a CFP and the principal of Epona Financial Solutions in Basking Ridge, N.J.

“An emergency fund isn’t money that is sitting in a retirement account or invested in mutual funds, but liquid assets in a bank account or perhaps a ladder of different maturity CDs,” she said. “Finding the extra dollars needed to build an emergency fund may mean cutting out some discretionary spending on items such as dining out and expensive vacations, unpopular choices for many families.”

Kevin Meehan, a CFP and regional president of Wealth Enhancement Group in Itasca, Ill., says that declining health is the most important driver of early retirement, citing conclusions from the 2015 study from Boston College’s Center for Retirement Research, “What Causes Workers to Retire Before They Plan?”

“The concept of financial wellness is hot right now not because we advisers wish we were doctors but because we see the major financial implications of an unhealthy lifestyle on a regular basis,” he says.

Meehan encourages clients to make “even simple changes” such as scheduling regular medical check-ups, playing mental agility games, standing or walking every hour at work, and cutting down on alcohol.

This story is part of a 30-30 series on preparing for retirement.