How these two major types of spending shocks will affect your retirement planning

"Early retirement is becoming more common, with many retirees leaving the workforce before the standard age of 65. This trend can lead to longer drawdown periods, which necessitate lower spending rates to ensure funds last throughout retirement."

"The average retirement age is 62, and nearly half of retirees have retired earlier than planned, often due to layoffs or health issues. This shift in retirement timing can significantly impact financial planning and spending strategies."

Market performance is often the focus of retirement planning, but spending shocks can also threaten portfolio longevity. Two major types of spending shocks are unanticipated early retirement and uninsured long-term care expenses. Early retirement, occurring before age 65, is increasingly common, with many retirees retiring earlier than planned due to various reasons. This leads to longer drawdown periods, necessitating lower withdrawal rates to avoid depleting funds. Additionally, healthcare costs before Medicare eligibility can further strain retirement savings.

Read at Fast Company