AS YOU LOOK AHEAD to retirement, you probably have a target date in mind for when you’ll finally leave the workforce. But nearly half of retirees report leaving sooner than planned.¹ For some, poor health is the reason; for others a job loss. But it’s not only hardships that can change the timing. Thirty-five percent of those who retire earlier than planned do so at least partly because they realize they can afford to retire earlier.¹

Your retirement plan was crafted around when you thought you’d leave full-time work behind. Retire early, and you can find yourself scrambling to make recalculations, trade-offs and adjustments, especially if you’re leaving your job due to an illness, a layoff or the need to care for an ailing parent.

You have complex decisions to make and missteps to avoid. You might withdraw too much from your retirement accounts too quickly, for example. You could fail to account for the probability of increasing healthcare costs. And you risk making costly tax mistakes with your retirement accounts. This is when a financial advisor’s insights and steady guidance can prove invaluable.

Here are three key steps to take if you choose to — or need to — retire earlier than you’d planned.

1. Come up with a full picture of your income

The first step is to look at all your possible sources of income, which might include an early retirement or severance package in addition to a pension, Social Security benefits and withdrawals from retirement accounts. Then the question is whether to tap these sources now versus later. For instance, starting retirement account distributions earlier than expected can have damaging tax consequences — if you take distributions before age 59½, you may face an additional 10% tax on those withdrawals.

And collecting Social Security benefits early will reduce the amount of guaranteed income you’ll have later in retirement, notes Mary Jo Harper, senior vice president and wealth management advisor. (For insights on building an income stream no matter when you retire, read “How will you replace your salary when you retire?”)

“Your advisor can help you project how long your existing retirement savings could potentially last and suggest ways to adjust — for instance, by rethinking your goals, cutting expenses or taking on consulting work — if you fall short of what you may need for a comfortable future,” says David H. Koh, managing director and senior investment strategist, Chief Investment Office, Merrill and Bank of America Private Bank.

2. Get a handle on your expenses

Early retirement may also affect your spending in surprising ways. You may jump at the chance to travel widely, but you could also face lingering expenses you thought you’d be done with by now. “Debt payments are often a problem for those who retire early,” says Lisa Kent, a Merrill financial advisor. “That’s especially true for parents who may have taken on huge college tuition loans.” Talk to your advisor about options for refinancing or paying down any loans you still have.

What’s more, since Medicare does not kick in until age 65, you may have to purchase a costly private health insurance policy in the interim. (For more on managing healthcare costs throughout what could be a long retirement, see “The biggest retirement expense you may not be ready for.”)

You may also find yourself rethinking some spending goals. Do you need to continue to save for a second home, for instance? Or continue to own one given the potentially high carrying costs? Kent recalls one client who sold the family vacation home to keep debt payments manageable in retirement. Review the implications of this kind of major move with your advisor and tax professional. Selling any asset that has gone up in value can result in a large tax bill and have an impact on your Medicare premiums.

3. Revisit your investment strategy

Early retirement means that your savings may have to last for 30 years — or even longer. “A conservative portfolio built largely with investment-grade bonds and cash is unlikely to provide the growth you will need — especially if inflation increases down the line,” Koh says.

At the same time, you’ll need assets, like dividend-paying stocks, that can provide a predictable income stream. “Work with your advisor to create a basket of diversified, high-quality investments that will generate retirement income but also provide the growth you may need,” adds Koh. “The underlying quality of securities is critically important for early retirees who may be exposed to extra years of funding requirements and inflation over time,” he says.

“Clearly, there’s a lot of work to be done when you’re faced with earlier-than-expected retirement,” Harper says. “But with the right adjustments to a sound strategy, you could turn an early retirement into the satisfying and secure time of life you’d always hoped it would be.”