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A loyal Money Talk reader brought up an excellent question in a recent comment: How do you condense all of the retirement planning most folks do over time if you experience an involuntary retirement through a reduction in force? My initial advice is don’t panic. There are many resources at your disposal. While you may have been caught in unforeseen circumstances, you can take back some control and refocus your energies on your financial well-being.

First, take stock. It’s time to know what you have as far as assets, potential sources of income (STRS, Social Security, Supplemental 403(b), 457 or 401(k) plans, etc.) and your liabilities and expenses: both fixed and variable. Make a comprehensive list to understand fully your household financial inflows and outflows and how they may change over time.

Many state retirement systems have excellent websites with courses available on their specific retirement benefits. Contact your STRS to check the accuracy of your service credits. Determine when you are eligible for benefits under the plan and how much you will receive. Do the same with Social Security, if you are eligible through your own employment or your spouse’s, and review other savings plans or benefits.

On the other side of your personal income statement, catalog your expenses. Look at credit card and bank statements to determine how much you spend regularly. Assess what is required spending (housing) versus discretionary (entertainment). One of your new biggest expenses will likely be health care coverage. Do you have any employee benefits through a COBRA provision of your previous employer’s medical coverage or other plans such as an HRA (Health Reimbursement Arrangement) or HSA (Health Savings Account)? Also, if you choose not to go back to work, how do your expenses change? Are there any others that increase/decrease?

Next, compare your income and expenses to determine if there is any shortfall. If so, what options are available to you? Can you reduce spending further? Can you continue to work? This might be an opportunity to change your career direction by doing something different or working part-time. Check out the NEA Member Assistance Program developed for NEA members who have been caught in a RIF. There you will find special services and important information including a national online job search resource.

Finally, talk with your financial advisor to review your income and expense information. They should be able to assist you in understanding how inflation, plan payout options, taxes and other outside factors impact your projections. And they can help determine what additional or alternate planning would be appropriate for you, given the changes you foresee in employment, cash flows and available benefits.

Here are some key ages you should know about:

1. 59½ - if you take distributions from certain qualified retirement plans before this age, you may incur a 10% tax penalty on the amount distributed, unless you meet an IRS stated exception.
2. 62 - the age at which you can start receiving reduced Social Security Benefits.
3. Full Retirement Age (65 to 67) as defined by Social Security - SS benefits taken before FRA will be reduced by a specified percentage for as long as you receive them.
4. 65 - the age at which you are eligible for Medicare coverage.
5. 70 ½ - the age minimum required distributions (RMD) are required from certain retirement plans. While this may not be an immediate issue, if you choose to change careers or continue working elsewhere, there are big penalties for not meeting this requirement.