Can you rely on other sources of income?

One of the major reasons that people work so hard to prepare for retirement is because deciding to forgo a stable income is a major step. When you don’t have a paycheck, all of your expenses come from your savings and investments.

Related: 8 Ways to Successfully Save for Retirement During the Coronavirus Crisis

It’s no secret that the COVID-19 crisis has put the brakes on certain income streams. A lot of future retirees with rental properties will suffer financial losses as their tenants are struggling to make ends meet after being laid off or losing their jobs. Pending retirees with investments such as bonds or stock dividends will have to deal with market instability. Therefore, if you have other sources of income, evaluate and determine how reliable and consistent they are in the months to come.

Why it’s important

If your source of income is somewhat stable, even amid the coronavirus crisis, retiring earlier than planned would not require you to use some of your 401(k) money in case of a market downturn. If you know you can rely on your income streams, that could play into your decision to retire ahead of time.

Make sure you also see this post: Thinking of Retiring Early? These Real-Life Tips Can Help You Do Just That.