When Retirement Comes Too Early
By: Jim Truesdell
People tackle life’s milestones in somewhat similar order. New graduates work on paying off student debt and establishing the basics of a household as they pair up and get married. The first house becomes a project. The raising of children and their education consumes a considerable amount of resources. For some the creation of a business is a preoccupation. But throughout this lifetime of goal setting and achievement there is usually an underlying long term plan of funding an enjoyable retirement…….what living will be like and what resources will be required when a certain age is reached and one is ready to enjoy life on his or her own terms, usually with a spouse or significant other.
Most people have an approximate target age in mind and probably a desired next egg they hope to have accumulated by that time. When a person is young and healthy and more or less in charge of his or her own fate it is easy to paint a well-defined picture of how these retirement goals will be achieved. But the reality many people are now facing is that these plans can go awry.
The financial meltdown of 2008 decimated the savings and investments of many people approaching their retirement years. The ripple effect in the economy brought about numerous downsizings in companies across the country. This, coupled with outsourcing of jobs to other countries and new skill sets demanded by technology changes which have obsoleted much of the knowledge and experience possessed by older workers, has confronted many people with a forced retirement upon which they had not counted. They have found it is almost impossible for an older person to replace a long-tenured high paying job and benefits with a comparable position. Though usually not overt, age discrimination certainly exists and those who make hiring decisions frequently select the younger (and supposedly less expensive) candidate on whom they can build their business. Add to this reality the loss of housing values which had inflated family net worth and the country is full of people who find themselves “retired” and unprepared emotionally or financially for that status.
What is to be done when a person unexpectedly finds himself or herself in this situation? First, prepare alternatives for this eventuality long before it becomes a reality. While preparing a financial and life plan is a great way to meet your desired goals, planning also should encompass the possibility of twists and turns in that road of life. What if things don’t proceed in the way we expect them to? Have we equipped ourselves with skills and interests to help us cope with a changing job market or a life with more leisure time and less material wealth? Knowing you have an alternative plan can provide a great deal of emotional security as you approach the pivotal years of your career where you may begin to have less control over events. Certainly history shows us that events not of people’s own making can upset carefully laid life plans. Wars, depression, dislocations, illness and radical changes in technology or demographics can change the rules of the game. If this happens will we find ourselves immobilized or will we be flexible enough to roll with the punches and pursue other paths? I know numbers of people who quietly have equipped themselves with skills or education so that they could qualify for new opportunities in the event their current job evaporated. In doing so they found a piece of mind that helped them relax and flourish in their current positions. Some were able to remain in their jobs until the retirement age of their choosing. Others used their newly acquired skills to find new jobs or to start entrepreneurial businesses where they were in control of their fate.
But what if the surprise of unemployment in your fifties hits you with no warning? What if you haven’t laid the groundwork for such a situation?
Looking at your situation in a level-headed way can help to formulate your plans. Giving way to panic can lead to poor decision making such as launching into unwise business schemes or investments, draining your 401K despite withdrawal penalties, moving away from all that is familiar with you, or emotions which can wreak havoc with a marriage or other relationships. Setting up a reasonable budget and expectations of a new financial reality can take the pressure of maintaining an expensive lifestyle off of your family. Keeping up appearances and the trappings of extravagance have little value in the long run. Keeping up your own appearance, health, relationships and energy are far more important to your happiness and resiliency.
Take the time to take stock of what you really want to do with your life. Is a simpler life with more leisure and emphasis on primary relationships going to make you happier than you were anyway? Is this the chance to pursue a career which you have always wanted even if the financial remuneration is small in comparison to your previous profession? Is the psychological compensation of serving others a way of making up for lost income levels? Had you identified yourself too much with your job and position anyway (and which you are now free to stop doing)?
From a practical standpoint, should you take a job with a lot less pay and prestige quickly because you do need some cash flow and because enforced idleness will leave you feeling depressed and unconnected with the world (something which you probably need to work on anyway)? What friends and contacts can be enlisted to help you in finding new opportunities? Are you entitled to any unemployment compensation or is your eligibility for social security benefits approaching?
More and more people find themselves involuntarily retired these days. It can be a debilitating and depressing state. But how much better if you have prepared for the eventuality and use it instead as a chance to pursue a more fulfilling life! And if it catches you by surprise— don’t despair. Bitterness, though understandable, will not be a helpful emotion. Decide where you are going and make positive steps to mold a satisfying retirement. Service to others, closer relationships, new challenges, and control of your life may well prove more rewarding than the pile of dollars you were counting on!