Forced into Retirement
To be forced into anything makes the reality of the situation so much more difficult to accept. Whether you have been looking forward to retirement or not, when it’s forced upon you it
is going to put a wrench in your plans. One of the first things that come to mind is what about your financial plans? How is early retirement going to affect your nest egg, that’s if you are fortunate enough to still have one!
Retirement plans shattered
Over the past few years many employee retirement plans have been shattered. The security they once thought that they could rely on when it came time for their retirement has been pulled right from under their feet.
Some companies are permanently closing their doors. Others are trying to cut costs in other ways like job sharing. Many long term employees are being offered early retirement by companies that are losing money.
If you get the news that you are being laid off or forced into retirement the first thing you’ll probably feel is panic. It may seem like the end of the world at first but once over the initial shock, for some it’s a great opportunity to pursue a different career path or start their own business. So many stay in jobs they hate in order to get benefits and a pension when they retire. It is hard to give up the thought of that type of security. But when retirement is forced on you, in the long run it may turn out to be a good thing. Keep in mind that it doesn’t have to be the end of your work life unless you want it to be.
If you should find yourself forced into early retirement, don’t be too quick to sign any important documents from your employer. Be sure to seek advice as to your rights, what will happen to your pension, and medical benefits? Health benefits are important so will you be covered by your spouse’s health plan if yours comes to an end? Will you be receiving a severance package? What exactly are you entitled to get?
Keep retirement plans on track
If you do start work again you may get health coverage with your new employer, usually after 3 months. If you have a trusted financial advisor maybe they can go over everything with you to help you adjust your plans so that you can try to keep retirement plans from going too far off track.
Time to be proactive
Now is a time to be pro active. You have some important decisions to make if you have been forced into retirement. If you do receive a severance package, be very careful with your spending. Use it for your basic needs, your day to day living, until such time that you can spend it without compromising your future plans. Be sure to have a plan in place before making any rash decisions.
What do you want to do?
Consider finding another position even if it’s only part time. This is a time to figure out if you are really ready to retire, and if you can afford to retire. And, if you’re not ready or able, what will you do? What do you want to do? Are you interested in becoming self employed? Do you have a specific skill that you can bring to the market place that will provide you with extra income?
Explore all of your options
Some individuals like my brother an engineer, safety and environmental consultant took early retirement from his company, before he turned 55. He knew he was not ready to retire this early. Although a huge step out of his comfort zone, he decided to start his own consulting business. He still does contract work for his old company on occasion but as a consultant and not as their employee. It’s working well for him. He has to travel from home a bit more but he works a lot less hours, plus, financially most of the time he is no worse off than working full time for an employer.
Fill a need
His skill is very specialized but there are many other skills that can be utilized. Maybe you were in construction, have writing skills, accounting, marketing, computer or other skills. If you have a skill that fills a need for others and it’s something that you like to do; it will seem less like real work, and you will have more control of your own destiny.
Even if retirement issues are not affecting you right now, and maybe you think that your retirement is way off in the future; you never know what the future will hold. you may be forced into retirement one day so you need to have a plan in place just in case. Then go one step further and have a plan B.