How to Survive a Surprise RetirementReaching retirement can be a wonderful thing -- except when it catches you by surprise. Say, for example, when you're in your late 50s and the boss gives you the boot. Or you might fall victim to downsizing at a newly merged company. The culprit could even be an illness that interrupts you in the twilight of your career. And suddenly, it becomes clear that the next job isn't just around the corner.

Whatever its cause, an accidental retirement can leave you scrambling to come up with a Plan B. With the economy still shaky, and unemployment still far too high, many more people are finding themselves looking for ways to the plug the financial gap created by an early retirement. Here are a few ideas.

Get Real About Your Situation

Once you get over the shock, get a clear picture of where you stand. Start by charting your monthly expenses. "If you don't track expenses, now would be a good time to go back over the last 12 months of expenditures and set up a cash-flow-tracking program like mint.com or quickbooksonline.com," says Rick Kahler, a certified financial planner with Kahler Financial Group.

Next, conduct a "gap analysis," advises John Diel, a certified financial planner with The Hartford. How much do you need to cover the basics? How big is your buffer? How many months will any severance you receive last, compared to your expenses? What unemployment benefits are you eligible for, and for how long? And how big is your own emergency fund?

"As a last resort, will you need to draw from your retirement nest egg?" asks Dan Keady, a financial adviser with TIAA-CREF.
Also high on your list of priorities should be securing COBRA coverage for health insurance, if you don't have access to coverage through your spouse or some other program.

"Trim the Fat"

Reduce or eliminate past expenses, especially those related to your work life.

"Trim the fat," says Jonathan Gassman, director of tax wealth management and Gassman & Golodny. "Determine what's a necessity versus a luxury."

This means it's time to forget premium cable channels, driving new cars and frequenting fancy restaurants. Maybe you can downsize your home. Be willing to make tough choices. "Can your college-age kids take on a part-time job to help with school expenses?" asks June Walbert, a certified financial planner with USAA.

If you're age 62 or older, you income options increase with the ability to collect Social Security and tap into traditional IRA
accounts without paying a penalty. If you're under 59½, income options that won't trigger penalties are more limited, though accessing certain accounts -- for example, a Roth IRA that has been owned for at least five years -- is feasible, says Walbert.

Now is the time to outline all of your investments, cash accounts and other assets, and prioritize when it makes sense to tap into each based on your age, keeping in mind that your goal is to not withdraw more than 4% from your assets each year.

Create a "Jobby"

Face the fact that finding a job that's comparable to your last position might not be the cards, says Walbert. It may even be tough to find a temp or part-time job. Use every weapon in your arsenal. Turn that hobby that you love into a "jobby" to bridge the income difference, says Thomas Muldowney, managing director and financial adviser with Savant Capital Management.
Share services with others. Carpool, buy in bulk, and research community services for additional help, suggests Jeanne Brutman, a certified financial planner. Consider renting your home. Keep all options on the table.
Kick the tires again. If you think your unemployment benefits have lapsed, double-check. You might still be eligible for state-level program extensions, such as the additional 73 weeks of unemployment benefits provided under the Emergency Unemployment Compensation program in New York.

If you don't have a traditional "check for life" pension, consider creating a "self pension" -- a lifetime annuity -- to match your basic monthly nondiscretionary expenses, says Keady. This can provide an income floor, and some peace of mind. Another strategy, says Keady, is to create a ladder of CDs or high-quality bonds that mature each year to fill the temporary gap.

Kevin Kautzmann, a certified financial planner with EBNY Financial, says that over the past couple of years, he has seen a lot of clients who were forced into retirement. Most were saddled with debt and ill-prepared to retire on schedule, let alone early.

Don't Get Left Wondering

"People don't realize a house is not an ATM," Kautzmann says. "I see people 65 who still have a $500,000 mortgage. Are they going to be 90 before they pay it off?" He has scrambled to help such clients reduce expenses, look closely at assets and liabilities, and get back into dividend- paying stocks.

Coming to the end of your career path ahead of schedule can leave you wondering: What the heck happened? Learn the lesson, and vow to be ready next time -- for anything.

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Richard Scott

I was an administrative manager in Pennsylvania working for a graduation product company based in Indiana. We were in the black making several million dollars for the company, yet that was not enough. Our plant closure was not a result of the recession. In some respects, we were outperforming the Indiana plant(?). Corporate vanity and greed were the cause of the closure late last year. The narcissistic divisional VP more enjoyed his authority while closing the plant rather than consider futures of about 160 people. Sixty years ago, companies had great respect for their employees and in certian cases treated them like family. What happened to us? About 20 years ago corporations started moving jobs out of the US. Politicians, who should have been looking out for us, were lining their pockets with cash from these corporations and special interest groups. Thus, they did nothing as the stream of lost jobs grew into a mighty river. We can vote some out, but until we prohibit the practice of politicians taking their money, they don't work for us. This nightmare started a few decades ago and will take decades to correct. I feel for those like me who are involuntarily retired.
rtscott32@aol.com

January 12 2011 at 4:45 PM Report abuse rate up rate down Reply
mike edwards

this all happened to me i was unawre of that extra 73 weeks of unemplyment and like a fool went back to work for one third of what unemployment was paying be aware of what benefits you have coming before taking a lessor job

January 12 2011 at 5:06 AM Report abuse +1 rate up rate down Reply
Glen

I am 63. My wife and I made the adjustment, mentally and financially. We rent a house. Our 1997 & 1998 cars are paid for. My SS check covers our monthly "nut" with several hundred dollars to spare as we have no bills. My wife works a little to keep busy. We have the least amount of income since we were first married, but we have never been happier. We have traded "things" for peace of mind and time to get closer to God.

January 11 2011 at 10:57 AM Report abuse rate up rate down Reply
acpward69

I was hit with this Apr 10, 2009, my last day of work. i was 2 months away from my 62 birthday and had been jumping from job to job since 1998, when my plant was closed. What prepared me for this was the past 11 yrs of job hunting and knowing not to expect much from the US job market. I have an Engineering degree, but helped my income by being a carptener in summer and working in a hardware store in the winter while looking for work. I got a chance to work as a contract worker took it and ened up with full time work for two companies. I siezed the time to get on their 401k matching as long as i could.
Finally i knew in 2009, it was all lost, no one would be hiring me unless I wanted to work for nothing.

AT last, i was finally able to collect my SS & use those IRA accounts without the 10% extra tax, without taking from savings to survive, but shortly I will dip into those funds.
I just say God Bless you all if your trying to get hired by people half your age, the job you get, if your hired at all, its because no one else would take the job.
Yes, after working 45 yrs, there were no goodbyes, no gold watch, its very sad.
ps: Consider dying your hair if you interview, if its too white or grey, vbg

January 10 2011 at 1:33 PM Report abuse +1 rate up rate down Reply
redrose337

Well, SHERYL NANCE-NASH That last sentence in this article shows that you have not seen how the over 65 generation is faring. You think that over 65 and we can all "try again?" or as you said "Learn the lesson, and vow to be ready next time -- for anything." There is NO next time. We are all trying to survive on what we have and what is due us. But thanks to politicians and other greedy finance people, we have been left in the dust. The perception of "old people" lingers on. The Japanese have great reverence for their elders and think of them as the wisdom that the younger generation lacks. The younger ones rely on the older ones to guide them and give them advice from life experiences. Our younger generation could care less. They think they know it all - and I repeat, that last sentence says it all. Poor journalism on your part.

January 09 2011 at 4:30 PM Report abuse +5 rate up rate down Reply
1 reply to redrose337's comment
acpward69

Liked this very much. Be advised the Japanese companies in this country, hire the older American Engineering and suck them dry like fish eyes and then lay them off once they get their plants running. Yes the pay is good. I could have gladly gave up $15000 to $20000 just to have stayed, Yes they kept all the 30 yr old workers.

January 10 2011 at 1:39 PM Report abuse rate up rate down Reply
RMS

OK, here's the reality. 52 y.o., laid off a year and a half ago, single, so no second household income. Savings are gone, have sold anything of value, house is gone since bank took it. Cannot find another job, even minimum wage part time. They say I'm "overqualified". Living with elderly parents for now, have less than $1000 in savings, no health insurance, don't even qualify for Medicaid in my state. The reality? Either find another job or wait to inherit. Life sucks.

January 09 2011 at 1:15 PM Report abuse rate up rate down Reply
2 replies to RMS's comment
acpward69

Sorry to hear this, have been there except had 2 homes and family, it sucked.

I was able to get contract work, ck all on line for contract work.
Good LUck

January 10 2011 at 1:41 PM Report abuse rate up rate down Reply
mighty wizard

hey man sorry to hear the bad news but check this out. ive got 3 labs and they make a mess of my backyard. if u want i will allow u to come over ( at the time of my choice) and pick up all the dog poop i have a shovel and will supply all the garbage bags etc. i may even have some other tasks that u may be able to perform . what do u say, oh and i will pay cash and more than minimum wage.

January 11 2011 at 6:32 PM Report abuse +1 rate up rate down Reply
1937

I worked over 50 years, payed in the max social security over 30 years. My wife developed a river boat gambling habit when the boats came to Missouri. Now I am working on a tar paper shack [ on someone elses property ] to finish out my life, [ until the death panel finds me ].


I am a 73-year-old man. My wife of 12 years left October of 09. She had informed me a few months earlier that I had to remortgage the house to pay her gambling debts of about 33 thousand dollars again. I refused; when she left, she had a computer with a porn image on it. She had bought the computer even with two computers in the house.
She talked me into paying her gambling debts in about 2002, promising to ban herself from the casino boats. Later I discovered she used a different name on the ban documentation and continued to gamble unknown to me.
Afterwards I cashed in my retirement plan and bought a new house. We were in the new house about a year when she told me she had continued to gamble, accumulating about 18 thousand in debts. I mortgaged the house on her promise to quit gambling. We bought a new car with some of the money of the line of credit on the house also. As stated above in late 09 she informed me of the continued gambling, with the 33 thousand dollars of gambling debts. She left claiming the computer had porn on it and if I did not agree to her terms, she would take it to the law.
I obtained a lawyer that at first appeared to be aggressive to do me justice. I obtained her bank statements showing where she had withdrawn $34,795.08 from her checking account. This was money from her salary until her job closed social security and state unemployment benefits. I also discovered she had drained the line of credit on the house. I contacted the state gambling agency, to no avail. I did contact a highway patrol officer who enforces the state laws on gambling. She was arrested for trespassing a few days later and had to pay a fine.
I met with my lawyer with documentation of my retirement account details, of it being earned prior to marriage, trail of cashing it in then purchase of the house. I had copies of her checking account, the account of the line of credit and her bankruptcy. He stated she had no right to any monetary relief. My lawyer called once about the porn claims that her lawyer was making. I had informed my attorney of the porn accusation in the initial conference, he indicated the charges were just threats and not to worry.
My lawyer, my wife and lawyer did not come to the pretrial settlement conference with the presiding judge. Two days later on the trial date my lawyer did not show until about ten minutes past the docket time, telling me it had been settled and I would have to give her $35,000.00 and pay her health insurance for two years. I disagreed, the lawyer got belligerent and said I had too agree or the judge would get mad if I brought up any of the evidence, including the fact that her former husband and his wife were there to testify of my wife’s methods to get what she wanted. My wife’s former husband had volunteered to testify that in their divorce my wife had told him to buy her a new car or else she would file charges of sexual misconduct with her teen age daughter. My wife and her former husband’s present wife were single "buddies" when I met my wife. They had same age daughters in junior high school. The former husband’s present wife had two other teen age daughters at home at that time. This woman told me that she knew the husband had not done anything to my wife’s daughter, or she would not have had anything to do with him. My lawyer said the judge would get mad and throw the book at me if anything I claimed was presented in court, that my wife was entitled to the settlement.
After that day in the court house, I talked to the local police, the detective stated my wife had brought in a computer and wanted me arrested. He told me he found no illegal porn, and my wife got upset he did not take her word and arrest me anyway. The detective furnished me a phone number to the FBI, the agent there checked and no information indicated any porn reports.
My wife contacted me with demands a few days later, threatened me if I did not do as she wanted she would call a U.S. Attorneys office and have me prosecuted.
I hung up and called the U.S. Attorney, they stated they had the computer, it had illegal porn, but they could not prove who had put it on the computer. The local detective did not find illegal porn, but 100 miles away and a later date the U.S. Attorney found illegal porn????


Spencer W Chaffin
Swc453@sbcglobal.net

January 09 2011 at 11:34 AM Report abuse +1 rate up rate down Reply
1 reply to 1937's comment
SUSIE Q

These guys live in ga-ga land. "Start your own annuity"..you have just had to retire early, no income and the article tells folks, oh, go ahead and start an annuity and you will be ready for next time. Get your heads out of the sand Mr Financial Advisor, the real world is not anything like your pie in the sky world. And by the way, you will still take your fee regardless of the situation, how nice of you.
One thing that I am sure of, if you had to leave early, take another job immediately if possible. If not possible have the biggest garage sale that you can manage. This will buy you time to negotiate with your creditors in payment reductions while still able to stay current. If and when you obtain employment ask the creditors for a new payment schedule to meet your new income ratio.
And do not pay some vulture investment advisor to take your money.

January 09 2011 at 10:44 AM Report abuse +2 rate up rate down Reply
lrogklx

you said it e4

January 09 2011 at 9:32 AM Report abuse rate up rate down Reply
DIANA MARIA

That is the best way I have heard it put accidential retirement. I am a seperated 55yr old female with a college education. I have had several medical problems and have been diagnoised with add, anxiety, panic disorder, short term memory loss, depression and insomnia. I applied for SSI & SSDI was temporarily accepted 2 months and then denied. Thus verifying the fact they must turn you down the first time to meet their quota. (I believe they even get a bonus for doing so) Has anybody out there ever thought about the fact it is your money. You draw no interest on it and there are thousands of people who never even get to receive it. The treatment of elderly persons is becoming worse. I have my parents in their 80"s they have noticed it too. If not for us there would be no younger generation. It's my money and I want it now!!!!!!!!!!!!!!!!!!!!!!!!!!!!

January 09 2011 at 7:32 AM Report abuse +1 rate up rate down Reply