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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