Ready or Not, Here Comes Retirement

Health problems and layoffs push many people into retirement ahead of schedule.

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By Dave Bernard

Since the baby boomers started turning 65 in 2011, the world has not been the same. Each day for the next 20 years 10,000 more people will reach age 65. With so many beginning their second act and so many more to come, issues such as health care, Social Security and retirement living are becoming increasingly more important. Not only must these aging boomers come to grips with the realities of getting older, but they are entering the stage in their lives when society has traditionally said it is time to retire.

But you don't necessarily become ready to retire just because age 65 rolls around. Savings and investments may be insufficient to allow for the lifestyle you hope to live as a retiree. And beyond the financials, few people have seriously considered how they will spend their free time to make the most of this next chapter.

What if you are not yet ready to retire but suddenly find yourself compelled to do so for reasons beyond your control? Here's why many boomers are forced to retire before they planned to:

Health issues. It is not uncommon for health issues to become a factor as employees advance in age. As the years progress, some things just begin to wear down, ranging from knees and hearts to stamina and patience. It is not surprising that we may not have the same intensity and energy that our younger self was brimming with. If the job is physically demanding, we may not have the strength or agility required to continue at our duties. Sometimes we simply can no longer do what the job requires. Once the boss figures that out, aging employees can find themselves without a job. To make matters worse, at a time when you are no longer able to bring in money your health care costs are increasing.

Reorganization or downsizing. More and more older workers are finding themselves out of a job due to changes in the company and nature of the job they perform.
The frustrating thing is these reorganizations and the corresponding reductions in staff do not necessarily have to do with performance. You may be doing a good job but find your job eliminated in a wave of cutbacks. Tenure is a thing of the past in most industries. And if you lose your job after age 50, the job market competition you will face tends to be younger candidates earlier in their career, candidates who are often attractive to growing companies.

Once you are over 50, loss of employment can force a premature retirement. Even with careful saving and investing, you may find yourself forced to exit the paying world before you achieve your goals for financial security. It is increasingly challenging for those over 50 to remain or return to the workforce.

Mandatory retirement. Some companies and organizations have a retirement age employees must adhere to. When 65 rolls around, it is not a matter of choice but rather a policy that your career comes to an end. Even though you may still be very capable of performing your duties, you won't be welcome to stay on the job.

Stressful work environment. How often do you hear of individuals who are stuck in a stressful thankless job, but unable to exit because they need the money? Even in the case where the money is "too good" to leave behind, one has to wonder about the real cost of continuing with the status quo. Stress takes an incredible toll on mental and physical health. It is a sad state of affairs when someone survives a career and makes it to retirement only to find they are too beaten and worn down to enjoy their second act.

Retirement on your own terms. Then there are the lucky ones who because of a combination of hard work and good fortune find themselves able to retire when they want to. Finances are under control and good health is the state of affairs as they begin their second act with high hopes about what the next 20 or more years will hold. When they decide they are ready to retire, these fortunate individuals do so with a bright future waiting to be lived.

Dave Bernard is the author of "I Want To Retire! Essential Considerations for the Retiree to Be." Although not yet retired, he focuses on identifying and understanding the essential components of a fulfilling and meaningful retirement. He shares his discoveries and insights on his blog Retirement-Only The Beginning.


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raginnftmfs

There are so many things that might send someone into retirement before they are truly ready financially. The sooner you get started, the better off you will be, but you just can't plan for everything that might happen, especially as you age. make you plan at http://www.mutualfundstore.com/planning-and-retirement and stick to it. Hopefully, if something untoward does happen, you will have something set aside already to help you handle the transition.

May 01 2014 at 1:02 AM Report abuse rate up rate down Reply
pkleponis

Just a thought (not an original, someone else posted it elsewhere).... we pay into Social Security and the politicians and their minions keep trying to tell us it will eventually run dry because we will have too many retirees....so, how come Welfare, which no one pays into, except through regular taxes is never brought up as something that could potentially run dry. Also an interesting note...how many of you know that certain immigrant groups can come here and get on social security disability without ever having paid a dime into social security....

January 08 2014 at 7:59 AM Report abuse rate up rate down Reply
talari

Thank God that Obama ordered all those extra printing presses!

January 07 2014 at 9:14 PM Report abuse +1 rate up rate down Reply
jrb359

Someone on the left said that extending unemployment benefits creates jobs. I can not figure how that is possible, but then again it WAS someone on the left!

January 07 2014 at 6:48 PM Report abuse rate up rate down Reply
schmoyers

NOrth Carolina's new right wing legislature got rid of unemployment compensation. Guess what happened? people in droves dropped out of the labor mareket altogether. Employment did not surge as Senator Rand Paul suggests it would.if we get rid of unemployment compensation. Instead applications for Social Securirty Disability (and early social securitty at 62) went through the roof. People facing this techno driven and globalization recession will do anything to be able to survive. Don't forget that a person who is deemed eligible for Social Security Disability becomes eligible for medicare within two years. This just shows how stupid this right wing, anti America philosophy of the Tea Party, John Birch Society, Ayn Rand influenced right wing extremists really are.These folks do not advocate sensible modernization or reform of anything, just destruction of America's institutions and the lives of decent American people.

January 07 2014 at 5:44 PM Report abuse -1 rate up rate down Reply
toosmart4u

Signing up for the social security program, thank a democrat. Social security and my pension is a great way to live. The right to work states should understand that.

January 07 2014 at 5:29 PM Report abuse -1 rate up rate down Reply
1 reply to toosmart4u's comment
vlady1000

Europlan. You are correct except the FICA rate is 6.2% (not 6.1%) and then you have to add 1.45% Medicare (with no cap) to that. This, along with all the high federal and State income taxes, is one of the major reasons I have decided to retire earlier than planned......Just not worth working if almost 40% of my income goes back to a government entity in some form of a tax.

January 07 2014 at 9:19 PM Report abuse +2 rate up rate down Reply
rschli7137

Absolutely love retirement. Two great Union pensions and SS gives my wife and I financial security for the rest of our lives. We can enjoy travel, hobbies, and other activities without ever having to worry. It was a sad day when people got sucked into the 401K malarkey and gave up their pensions. 401K's were never designed to replace pensions, they were created as a tax shelter for management. I use my savings to have a great time. Yahoooooooo!

January 07 2014 at 5:16 PM Report abuse +2 rate up rate down Reply
1 reply to rschli7137's comment
smith65791

GLAD

January 07 2014 at 7:41 PM Report abuse rate up rate down Reply
bchrist751

All it took to become financial independent was steady work, , savings, which occurs from saving your wants and buying your needs, compound interest and Time.

Its so simple yet so few did it.

January 07 2014 at 4:23 PM Report abuse +2 rate up rate down Reply
1 reply to bchrist751's comment
Ken

The job market is more uncertain; in fact everything is more uncertain now!...Look at the internet bubble of 2000, and the housing bubble of 2008-2009. What is next?

January 07 2014 at 5:50 PM Report abuse +1 rate up rate down Reply
spike

Well I asked Mitt Romney and Shel Adelson if they had enough to retire.They both responded with a resounding NOOO! ( kidding )
You will never have enough.Some one has suggested 20 X your yearly salary.That is laughable.Maybe the one percenters can acquire 20 times their yearly salary for retirement,but no one else ever will.
No one ever truly has enough.How do you know what expense may arise tomorrow?
You will know when its time to retire.Just do it.

January 07 2014 at 3:05 PM Report abuse +2 rate up rate down Reply
2 replies to spike's comment
nad22551

I have more than 20x annual salary, and I am definitely NOT a 1%er. Been saving my whole life and invested in dividend paying stocks, with dividends reinvested. Anyone can do this.

January 07 2014 at 3:24 PM Report abuse +4 rate up rate down Reply
1 reply to nad22551's comment
vlady1000

Me too, but did it entirely a different way.

January 07 2014 at 5:41 PM Report abuse +2 rate up rate down
vlady1000

Racquetguy1
It was more their parents that put these kids in debt, by not planning for their education 15-20 years earlier when they should have. And for not setting an example on how to plan ahead 35-45 years for retirement. I agree, the gov is getting out of hand, but that is a poor excuse for not planning, and teaching our kids, about common sense finance.

January 07 2014 at 9:52 PM Report abuse +2 rate up rate down Reply
mae13rle11

Bottom line, 20 times ( 20 X ). If you're looking for a nice retirement you need 20X your net pay. If you made 50K a year and netted 40K, you'll need $800,000.00 in savings. Pretty simple ! All of these so-called finance people just want your money. Find a good no-load mutual fund family and invest yourself. Most charge no loads (commissions) and will help you (with honest help) with a plan to fit your needs. If are a novice, go to the Library and educate yourself. Subscribe to Money, Kiplingers, etc for a year and learn - your portfolio needs you to be smart about YOUR money!!

January 07 2014 at 2:01 PM Report abuse +2 rate up rate down Reply