How to Cope With Forced Early Retirement
When you’ve been hit with a forced early retirement, it can feel as though all the “air” has been let out of your life.
The questions mount, don’t they?
- How will I survive?
- Do I have the asset base to live from?
- Do I need to find alternative cash flows?
According to a recent survey, most people want to work until they’re 65 years old. The reality, though, is that more folks are being forced to “retire” sooner.
The problem with a forced retirement is that you may well be required to make some major adjustments financially. Here are some tips on how to cope with forced early retirement.
Evaluate Your Situation
From all your savings to your income sources, try and evaluate if there is enough money for you to pay your monthly bills. If there isn't enough, then you either find a way in which you can make more money or you reduce your living expenses.
I realize that your forced retirement situation is requiring you to revise your entire retirement spending strategy & that it’s a bit scary.
If you planned to retire at 65 and intended to spend four to five percent of your savings each year, you may find that you must lessen that amount so that the same savings last you longer.
While that sounds logical, it’s often an ineffective strategy because you’re most likely going to need an alternative cash flow source to survive (more on that in a moment!).
Tapping Social Security
If you’re 62 when forced to retire from your workplace, you’re still eligible to claim Social Security payments. However, claiming at this age reduces the payout. Social Security increases each month you postpone your start date until you turn 70.
If you spend your savings first, you will qualify for a larger amount of social security later.
Look For a Job
OK, now we hit an area that may well be a sticking point for you, both logistically and mentally.
We all know the reality: The older you grow, the harder it may be to find a job. Even if you manage to find a job, it’s most likely one that offers you a lower status and lesser pay.
However, some money is better than no money when it comes to a forced early retirement. Even if you were to have a part time job, it would significantly help you with your finances.
Live Within a Lower Budget
If you fail to find a new job, then you have to learn how to live with what you have already saved. You may be required to downsize and potentially adjust your lifestyle according to what you can now afford.
If you’re like me, this isn’t a quality solution. If “getting a new job” or “lowering my expenses” aren’t the direction you want to go in, then I suggest that you live in the best time ever to be hit with an a forced early retirement.
You live in the information age and the time of the Internet.
You can learn new skills, build a legitimate business from home and increase your income on your own terms.
If this sounds like a better, more “in control” solution, I encourage you to do what I did:
Gain the skills necessary to create income from home.
Return from Forced Early Retirement to