Dave Bernard planned on retiring at age 62. But in early 2012, he lost his job as a sales manager and everything changed.
Then 53, Bernard joined the legions of Americans who stopped working years before they intended. About 60% of current retirees did not plan to retire when they did, according to Voya Financial.
Unwilling to stew in self-pity, Bernard regrouped and sprung into action. He took a long-abandoned hobby — playing piano — and started up again. And he launched another activity — gardening — with gusto.
“Initially, I questioned my worth,” he acknowledged. “When you don’t have a job, you feel you have to make an excuse when people ask what you do.”
Fortunately, his wife continued to work full-time. Her job gave him access to health insurance and freed him from short-term financial pressures.
Involuntary retirement can throw a wrench into the best-laid plans. A layoff or health crisis leaves many individuals grappling with idleness, tightening their budget and reassessing an uncertain future.
“Depression is the No. 1 emotion that comes up,” said Lynn Dunston, a certified financial planner in Denver. “Your identity disappears suddenly. Your pride gets hurt. You’re used to having influence in the community and then it’s gone” when you’re forced to retire.
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The circumstances that lead to a premature retirement are often hard to predict. But by taking a proactive approach while you’re still working, you can soften the blow.
Start by asking yourself, “What can I do now to prepare for the day after I retire?”
Then take incremental steps to engage in activities or interests that you’d ideally like to pursue in retirement.
For example, Bernard enjoyed writing. So in 2010 — two years before he lost his job — he launched a blog. When retirement hit, he already had an outlet to compose short articles.
His eagerness to indulge his hobbies has paid off. Aside from expanding his blog, lovebeingretired.com, Bernard joined a wine club at a vineyard near his home in Carmel Valley, Calif.
After getting to know the vineyard’s manager, he accepted an offer to work there 15 hours a week. Despite the low pay, he loves spending time in a rustic setting that’s devoted to wine.
“My advice to those who face involuntary retirement is don’t put too much pressure on yourself,” he said. “Give yourself time to adjust. You don’t have to be busy all day. Just add a few things at a time and take it one day at a time.”
It helps if you’re adaptable. For decades, you may have conjured a retirement built around long bike rides or mountain hikes. But if a disabling injury cuts short your working career, it may also limit your retirement options.
“Then you’ll need to rethink what retirement looks like,” Dunston said. “If you can’t ski or bike, you need to be open to something else like traveling or spending more time with family. You don’t want your plans to be so rigid that they can’t be undone and redefined.”
Speaking of flexibility, allocate your assets to maximize cash flow if you must retire earlier than planned. Dunston encourages clients approaching retirement to set aside sufficient cash reserves to cover their income needs in an emergency.
“Have some intentionality in where you pull your money from,” he said. “Creating a retirement withdrawal strategy helps your assets last longer” and prevents you from, say, selling a stock at an inopportune time to cover your living expenses.
Source : MTV
