How would you handle a forced retirement?

[trimatty471]

Another topic for discussion courtesy of The Washington Post:


www.wisebread.com/5-ways-to-handle-a-forced-early-retirement?wpisrc=nl_finance&wpmm=1

What would you do if you are at age 55+ but under 62 and was forced to retire due to disability/illness, family illness, downsizing & etc.?
What would you do if you age 50?

[milee]

Very tough situation.  Even if your retirement savings are on track, it's the health insurance and health care costs that will eat you alive from age 55-65.  If I found myself in that situation, I'd probably figure out what type of McJob I would be able to have a reasonable amount of fun with and not have it be too burdensome, just to get health insurance covered until retirement.  Locally, that would probably be at Whole Foods, Starbucks or one of the entry level positions in the parks and rec department.

[hoops902]

The reason for the "forced early retirement" seems pretty key here. If it's for downsizing or something similar, then that seems a lot less "forced" and more just an option you're taking. In that case it seems simple enough to SAY I'd just find another job (obviously the forced part here is that it isn't that simple to just find another job at that age). There are obviously less things I can do if I'm disabled or ill.

The flip side of that is that I don't really plan on working to age 62/65/67...I'm planning to work until about 55.  If it happened to me at 50, then my approach would be similar to what it would be at 55 if I'd planned to work to 62. Hopefully my chances of success would be greater at 50 than 55 though, regardless of what that plan is based on the reasons (obviously the younger you are, the easier the "I'd just get another job" plan becomes to actually carry out).

It also largely hinges on what the job market looks like at that time. Right now I work in an industry which is HUGE in this area (insurance/financial services). It wouldn't be a problem for someone 50+ to get at least a data entry type job here for the insurance. What that looks like in 20 years is probably significantly different.

[Deleted]

One good thing about being low paid is there's always another equal job out there.   I can't imagine not being able to get any job at least similar to what I have even when older.  We have tons of manufacturing here and light duty electronics assembly.  Lots of older people working here. 

If the reason was for disability or illness I would think you would be eligible for LTD and Medicaid (or whatever it's called). 

If it was the entire industry collapsed and no jobs available, well, I guess I would have to figure out a way to make do.  It might mean some pretty drastic changes if it happened at 50 (which is only 18 months away!!). 

[Deleted]

Jul 31, 2017 9:42:17 GMT -5 hoops902 said:

The reason for the "forced early retirement" seems pretty key here. If it's for downsizing or something similar, then that seems a lot less "forced" and more just an option you're taking. In that case it seems simple enough to SAY I'd just find another job (obviously the forced part here is that it isn't that simple to just find another job at that age). There are obviously less things I can do if I'm disabled or ill.

The flip side of that is that I don't really plan on working to age 62/65/67...I'm planning to work until about 55.  If it happened to me at 50, then my approach would be similar to what it would be at 55 if I'd planned to work to 62. Hopefully my chances of success would be greater at 50 than 55 though, regardless of what that plan is based on the reasons (obviously the younger you are, the easier the "I'd just get another job" plan becomes to actually carry out).

It also largely hinges on what the job market looks like at that time. Right now I work in an industry which is HUGE in this area (insurance/financial services). It wouldn't be a problem for someone 50+ to get at least a data entry type job here for the insurance. What that looks like in 20 years is probably significantly different.

I don't think it's as easy to get a data entry type job when you are college educated and have a history of significantly higher employment.  Being overqualified can get you rejected as quickly as being underqualified.  The company suspects that the job is temporary for someone with your qualifications.  


milee's Whole Foods, etc. type job might be more workable simply because they'd buy the narrative that you are simply trying to be productive while shifting gears.  I would just question how good their insurance is.

[giramomma]

We'd be OK.

At 55, I'll have 30 years into the pension system and can retire with full benefits, which includes money towards health insurance.

That would mostly replace our current take home income. But, by 55, we'll be down to one child at home. So, I think things would even out well enough.

We've got a taxable account with passive income that would fill in the rest. Plus, I work two jobs. If I get downsided from my dayjob, I've still got my night job. I'd need to work 5-7 hours a week to generate 1K of income a month.

The flip side is that the only way I'll face early retirement is if I become very sick or disabled. However, my job is largely a desk/computer internet access job. So I'd have to be really, really ill/disabled to not beable to work my day job. For DH, it would be severely disabled or on his deathbed.

DH's general role, in our marriage has been caretaker. He'll just transition from focusing mostly on our kids to parents. So that pressure is off me.

Age 50 would be a little tougher. I'd retire with less of a pension. I'd have to teach more. Or DH would have to pick up an extra job.

I think looking in unconventional places is the key. My city is ALWAYS looking for crossing guards. Part time work, pays well enough (over double minimum), plus if you work 20 hours, you get access to the city pension and health care.

[Deleted]

Jul 31, 2017 10:21:23 GMT -5 giramomma said:

We'd be OK.

At 55, I'll have 30 years into the pension system and can retire with full benefits, which includes money towards health insurance.

That would mostly replace our current take home income. But, by 55, we'll be down to one child at home. So, I think things would even out well enough.

We've got a taxable account with passive income that would fill in the rest. Plus, I work two jobs. If I get downsided from my dayjob, I've still got my night job. I'd need to work 5-7 hours a week to generate 1K of income a month.

The flip side is that the only way I'll face early retirement is if I become very sick or disabled. However, my job is largely a desk/computer internet access job. So I'd have to be really, really ill/disabled to not beable to work my day job. For DH, it would be severely disabled or on his deathbed.

DH's general role, in our marriage has been caretaker. He'll just transition from focusing mostly on our kids to parents. So that pressure is off me.

Age 50 would be a little tougher. I'd retire with less of a pension. I'd have to teach more. Or DH would have to pick up an extra job.

I think looking in unconventional places is the key. My city is ALWAYS looking for crossing guards. Part time work, pays well enough (over double minimum), plus if you work 20 hours, you get access to the city pension and health care.

Yes.  I almost suggested driving a school bus.  That's considered full-time employment with RSA so full participation in the retirement system and subsidized insurance.  Before someone says, "What!!!" . . . I think it's structured that way so that they don't have to pay unemployment over the summer.  Plus, it's hard to find people to do it since it makes other employment difficult.

Of course, the pay is lousy . . . it maxes out at $10,000 a year.

[Apple]

I've been doing whatever I can to be set up to take early retirement at age 46, if it was ever made available to me.  So, in case of a RIF, I'd have access to my pension and TSP right away.  The only bad thing is my job is not usually one "on the list" of being allowed the early out.

So, if it were not due to illness or disability, I'd love it.  If it was a disability/medical retirement, it's still pretty good financially, but it would suck to be that sick because I wouldn't get to enjoy retirement the way I envision.

[tractor]

I have LTD to cover me in case the retirement was due to a disability, in fact I'm double covered so would actually get paid more than I do now. As far as a job change, I have many options so I do not worry.

[thyme4change]

Spend my days lobbying for single payer, maybe.

[Anne_in_VA]

Well, since I've already reached retirement age at 70, it wouldn't make much difference.  We would live very well off my SS, RMD, DH's military pension and his W2 job. 

[buystoys]

I have to laugh at suggestion #3.  My "low cost" health insurance policy premium is more than my mortgage.  Before DH went on Medicare, it was more than DOUBLE my monthly mortgage payment.  If I meet my deductible, I'll have spent more on health care this year than I spend on my mortgage, property insurance, property tax, electric, water, and garbage combined.  I'd love to know which low cost policy they are recommending because I'd be happy to look into it. 

[Tiny]

I would be OK. 

Back in my 40's I came to the conclusion that I probably wouldn't be 'change jobs' without investing a lot of time and effort into my career. If I continued coasting along - by the time I was 50 - I'd never be able to get another "high paying, high tech" job. And to be totally honest I couldn't see myself at the grind of my current career at 60 or 65.

I set a financial goal to be able to 'retire' at 55 - started saving/investing big time - and I figured even if I couldn't save enough to retire at 55 - maybe I'd have enough $$ to NOT need a high paying job.     I'm 53 and pretty much on track for 55 being when I won't need a high paying job.  But then there's healthcare. 

I was kind of excited about the ACA and how by the time I was ready to use it (say at 55)  - it would have some of the 'bugs' worked out.   But, that's not going to happen so now if I do loose my job - I may have to go without healthcare do to expense  (I'm in reasonable health and have no perscriptions) OR get a job that has benefits. 

Either way -  I would make it work...  and actually, it looks like I will run out of a "job" sometime in the next 2 years. 

[Deleted]

Health insurance is my biggest worry.  I may require a very early retirement due to health, last year was diagnosed with a condition where 50% of people are no longer working after 5 years from diagnosis (good news is 25% never returned to work after the initial incident, and I've been back at work for a year, so hope to stay in the working half).  Probably would be ok if the worse happens, will be fine if my work LTD policy works out or SS Disability where I then get medicare.  But definitely scary as you don't plan in your 20s that you will be required to retire by mid-40s.  Luckily I was over saving, but I still hope to be able to work until closer to a more traditional retirement age (i.e. 55). 

[phil5185]

I was in a forced retirement in 1998, worked good for us.  The company that I worked for had a couple buyouts in a 4 or 5 year period so we knew it was coming. The buyout offers were for the 55 and older workers, each offer was better than the previous.  The final offer was for 3-weeks pay for each year worked, I was almost 60 - that was a fit for me, I was aiming for age 62 but the buy-out at 60 was almost the same amount of money.
We were given the company retiree healthcare (altho that was reascended when Obamacare began).  I took a co pension at age 60, SS at 62. My 401k was almost a $M - we had 3 rental houses - so no worries. 
During mt college years I had a summer job driving an 18-wheeler - during the my 35 year engineering career I kept my CDL, that would have been my fall-back career if engineering had ever failed. And it would have been my new career at age 60 if I had needed a job.

[kittensaver]

Like tractor mentioned, I also have LTD insurance, and as retirement starts to come into view it comes closer and closer to being able to cover *most* of our drop-dead financial needs until other sources of retirement income kick in. Our Plan B (a financial goal we reached a few years ago) would be to sell the house, take the equity/proceeds and move somewhere we can buy all-cash for a smaller retirement home, and the other (non-disabled) one of us could keep working in a new location.

And like others have mentioned, health insurance is the killer in this scenario. If we were in the marketplace right now (we're not; we have coverage through my employer) our premiums would be more than our mortgage, and the coverage would be much skimpier than what we have now.

ETA: if I were disabled enough to stop reporting to an office every day but could still do *some* work from home, I'd do something allied with the field I currently work in (social services/mental health): advocacy/conservatorship, SSI payeeship or even medical billing.

[binl1908]

DW was laid off at 54.5 and I was laid off soon after at 55. Luckily we had always lived frugally and had a decent amount stashed away. We decided to try and make a go with what we had.  Sold the house in the expensive NYC suburbs, bought a new but smaller house in eastern PA. 4+ years later, we're still doing fine. Living off the profits on the NY house plus savings. Next year we will be able to access the IRA's penalty free. Since we are living mostly on our savings, our Federal Tax MAGI is low enough to get some decent insurance thru the ACA that is partially subsidized. Small pensions await us at 65. We'll be okay, we don't have any expensive hobbies or vices. Just hope that some health insurance option will be available till we qualify for Medicare.

[empress of self-improvement]

We're surviving. DH was forced into retirement, age 46, by his shithole employers and union because his motor skills were getting worse. I also think it was retaliation because the manager of the store he was working in was being a dick about the elevator getting fixed. DH CANNOT use stairs and so the prick would purposely hold meetings upstairs. Whatever. Anyway, he's retired, he collected STD for 6 months or whatever it was. Dumbass never signed up for LTD so I had to get his SSDI paperwork in ASAP. Thankfully he was approved on first attempt so that worked out. Now he also collects a reduced pension payment as well. Health insurance is covered by me, for now. He may go on Medicare next open enrollment so I can find another job. Joy.


ETA: Due to the progression of his MS, he is unable to work as he can't walk and spends most days either sleeping or in the bathroom.

[The Walk of the Penguin Mich]

Jul 31, 2017 19:32:48 GMT -5 empress of self-improvement said:

We're surviving. DH was forced into retirement, age 46, by his shithole employers and union because his motor skills were getting worse. I also think it was retaliation because the manager of the store he was working in was being a dick about the elevator getting fixed. DH CANNOT use stairs and so the prick would purposely hold meetings upstairs. Whatever. Anyway, he's retired, he collected STD for 6 months or whatever it was. Dumbass never signed up for LTD so I had to get his SSDI paperwork in ASAP. Thankfully he was approved on first attempt so that worked out. Now he also collects a reduced pension payment as well. Health insurance is covered by me, for now. He may go on Medicare next open enrollment so I can find another job. Joy.


ETA: Due to the progression of his MS, he is unable to work as he can't walk and spends most days either sleeping or in the bathroom.

Your husband should be eligible for Medicare 2 years from the date he started collecting SSDI, regardless of open enrollment.  I believe I was notified a few months beforehand.  However, finding a Medigap policy when you are on disability is difficult.  

[alabamagal]

I was laid off at age 43. We had 18 months between announcement that plant was closing and when it actually closed. I got retention bonuses to stay, pay for unused vacation, 52 weeks of separation pay, paid benefits for 1 year, plus I collected unemployment for 4 months while job hunting. Even though we knew about shutdown for a while, if you left before shutdown you wouldn't get the benefits, which was over $150k for me. The people who were retirement eligible got retiree health care and ability to start pension early - if you were 50+ and 10 years at company. I think the company later jacked up prices for retiree health care. But the main difference is pension options. I now have a decent pension, but I have to take it at 65, no early or late options. I am likely not able to retire early.

As far as job situation I chose to limit myself to the small city we lived in which greatly reduced opportunities. My kids were in high school, wanted to stay in GA for college scholarships, and We owned a retail print business which would be hard to sell. I took a supply analyst job for 3 years and then engineer at startup company, both at much less pay. Eventually kids were through school and DH sold business. 3 years ago I got offer for job in AL at better than my old pay, great relocation package and great benefits.

[dee27]

My mom and most of her division were forced to find new jobs when the company sent their jobs off shore. She found a P/T job since dad made enough money to pay their bills. Mom retired 6 months before she could collect SS @62, but she was allowed to continue her health insurance until she reached 65 and eligible for Medicare.

[tallguy]

How would you handle a forced retirement?

Do a voluntary one before that, then stick around part-time to see how long they last?   

[Shooby]

  I think you just handle it the best you can.  If you are downsized, the company goes out of business, let go or whatever you have to look at your options.  Do you have enough money to completely retire, or can you live off your savings and then work part time or do you need another full time job?  Then, you go from there.

[gooddecisions]

One of my former bosses pissed off a few too many people and was given the option to take a demotion or resign. She was 50 and said, no I will take option 3 and retire. She was kind of an asshole, so I was glad to see her go. That was 3 years ago and she appears to still be retired. I see her post nasty things about my company on facebook from time to time, usually in the form of comments on co-workers' innocuous posts. She still lacks grace 3 years into retirement. Regardless, I hope to be in the same position when i am 50, but less bitter.

[Bonny]

Jul 31, 2017 10:40:47 GMT -5 Apple said:

I've been doing whatever I can to be set up to take early retirement at age 46, if it was ever made available to me.  So, in case of a RIF, I'd have access to my pension and TSP right away.  The only bad thing is my job is not usually one "on the list" of being allowed the early out.

So, if it were not due to illness or disability, I'd love it.  If it was a disability/medical retirement, it's still pretty good financially, but it would suck to be that sick because I wouldn't get to enjoy retirement the way I envision.

You might think about volunteering for a RIF.

A gf moved with the company to Omaha from CA. Hated it and couldn't fit in with the culture. When the RIF came not enough people were willing to take the buy-out and she volunteered. They didn't give her relo costs back but between the buy-out $ and deducting the moving costs on her taxes she did o.k. Happily employed in Sonoma County, CA.

[The Walk of the Penguin Mich]

Since I found myself in this situation, it is more difficult than you would think.  Financially, I'm ok.....very ok.  I prepared for this, maybe not thinking it would happen this way but I am glad that I made the choices that I did throughout my career.

Where it IS difficult is socially.  I miss the lab and the mental stimulation.  I miss being a cog of a wheel that I felt that was doing something important.  It didn't help that I left my social circle when I got sick, and because I left them I really didn't have the means to acquire a new one in my new location.  So there are times where I feel incredibly isolated and I spend a lot of time alone (luckily, I am somewhat of an introvert so this isn't horrible....I'm ok with my own company).  Add to this is the frustration that pre-illness I used to be an active person who used physical activity to fill in my working life, and now there are limits on my physical activity.  The primary method I used to alleviate frustration is no longer available to me (luckily though, the stresses that used to cause the frustration are greatly diminished too)  So I see things that I need to do and can only do some things - others, I know will send me to the drugs and I really try not to do that.  

Health insurance is another issue, and you just cannot blow it off like this article does.  Low cost policies do not exist.  If you are at the age where you are downsized, paying about $700 per month is a huge amount.  I heard about a few weeks ago from a friend of mine who is 60 and buying a mid priced policy on the exchange.  Their retirement income is about $60K/year until SS kicks in, but needing to pay $8400 each year for X years until you hit 65 is a good chunk of change.  I have Medicare, but getting a Medigap policy is almost impossible if you have Medicare and are disabled.  This anchor has been hanging over my head for the last 5 years, because my last round of medical bills ran about $750K.  20% of that is a buttload of money.  Fortunately, I've been lucky in that all my medical issues have been maintenance, so very minimal.  But because I was infected, my risk is about 10x the normal risk of being reinfected, which makes this a rather scary situation.  Luckily, this situation has now been covered (since TD has gotten a job with benefits), so I can breathe a little easier.

I'm lucky.  But this article glossed over a lot of stuff that happens, that you just don't consider.

[cktc]

I have no idea what it would look like, but I'd manage. It's still 20 years out for me, and my current job probably has a 5-10 year shelf life. I work for a small business and my employers are in their mid-late 60s. I'm more concerned with what will happen when they decide to quit working. I could possibly try to do the small business thing on my own, but if DH's career is sound, we have enough in savings, and the kids are in school, I'd like to take a couple years for sonography school.

[alabamagal]

Is it really retirement if you quit before you start?


giantswire.usatoday.com/2017/07/30/new-york-giants-jadar-johnson-leaves-camp-retires-football/

[Artemis Windsong]

Pre-plan for this.  Live frugally. 

Cut backs, downsizing, management whims, unfriendly take overs are a way of work life now.  Buy outs of higher pay grades is happening in our state gov't.  Shut down entire programs in our two hospitals who are the largest employers.  I feel for the people who bought McMansions on two big salaries. 

Health insurance and other insurances are nearly half most peoples' living expenses.

H. retired early because of management change.  Even if you know it's coming, the feeling is like a recurring sucker punch.  Or a sigh of relief.  17 years now.   

A friend went on vacation for a week returning to a company shut down.  

[Rob Base 2.0]

We'd survive. Have a military pension of $49,000 a year with COLA ($38,000 after taxes and retiree medical insurance and stuff). We have $600,000 in retirement accounts and $100,000 EF. Wife would have to stop contributing to retirement accounts until I found another job. My job is generic enough (budget analyst) and there are enough government organizations in the area that I think I could find another job.  Worse case we should survive.....