Forced Into Retirement? What You Should Do

Did you love your job? 
If so, you may have been happy with your life.  That is until your supervisors explained that
your company was cutting costs.  Due to
those cost cutting measures, you are being forced into early retirement.  If you are like many other individuals in
your shoes, panic may be the first feeling that sets it.  Yes, being forced into early retirement may
seem like “the end of the world,” but it doesn’t have to be.

Forced Into Retirement?  What You Should Do

When being forced into early retirement, you will be
required to sign a number of important documents.  Never agree to retirement without first
learning about your company’s rules, restrictions, and attached strings.  Will you receive a severance package?  Does that severance package eliminate your
pension or eliminate you from receiving any other important employee
benefits?  If so, talk to a financial
advisor right away, particularly before you sign anything.  Determine what your best course of action
is.  Is it better to take the severance
pay or receive all of your benefits?

Speaking of talking to a financial advisor, you should take
this step anyways.  Early retirement can
throw a wrench into your plans.  You may
need professional assistance to get those plans fixed and back on track.  A financial advisor can examine your
retirement wants and needs, determining an estimated figure that you need to
comfortably retire.  Next, a financial
advisor can help you come up with a plan of action to get those needed funds.

In the event that you opt for a severance package, do not
spend that money right away.  Unfortunately,
many forced into retirement make this mistake. 
If you are living day-to-day, use your money to pay for your
necessities, such as food and shelter, but nothing else.  If you have “extra,” money, deposit it into a
savings account or an Individual Retirement Account (IRA).  Doing so may increase your money, based on
interest rates and tax benefits.

It is also important to remember that social security
benefits come with rules and restrictions. 
Just because you are forced to retire early, it doesn’t meant that you
qualify to receive social security yet. 
That is why you are encouraged to take action and right away.  Should you qualify for early social security
benefits, due to your age, know that the amount you receive overtime may be
smaller than what you intended to live on.

Most importantly, remember that being forced into early
retirement doesn’t necessarily mean that you have to stop working.  If you are asked to retire a few years
earlier than planned, you may be unable to do so financially.  Will your money run out too soon?  If so, working may be your only option.

Before leaving your current job and accepting your company’s
early retirement package, examine your health insurance.  Regardless of your age, you should never be
left without health insurance.  Depending
on your age and your financial standing, you may qualify for Medicare or Medicaid.  However, do not leave your job without
knowing.  COBRA will leave you protected
for 18 months, but you should have another plan.  If you start working again, you may be able
to get health insurance coverage through your new employer after 90 days.

If you haven’t been forced into retirement, it is an event
that you should still plan for.  Many
companies are finding themselves losing money. 
For that reason, they are offering early retirement packages to many of their
long-term workers, particularly those that are close to the retirement
age.  With that in mind, just because you
are close to the retirement age, it doesn’t mean that you are ready for
it.  Even if you are only twenty or
thirty years old, please know there is a chance you could be forced into early
retirement down the road.  That is why it
is imperative that you start saving for retirement now, as you never know what
the future holds.