A DISTURBING TREND: RETIRING BEFORE YOU WANT TO

#retirement #RetirementPlanning #layoffs #buyouts
It’s an alarming trend, a letter writer wrote.
People in their 50s are getting laid off, he continues. The workers may get an optional early-retirement package which, if not taken, leads to a layoff a short time later, he continues.
Or, he says, it may mean becoming a contract worker making half the money with fewer, and more expensive to you, benefits. “A friend who refused a package last year will retire with much less this month because of shortsightedness,” he writes.
The letter writer signed his missive “B.” He wrote the letter to Peter Dunn, the USA Today columnist known as “Pete the Planner.” His column was also published March 4, 2018, in The Atlanta Journal-Constitution.
To sum up Pete’s response, he advises: “Draw a horizontal line on a piece of paper, and create a series of hash marks on the line, representing future age markers. Next, list major life events on the timeline. Be sure to note events such as your mortgage payoff year, when you reach age 59.5 (when retirement funds become available) and when you hit 62 (the first chance to activate Social Security). …
“When I drew my line, I noticed my need for money peaked at age 53,” Pete continues. “If I were to lose my job at or around 53 years old, I would be in big trouble. Therefore, I want to be sure not to take on any additional obligations around that time in my life. Knowing when you’re the most at risk is a reasonable way to avoid additional risks,” Pete writes.
He goes on to say that the age timeline will help people evaluate any early buyout options.
This topic is trending at a rapid pace. Pete advises that retiring at a normal age, with “normal” benefits etc., is challenging enough. Retiring early because one is forced to can be torture, he writes.
Planning is obviously a wise decision, but the best laid plans can go awry when you least expect them, or want them, to. So, we are in a milieu in which we have to PRESUME that we will not be able to work at our current jobs for as long as we want. Reorganizations will come frequently. Bad managers will come into your life and throw you out – or force you to leave on your own.
The age-old advice is to spend less and save more, as consumer adviser Clark Howard preaches. If you “have to have” the latest, up-to-date gadgets, think about whether your current gadgets are serving you well. A rule of thumb might be: if a new gadget will give me pleasure, and is not a necessity of life, postpone buying it and live with the older technology. When the old stuff craps out, then replace it.
If you have, say, a daily habit of buying a cup of coffee in the morning, you might think about buying a Thermos and brewing your own coffee to take with you.
In other words, examine the little things you do in life that cost you money. Do you really need to spend it? Remember, too, to think value rather than price. Sometimes, buying better stuff up front will keep you from buying multiple cheap things later on.
Finally, if you are planning your financial life as best you can, but you don’t think it will be enough when you get shown the door at work, think about investing a few part-time, off-work hours in something that may not only augment your income, but could surpass it. There are many such vehicles out there. To check out one of the best, message me.
Meanwhile, draw the diagram Pete suggests. This is especially good for folks who are less careful about their spending. Save well. Invest well – or as best you can – with a good, trusted adviser.
In today’s world, for many people, retirement decisions, unfortunately, are made FOR them by others. Be prepared for that decision to be made for you, as early as tomorrow, no matter how old you are.
Peter

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