Retirement is sometimes suddenly sprung on older workers. The recent recession and slow recovery forced many older workers into retirement. Companies had to lay off many senior employees or ask them to choose early retirement.
Once an employee, especially an older one, is laid off, it can be very difficult to find a comparable position with a similar salary. Some people opt for a smaller salary or became freelancers, while others go ahead with early retirement. But early retirement can be difficult if you are not adequately prepared.
Now that the economy is starting to recover, there may be some opportunities for people who were forced into early retirement to go back to work. And people who are bored with retirement might want to seek new roles to stay active. Here’s why people who retire don’t always stay retired:
Finances. Can you stay retired and pay the bills? If you have been unemployed or semi-retired for six months or more, then you should know by now whether or not you can stay retired. If you are drawing down your savings too fast, then your retirement is not sustainable and you might have to rejoin the workforce. Early retirees typically face a 10 percent early withdrawal penalty if they try to spend their retirement account balance before age 59 ½, which makes it even more difficult to retire young. However, if you have income from other sources such as spouse’s employment, rental properties, or other investment income, then perhaps you can stay in retirement.
Time. Another big challenge for new retirees is the time factor. When we are working, there are never enough hours in the day. Once you are not employed anymore, it can be difficult to fill the hours. One solution to the sense of idleness is to leverage your skills and start freelancing. Working part time or freelancing will give you some additional income and you might be able to pick and choose your assignments. In this case, you can do what you enjoy and improve your financial situation at the same time. If you don’t need additional income, there are other great ways to spend your time. You can volunteer at a charity, join local organizations, improve your living space, or spend more time with your family. However, some of us are workaholics and enjoy the office environment. If you are one of these folks, then going back to work might be the answer.
Health. When I was working full time, the constant stress created a lot of physical and mental problems for me. I am feeling much better after retirement, but I still need to go see the doctor and have a complete check up. On the other hand, some people have more health problems after they retire from their career. The lack of social interaction and direction can create mental problems for some people. That’s why it’s important to monitor your health throughout retirement and constantly look for ways to make improvements.
Will you stay retired? The retired life is easy for some people, but it can be very difficult for others. Older people can be productive much later in life now due to improved health. Retirement offers excellent opportunities to continue contributing to society after leaving a full-time job or to pursue your interests. An individual’s finances can also determine if retirement is possible. If you can’t pay your bills without a full-time job, then it’s not time for retirement yet. If retirement isn’t a good fit, then going back to work full time or starting your own business might be the way to go.
Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.