The Reality of Involuntary Retirement

Many workers are forced into retirement ahead of schedule.

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It was not all that long ago that people could hope to stay gainfully employed with a company for many years and perhaps even an entire career. Loyalty was a two-way street with employees working hard to complete the tasks at hand while companies valued their individual contribution and experience gained over the years of dedicated employment. The number of years on the job was a plus and seniority was a virtue.

Now job hopping has become the norm and longevity at a single job is a distant memory. It is likely that current workers will move through multiple jobs during a career. Sometimes job changes are the result of a personal decision to find something new or better. But many workers find themselves forced from current jobs into a market overpopulated with many other highly-qualified individuals searching for their next gig. For aging employees, a layoff or buyout can be especially challenging:

  • Half of current retirees say they retired earlier than they originally planned to mainly due to health or disability issues, according to a 2012 Employee Benefit Research Institute study.
  • In addition to health issues, seniors may find themselves out of a job due to economic issues beyond their control including a company being purchased or merged with another resulting in a duplication of roles, downsizing to adjust for changing demand, or even outliving a company that has run its course.
  • The median length of unemployment has more than tripled for those over 55 since the recession started. What was typically 10 weeks of unemployment prior to the recession ballooned to 35 weeks by 2011.
  • Increasing health care costs may cause a reluctance to re-hire older workers because employers may assume they will be expensive to insure.
  • But there are ways to recover from an unexpected early retirement. Here are a few ways to cope with an involuntary retirement:

    Try to save your job. Before you just accept a layoff, you may want to plead your case to your employer. Explain in detail the value you add to the company, the years of experience that have made you a model of efficiency, how you set an example for others, and why it makes sense to keep you. Be specific with examples of just how you have made things better. Describe the cost of hiring and training a replacement and the risk of hiring the wrong person and losing months of productivity. Help to diffuse the misconception that older workers are more expensive by explaining your health care coverage no longer includes dependents and the pay you receive is commensurate with your experience. But the unfortunate reality is that this is an uphill battle if the decision has been implemented across the company and the wheels are already in motion.

    Start your own business. Sometimes losing your job can be just the push needed to do something yourself. Instead of the daily grind you can pursue a course that you feel passionate about. Whether a short term choice until you find something else or a new career, taking those first steps when you have no other choice can get the ball rolling. If you enjoy identifying and completing one project at a time you may want to look into contracting or consulting engagements that utilize your past work experience. Home-based businesses can be created that require a minimal initial investment and provide flexibility in hours without the hassle of commuting. Turn a hobby that you enjoy into a money generator, whether you are an aspiring writer, crafter, musician, builder, or blogger. Try to view this as not only an unexpected challenge but also an opportunity.

    Volunteer. If you find you need to continue working but have few options available you may want to consider volunteering for a period of time at an organization you are interested in. Get in the door and build a reputation as a hard, dedicated, energetic worker in the hopes of being in the right place at the right time when other opportunities arise.

    Retire. Despite their best efforts, some people will find that the working world has few opportunities for older workers. Only a third of older workers displaced between 2007 to 2009 found full-time work by 2010, and often at reduced wages, according to a Government Accountability Office report. Many seniors want and need to work, but sometimes they simply can’t find a job that’s a good match for their current skills. Unexpected early retirees may need to significantly cut their expenses and change their lifestyle in order to live on the amount they have saved.

    Dave Bernard is the author of Are You Just Existing and Calling it a Life?, which offers guidelines to discover your personal passion and live a life of purpose. Not yet retired, Dave has begun his due diligence to plan for a fulfilling retirement. With a focus on the non-financial aspects of retiring, he shares his discoveries and insights on his blog Retirement–Only the Beginning.