I had always said that I was going to retire at 50. I had worked and saved since I was 16. Retiring without health insurance or social security is a scary thing. I ended up retiring and then I went back to work. At 53, I took a part-time job with decent pay for hours, but I was so bored. And then life rang my bell.
I had major medical problems. So important that when I was able to get back to work, they let me go because they didn’t think I could keep up with the work. They were probably right. No one else felt comfortable enough with my health issues to hire me. I applied for disability but it was denied. I appealed and got my appeal dismissed while in intensive care. I appealed again and was denied because they thought nothing had changed from my original request.
I guess you can imagine what my savings are now. I took early retirement, with penalty, because I needed an income. $4,000 a month wouldn’t have reduced my prescriptions.
Everyone should know that there is no safe amount of money set aside for retirement. Life happens and in the blink of an eye your whole life and everything you worked for can be gone.
See: I’m 68, my husband is terminally ill, and his $3 million estate will go to his son. I want to spend the rest of my life traveling – will I have enough money?
I normally only submit letters with questions for this column, but your rating was so important to other readers that I had to respond – and let others see what you shared.
I’m so sorry you went through this. Wanting to retire early isn’t inherently bad – so many people want to, especially after decades of work. But without proper planning, it could lead to despair, especially in an emergency.
“Retiring early is a dream for many people,” said Landon Tan, a certified financial planner. “But those years out of work lower your chances of a successful retirement more than almost any other metric we use when making financial plans.”
Retiring early means there are more years you need to be able to financially cover, and that takes money – lots of money. When planning for early retirement, these extra years need to be taken into account – in the early stages of retirement, but also at the end if you live longer than expected.
“Today’s retirees expect their accumulated assets to work for them for 10 to 20 years longer than before,” said Glenn Downing, Certified Financial Planner and Founder of CameronDowning. “Centenarians are no longer rare. For this to happen successfully, there needs to be more assets – simple as that. Everyone should be prepared to live longer than expected so that their money doesn’t outlive them, which can seem daunting.
Those missing years can also affect your Social Security benefits, which so many American seniors rely on for most of their retirement income. People retiring early should have a clear idea of what to expect from Social Security in the future and how their plans may impact those expectations.
Leaving the workforce may also mean losing participation in a group health plan, and I think we can say with certainty that the pandemic has shown how crucial health insurance can be in difficult times.
You’re absolutely right: retiring before health insurance is scary. Health care is expensive even without an emergency. Not everyone considers this expense when dreaming of quitting smoking in their 50s, but if they haven’t purchased adequate insurance when they retire, they could quickly blow their retirement budget — or put themselves in a very dangerous situation. . Those years can seem long when Medicare eligibility doesn’t begin until age 65 for most Americans. And that also doesn’t take into account long-term care, which is a whole other expense. Think of nursing homes, home health aides and medical equipment needed for daily activities.
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Knowing how much is enough to have saved for retirement is very difficult. There is no “safe” number before retirement, but there are some guidelines one can follow to find security in old age.
Part of this equation comes down to personal circumstances: how much you typically spend in your lifetime before retirement, how much you plan to spend in retirement, various financial factors like taxes and the cost of housing and utilities, and so on. And as you have experienced – and carefully remind others – major, unexpected emergencies can absolutely derail any kind of financial security.
Another factor is what is available to you in your older years. I’ll get to that in a moment in hopes it might help you or others in similar situations.
Retirees tend to focus on short-term changes, which can lead them to be unprepared for what the future holds, according to a recent survey. Many retirees deal with these emergencies as they arise, according to a study by the Society of Actuaries. The organization found that more than seven in 10 retirees have thought about how their lives will change in the decades to come, but only 27% feel financially prepared for this.
More than half of retirees in the survey said they couldn’t afford more than $25,000 for an unforeseen emergency without compromising their retirement security. More than half of black respondents and Latino respondents said they could not afford to spend $10,000 for a financial shock.
“The world can change very quickly around you, and you need to be prepared for and deal with change,” said Anna Rappaport, actuary and fellow of the Society of Actuaries. Americans often didn’t anticipate the shocks life could bring before the pandemic, and that hasn’t necessarily changed since then, she said. “The shocks were there before and the landscape just changed a bit.”
Read the MarketWatch column “Retirement Hacks” for practical advice for your own retirement savings journey
But you are not alone. Many people have fallen on hard times before and during retirement, pandemic or no pandemic. You may already be exhausting all avenues, but this retiree has shared the steps he took when he lost his job at 58. He looked for another job for 18 months before taking one with a 40% pay cut, and had to live much leaner. until he officially retired at age 64. This lifestyle included hosting a roommate, shopping for household items at the dollar store, and extreme meal planning. Here’s what he says about his retirement now.
If your health permits, could you accept part-time work or find ways to earn money while working from home? Or could you possibly downsize where you live or take on a roommate?
I know you didn’t ask for any suggestions and I’m sure you’re already doing everything you can to live comfortably, but there are plenty of resources you could consider if you haven’t already.
Have you explored government benefits, such as help with housing, heating, or groceries? There are many federal and state programs available for seniors in need of financial assistance – not just Supplemental Security Insurance and Medicaid, although these are of course the best known.
AARP has created a list of resources, broken down by state, and has its own services, such as helping people get back to work in their 50s and beyond. GoFundMe also has a financial aid listing for older Americans. It includes options for housing, food, medication and re-entry into the labor market. States, and sometimes even individual cities, have departments and offices dedicated to aging issues, which you can also try calling. There is help out there, although it may not seem easy to find.
I wish you the best.
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