The 3 Types of Retirement
Retirement comes in three main forms – forced retirement, early retirement and “of age” retirement. Each is complete with special benefits and downfalls that make retirement both a blessing and a challenge. After years of working and paying into the system, many people expect to retire in a comfortable place and enjoy the last stage of their life. This however is not the case today. Understanding your options for retirement before they occur is the only way to be prepared for the worst and best of retirement.
Forced retirement refers to being laid off by an employer. Some people are fortunate enough to receive compensation packages and final pay-outs from their employer. Other employees of less glamorous jobs will be forced to retire based on their age and the current economic standing of the company often without severance pay or benefits. If you are lucky enough to receive options for a compensation package, review each carefully. Forced retirement is more than just a sum of money that is being paid out. It is crucial to determine if your life situation allows you to retire early and not find other work as well as allows you to go without benefits. The best placed senior will carry health insurance through their state as well as health insurance through an employer. This ensures that all bills are covered and unnecessary expenses do not accumulate for those who are already on a fixed income. If you are laid off as part of corporate down-sizing and unable to survive until retirement age is reached so that you can receive your benefits, then it is necessary to figure out how much additional income from any savings you have is necessary for your family to survive. For many seniors, the option with forced retirement is that they must continue to work in another job to make ends meet. Forced retirement is also an option for a person that is injured and unable to continue to perform their job properly.
“The early bird gets the worm” is one popular phrase that highlights how proper planning in life can result in great rewards. Chosen early retirement is one of the benefits of proper planning. A person or family who has saved money over the years, invested smartly and built up a solid nest-egg will have the option to retire prior to meeting retirement age. A retirement calculator will factor monthly expenses and current income along with projected savings and earnings from investments to help a person identify when they will be able to retire and live comfortably for the future.
Of Age Retirement
The most popular type of retirement is “of age.” This refers to the point in which a person reaches the retirement age of 65 and is able to cash in on their social security benefits. Many people look forward to this moment in their life. It is the defining point when they can begin to enjoy discounted meals and services around town as well as take time to enjoy the finer things in life. However, for far too many people, of age retirement is not possible due to poor planning and lack of savings. An employer may remove a person from their staff who reaches this age simply because they can hire someone who significantly younger at less pay to perform the same job. It is important to plan for “of age” retirement starting at age 50 so that you are financially secure when the time comes. This includes downsizing living space, unnecessary expenses and starting a small savings account that incurs interest.