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Retirement Planning > Retirement Investing

Nearly half of retirements are forced

By Michael K. Stanley

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Close to half of all retirees are forced to retire before they would like to, according to recent research by LIMRA. Forty-nine percent of all workers involuntarily become retirees while 45 percent retire upon their target date.

LIMRA found that pre-retirees (individuals several years away from retirement) can have their plans altered by myriad factors that are outside their realm of control. Health issues and job loss (either by hand of employer buyout or negative work conditions) were the most common reasons cited by LIMRA.

However, it is not unheard for older workers to be eased into retirement as a company seeks to revitalize its workforce with younger employees in order to remain technologically competitive.

Obviously, early retirement can wreak havoc on one’s financial planning as pre-retirees typically have stringent savings requirements in order to maintain a certain lifestyle when they retire. And it is not just standard of living that is impacted by early retirement. LIMRA reports that early retirement can have a significant impact on employer-provided benefits such as health coverage and retirement contributions.

Notably, pre-retirees who are forced into early retirement may not be able to supplement their income with Social Security benefits or a reverse mortgage.

The blow of an unexpected early retirement can be softened by systematic saving throughout one’s career and because it is nearly impossible to predict a retirement date with perfect accuracy, LIMRA suggests that advisors encourage clients to invest and plan early in their careers.

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