Smart SpendingSmart Spending

Why you might have to retire early

Here are 5 reasons you may be forced to quit your job before your actual retirement age. Are you prepared?

By MSN Money Partner Jul 12, 2012 2:12PM

This post comes from David Ning at partner site U.S. News & World Report.


U.S. News & World Report on MSN MoneyEarly retirement is the dream of many people working 9 to 5. But the reality is that a significant portion of the population will involuntarily retire early before the official retirement age.


Here are five situations that could push you into retirement ahead of schedule:


Image: Wheelchair (© Image Source/Getty Images/Getty Images)Incur a disability

Disabilities can occur without warning. You need to prepare for the worst-case scenario of becoming so ill that you cannot continue to work. While there is a safety net for people with disabilities, it's still going to be a devastating financial hit if you aren't prepared for it.


Caregiving responsibilities

Some people who are perfectly healthy may become unable to work because they need to care for family members. I recently learned of a husband who quit his job to take care of his wife after she was diagnosed with diabetes. He had a decent job, but the salary wasn't enough to justify him working full time while hiring full-time help to take care of his wife. And he didn't feel entirely comfortable leaving her with a stranger. At 62, he quit his job, even though he never envisioned quitting the workforce, let alone doing it early. (Post continues below.)

A once in-demand skill set is no longer marketable

Legions of manufacturing workers are finding it tough to get decent jobs, as companies are increasingly offloading manufacturing jobs overseas to cut costs. The business world is constantly evolving, and your skills may one day become obsolete. While a complete lack of work is less likely, a common scenario is that you just can't find a job that pays as much as you used to make, which hits many people's finances quite hard.


A layoff late in your career

It's not always easy to see the warning signs of layoffs before they happen. Job loss can be especially traumatic for older employees. It generally takes older workers much longer than young people to find a new job, and some people end up never landing a new gig.


While there are things you can do while unemployed to boost your job prospects, such as volunteering or retraining for a new career, employers are sometimes reluctant to take on people they fear will retire soon. The best way to prepare for a late-career layoff is often to save as much as you can while you still have a job.


Businesses shut down all the time

A dangerously common situation among small-business owners is living the high life while not saving for the future. Perhaps due to their risk-taking nature, many self-employed individuals believe they will be able to figure things out if times get tough. More often, the lack of savings will leave them struggling to make ends meet if the business fails, which happens all too often. You don't want to be forced to shut down your business because of the lack of a cash cushion.

No matter how successful your business or career is and how stable you believe your income to be, an unexpected turn could force you into retirement ahead of schedule. Saving more than you think you will need while you are employed will give you options if you encounter a health problem or job loss.


More on U.S. News & World Report and MSN Money:

Jul 13, 2012 7:12PM
First of all 62 is not early retirement.  I hope it never becomes early retirement.  The average life span is 78!  Now factor in quality of life and I bet that average drops a good bit.  Early retirement would be anyone under 62.  Many folks face disability in their mid 40's to early 50's due to age, disease and injury.  The body does not recover as well past the age of 40.  For example a back injury at age 40 is likely to remain chronic for the remainder of ones life and if that person has a heavy labor job that back injury likely will lead to retirement if the employee can't cross train into a lesser demanding job.  These articles falsly lead you to believe we are living longer.  We are not living significantly longer!  Also somewhere in their quality of life has to be calculated in.  Sure we have drugs and technology that may slightly lengthen life but does it lengthen quality of life.  For example living life in a nursing home is not quality living.  Prolonging life without prolonging the quality of that life is useless.  I think outliving ones mind is cruel and once your mind is gone I say your life is gone.  I don't consider that prolonging life.  Good Day
Jul 16, 2012 8:43AM
Take everyone off welfare.  Make retirement age 50.  Use the welfare money to pay retiree's and now the welfare recepients don't have an excuse not to work.  There are now oodles of jobs.
Jul 13, 2012 6:14PM
Several of the points in this article apply directly to my situation.  I'm 57 years old, and the company I worked for for years went bankrupt.  As I continue to look for full-time work with benefits for the last two years (I have had three temporary jobs with no benefits), I find that with my skills stagnating and my age, employers won't touch me with a ten-foot pole.  My parents are not in a nursing home 700 miles away, and I have Power of Attorney and am handling their business affairs.  My only sibling, a brother that is 58, is having severe physical and mental health issues, and can't help with the folks' affairs.  After working since I was seven years old on the farm my dad had (essentially 50 years working), I can't buy a job despite having two college degrees and years of blue-collar (pre-college) and technical (post-college) work experience.  There are, however, upsides in all this.  My house is paid for and I have no debt,  I am in relatively good health, I have a working wife (ten years younger), and now have time to care for my parents and my brother, and maintain our home and property while my wife works.  I'm sure glad I saved money and built a retirement when I was working, because it is likely I will never have another full-time job with benefits.
Jul 13, 2012 6:39PM
I did retire early and ya know what..............Everyday is a Sunday:)
Jul 16, 2012 6:44AM

Make up my mind here. It's becoming nuts to get old. I'm 65 and retired. Here is a view point for you olders. Young people take heed to, you will be here someday.

1. All this talk when to retire was 62, 65, now 66 talk about 68, 70, whats next 72, to never.Younger generation crabs about paying a couple pennies more in taxes that they will benifit from later.

2. Old folks need to retire so younger people can move up the ladder, we're holding you back by working longer. we also hold up anymore hiring keeping unemployment high.Keep raising the retirment age and the more Old Folks are going to keep holding you back and on unemployment. The Baby Boomer groupe is very large.

3. Tell me what you want! Heck I've been in Damnd if I do,damnd if I don't situations half a dozen times through out my life. The last place I thought I'd find one would be at Retirement Time.

Jul 13, 2012 5:35PM
Ageism. To get a good position above the age 50 is nearly impossible.  So if you lose your job you may have to retire early.  Good luck!
Jul 16, 2012 10:39AM

I retired ( quit my job) this year also, at 49. Saved at least 60% my whole like. Worked like a dog to pay my mortgage off in 5 years ( on an affordable within my means house). Then worked like a dog to purchase 3 more rental properties at dirt cheap foreclosure prices ( thanks all you min wage earners who thought you could afford a 300K house because the big ole bank said you could).. One of the properties i purchased had (3) yes three mortgages on it when it was foreclosed on. ( thanks refi'ers for using your house as collaterial to pay off your credit cards for useless consumer goods)

Do  not need ss , however would really like to be able to collect at 62, after all it is  6.5% of my earnings they took and I would like it back.

Common sense and living below your means.


Jul 13, 2012 5:50PM
There will be no choice. I was laid off at 55- 39 years solid business experience - nobody would reply to my resume and now at 58 I work part time security and 1/4 what I made and with no health insurance. You BET at 62 I am doing it!
Jul 16, 2012 8:07AM

Retirement ? What is that ? Oh yeah, that's when you die. Might not be that way if the crooks in Washington didn't steal OUR Social Security funds. You know,the ones we have paid in all our working lives just to have them vanish before our very eyes !

The "Experts" say a 75% payout by 2035. They all lie. I'm betting on a 50% payout by 2025. Of course "Our Congress" won't fix the problem they created. Why should they. They don't have to live on SS. Too bad people in this country don't rise up and revolt against this Government the way people in other countries do. That's what it will take to make any REAL change.

OBAMNEY 2012 : Either way, WE are screwed.

Jul 13, 2012 5:47PM

A person can prepare for the worst, seek expert advice, and play by the rules, but there isn't a real viable way to prepare for an unknown future. How many seniors set monies aside in retirement plans, to wake up one day broke because Wall Street stole their nest eggs? One cannot and should not live in the past or in the future, but live life in present. Before a lot of people get their shorts in a wad, that doesn't mean irresponsibility. If one spends all his time worrying about things that may never happen, then he is not living! If you think for one moment that you can forecast your future, then you need to sit down and talk with a person who became disabled. You can be a wealthy person with all the insurance in the world, but if you become disabled, the system will bleed you dry. The only people that disability doesn't affect are the extremely wealthy; everyone else is a statistic waiting to happen. Older people in the U.S. are becoming to most discriminated segment of society, and disabled elderly people are even more discriminated against. The best defense for retirement security is a large family of which shoulders the moral responsibility of caring for their parents. The second, less attractive option is to commit a white collar crime and let the prison system take care of you. While such alternatives should be taken "tongue in cheek," one should appreciate the thought that there are no perfect solutions especially regarding retirement.

Jul 13, 2012 2:32PM
It is not just living the high life (saving nothing), but living the high life, saving nothing and having indebted yourself with huge committed expenses (house, car and credit card minimum payments, property taxes and the like).  Then when the well runs dry, not only can't you even cut way back on living the high life, but you have to keep make those minimum payments.
Jul 16, 2012 11:55AM
Some people are old at 30. Some people are young at 60, it;s a number. It depends on the person, retirement is not for everyone. It can be boring for some. If a person doesn't have family or a lot of friends having co workers can be like family. I worked with a man 70 he was sharp and healthy I enjoyed working with him. He was a good worker, the company ask him to retire. I missed him.  
Jul 13, 2012 6:52PM
Mr. Anthrope I know where you're coming from.  I got laid off in 09/03 at age 50.  Most of the resumes that I sent out never got a response and those that did, where I actually got an interview, went nowhere.  At that time, of course, unemployment lasted 6 months.  If all will recall the terrible policies of the evil Bush admin typically ran unemployment around 5%.  I realized that my age and qualifications exempted me from many of my job applications and so I applied for entry level.  That too failed as I'm sure they felt that once hired I'd take the first decent job offer (i.e. one matching my skill sets) and leave them high and dry.  When I finally got an interview for a near entry level position, I looked the supervisor straight in the eye and swore to him that I would give him at least 2 yrs of service.  I basically had to do a sales job.  He appreciated that and hired me, albeit for far less than what I had been making but unemployment had run out and I had no recourse.  This all happened with an unemployment percentage much lower than today.  I pray that your misfortune will get resolved as I pray that this marxist, who RULES as if we only have one branch of government and that the constitution is meant to be a doormat, will be shown the door by an overwhelming number of freedom loving Americans who know that reliance on an all powerful central government leads to subserviance of us all.
Jul 13, 2012 10:43PM
I retired a year earlier then planned, because my organization moved to another state and I didn't want to move and uproot the family. Glad I did, 'cause I'm really enjoying the free time and am also volunteering.
Jul 13, 2012 7:43PM
If you become disabled before retirement the system bleeds you dry.. Use the ADA act and sue these companies.. who violate the law..
Jul 16, 2012 6:38AM

What a poor article! First, don't you think it's premature to deem certain skill sets- inept? We will need manufacturing, we may not need button pressing. Second, tons of 55+ year olds are still working the same job they had at 18. Prison sentences are shorter. Bank analysts recommended job cuts and the big corporations shipped jobs overseas. As those jobs return, kids with devices aren't going to do well in them, so skill sets who consult and oversee will be critical. Job blockade has been rampant. It was very clever to shift job postings online and send resumes into a Black Hole. Now that skills are needed again, there is no portal for recruitment. The BEST advice for all is to gain self-employment skills and to form a business entity. America will need millions of new businesses to wipe-out these platforms that crashed the nation. I suspect the future will not be so much politically charged as progress charged. It makes too much sense to not tolerate political agenda and reform every bastion of buffoonery where wealth manipulates without equality.

Jul 14, 2012 5:01PM

Not only are they  retiring earlier, many are adopting the Smith and Wesson Retirement plan.  Nice yeah?  No, suicide is not generally reported in the news unless its a celebrity.


My nephew is in law enforcement and he says, they are getting twice as many suicide calls as opposed to just a few years ago.

Jul 16, 2012 7:06PM

What is with these people who think they can advertise a dating site on here? Seems they do not have  the intellence to enter into a discussion regarding an issue on here. Way too many idiots and crazies on here.

Jul 16, 2012 6:10PM
This article sounds like a bad fortune cookie. Nobody gets close to retirement age without already having thought of these things. It is annoying to have to in your face though, David Downer.
Jul 16, 2012 2:42PM
With the coming 2013 2nd Depression we will all be RETIRED EARLY, even the ONE-PERCENTERS that got us in this mess in the first place!!
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.