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How to Survive an Unexpected Early Retirement

By U.S. News & World Report

Many people think that working longer is the simple answer to bridging the gap between insufficient savings and the financial needs of retirement. According to a 2016 survey by the Employment Benefit Research Institute, the proportion of workers age 25 and over who plan on keeping their jobs past 65 has increased from 11 percent in 1991 to 37 percent in 2016. Another quarter of workers expect that they won’t retire until age 70 or beyond.

[Read: How Working an Extra Year Improves Your Retirement Finances.]

But these expectations may be wishful thinking. Another study from the University of Michigan found that 37 percent of respondents failed to reach the retirement age they had set when they were in their mid-50s. They were forced to retire early for a variety of reasons, such as a health issue, a layoff or pressure from family or friends.

So what do you do if you planned to work until 68 or 70, then you suddenly find yourself unemployed at age 58 or 60? Here are some suggestions.

1. Be prepared. You have to realize that, yes, it can happen to you. So, the sooner you start taking retirement seriously, the better off you will be. Even if you have a pension, open up an IRA and sign up for your company’s 401(k) plan, salt away extra savings if possible. Buy a house, rather than renting all your life. Real estate appreciates over time, and rent money is gone forever. Take care of yourself by eating right, exercising regularly and getting your checkups, because the number one reason for forced retirement is a health issue. And while you’re at it, take care of your skill set. You may not always have your old job, so update your skills, learn new ones and keep networking, so if you do get laid off, you have people to call and places to go.

2. Look for a new job. It’s no fun job hunting after age 50, especially if you’re interviewing with someone younger than your own children. But don’t get depressed; deal with it. Remember, you have valuable assets, such as experience, contacts and maturity. But it’s a new gig economy, and you’re competing with people who are younger, faster and more technologically savvy. So swallow your pride. You may have to take a new job with less pay. I know more than one person who was laid off, then hired back by their old company — to do the same job for less money. But sometimes the new arrangement also comes with more work flexibility and no more commuting to an office.

[Read: 10 Jobs You’re at Risk of Losing as You Age.]

3. Work for yourself. There are opportunities to make money if you can’t get a traditional job. Consider freelancing in your old industry, perhaps even for your old company. Maybe you have skills that are transferable to a different field. Perhaps you can turn a hobby into a paying proposition. I know several people making decent money selling their wares on Amazon and Etsy, and others renting out rooms on Airbnb or HomeAway. One friend of mine, a lawyer, was a fitness buff. After the crash he got a part-time job at a health club. Now he’s turned down several job offers to stay at the health club as a full-time employee.

4. Gather your resources. You can tap into your retirement funds without penalty at age 59 ½. You’re eligible for Social Security at age 62. You may not get as much per month at age 62, compared to waiting for full retirement age, but some people can’t wait. Think creatively about money. Do you have assets, such as a weekend home, a boat, a collection or an extra car, that you can sell? You not only get the money from the sale, but might also lower your ongoing expenses. Do you have an adult child still living at home? Maybe it’s time to start charging rent. The point is to look around and seize the money-making opportunities that you didn’t even consider before.

[See: The Best Cities for Retirement Jobs.]

5. Change your lifestyle. If your kids are in college, maybe they’ll qualify for more financial aid if you’re no longer working. You might not need your house in the suburbs with the high real estate taxes and good school system you no longer use. Cut out things you no longer need, whether it is the membership to a pool and tennis club you had for the kids or the expensive vacation that was never as much fun as you thought it was going to be anyway. You’re not diminishing your lifestyle, but adjusting to a new reality. A less lucrative but perhaps less stressful lifestyle will help prepare you for full retirement in a few years.

Tom Sightings is the author of “You Only Retire Once” and blogs at Sightings at 60.

More from U.S. News

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How to Survive an Unexpected Early Retirement originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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