Senior man reading a newspaper at a kitchen table near a window

Mandatory retirement doesn't have to be a bad thing. It can be the start of a new adventure.

Sometimes, our retirement plans don’t work out like we think they will. In fact, according to a 2019 survey from TD Ameritrade, a whopping 50 percent of recent retirees left the workforce earlier than they wanted to. Many cite health issues, others were laid off or let go, and still more had newfound caregiving responsibilities for a parent or loved one.

Regardless of the reason behind it, early retirement can be difficult to deal with. Not only are there the mental and emotional holes it leaves behind, but there’s also significant financial stress that comes with it—especially if you’re too young to pull from your 401(k) or IRA without penalty.

Are you facing forced retirement? Not sure how to deal with all that comes with it? This guide can help.

1. Take a hard look at your expenses.

If you’re not at the financial place you hoped you’d be during retirement, then you’ll need to evaluate your living expenses carefully. First: Your home. If you’re still living in a big house and your kids are long gone with families of their own, downsizing might be your best move.

For one, maintaining, powering, and cooling a smaller property will help reduce your expenses. If you’ve already paid off your mortgage or you have a significant amount of equity in the home, it could give you some extra cash to work with as well. (Additionally, moving might allow you to lower your property taxes, costs of living, and other expenses.)

You should also look for other ways you can downsize and cut back. Could you start shopping at big box stores like Costco and Sam’s Club to save on groceries? Could you ride the bus more often to save on fuel costs? Put together a spreadsheet of all your monthly expenses and see where there might be some wiggle room.

2. Consider a side hustle or part-time gig.

Just because you were forced into mandatory retirement doesn’t mean you have to resign yourself to a life without employment. Consider finding a part-time job or taking up a side hustle. Local libraries, museums, movie theaters, and other facilities are always looking for extra help, and they’re pretty relaxed, low-key jobs too. 

If you have a special talent or skill, you could go the entrepreneur route. Sell your knitted scarves on Etsy, offer math tutoring to local school kids, or clean houses if you’re a self-proclaimed neat freak. There’s always Uber, Lyft, Shipt, Favor, Rover, and the countless other gig jobs you can consider as well.

3. Avoid tapping that 401(k) or IRA.

It can be tempting to pull from your 401(k) and IRA accounts once you’ve been forced into mandatory retirement, but unless you’re over the age of 59.5, then you’ll pay a pretty penny for doing it. Withdrawing early will not only lower your account balances, but it will hinder how much you stand to earn over the next few years, ultimately creating more of a financial headache down the line.

If you have a partner who’s still employed, your best bet is to reduce expenses and attempt living as a one-income household until you’re of qualifying retirement age. Getting a part-time job (as mentioned above) can also help alleviate some financial stress.

4. Get involved in the community.

Money’s only part of the struggle when you’re dealing with forced retirement. You also need to keep your mind and body occupied if you want to stay happy and healthy in your newfound lifestyle.

To do this, you can:

  • Join your local community or senior center. These typically offer tons of programming, from dance and language classes to game nights, book clubs, and countless other activities. They’re a great way to make friends and also stay active.
  • Volunteer. Volunteering can keep you busy while also giving you a way to help others in your community. Here are just a few of the facilities/programs always looking for volunteers: Meals on Wheels, Boys and Girls Clubs, The Salvation Army, local food banks, the Humane Society, Habitat for Humanity, the YMCA, and more.
  • Get on your HOA, condo, or community board. Live in a tight-knit community? Join the local HOA or condo board and have a say in what goes on in your neighborhood. You might meet some new neighbors in the process.
  • Take a class. Most local colleges offer continuing education courses, where you can study up on everything from computers and gardening to literature and foreign language. Check out your local educational facilities to see what’s out there.
  • Find a social club. There are dozens of social clubs designed just for older adults. Like to walk? Join your local Silver Sneakers group. Want to meet other women your age? Try the Red Hat Society. A big fan of travel? Road Scholars might be your best bet.

Forced Retirement Isn’t the End of the Road

It’s easy to think of mandatory retirement as a negative thing. But really, it’s just the start of a new adventure. As long as you assess your finances carefully, keep your mind and body active, and have a good handle on those expenses, you’ll have a long road of happiness and health ahead of you.