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For many Americans, retirement has become a daunting prospect

What happens if you have planned nicely for your retirement date, but then your retirement date picks you?

Many Americans fantasise about retirement. They responsibly stash cash to fund the happy pursuits of their golden years, only to find retirement forced upon them, amid the chilling spectre of financial insecurity.

Gone are the dreams of moving to a nice house in Florida, close to the golf course and a good steak restaurant – not to mention dangling the carrot of a seaside holiday before the grandkids.

Historic redundancies and business closures – coupled with the stark reality that paltry returns have significantly diminished the value of invested nest eggs – have dulled retirement's sheen of possibility for vast numbers of Americans.

For some, it is downright terrifying – especially when they have not chosen it.

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According to the US Bureau of Labor Statistics (BLS), the number of unemployed people over the age of 55 is currently hovering around 7.3% – more than twice what it was in December 2007.

That figure is the highest the 55+ age group has seen since 1948, when the BLS began collecting its data.

'New unemployables'
Although younger workers are more likely to lose their jobs in this recession, once an older worker has lost his or her job, they are significantly less likely to find another one.

“Older workers have much greater difficulty reconnecting with the labour market,” says Carl Van Horn, who heads the John J Heldrich Center for Workforce Development at Rutgers University.

“For them losing a job is catastrophic.”
Losing a job can be catastrophic – financially and emotionally – for older Americans

Many of these people will never work again. Mr Van Horn calls them the “new unemployables”.

Catherine Collinson, President of the Transamerica Center for Retirement Studies, says an “alarming number of Americans” have not formally planned for retirement.

Most, she says, quickly discover they simply have not saved enough to fund their retirement.

American retirees are eligible for a Social Security benefit for the government.

But most workers are not eligible to receive the full benefit until the are 66. That is not much help if you lose your job at 58.

Transitional struggles
Dwight Moore, president of Lifeshift, a counselling company, says that after years of defining themselves in relation to their work new retirees often struggle with questions of identity.

Imagine you are at a party and somebody asks what you do. What happens when you do not want to answer?

“It's not sufficient from a self-worth perspective to say I am retired or I got laid off,” Mr Moore says. “Some people feel embarrassed. For others it's worse: shame, despair, depression.”

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In retirement, you lose all of the people that you used to hang out with at work. That can be pretty difficult, especially for men. Women are more adept at having social networks'

Dwight Moore
President, Lifeshift
Mr Van Horn's research suggest that for most people who are laid off, the news comes quickly, leaving little time to mentally prepare for the psychological minefield ahead.

New retirees often face the daunting task of filling the rest of their days, an especially pronounced fear for people accustomed to a life of blackberries, meetings and schedulers.

Mr Moore says many trades people end up in the informal economy, falling back on their skills to do odd jobs or favours for friend and neighbours.

They often do not do this for cash or tax reasons, but to have a sense of purpose and a connection to their community.

Early retirees have created a cottage industry of sorts, which also doubles as a way of combating loneliness.

“In retirement, you lose all of the people that you used to hang out with at work. That can be pretty difficult, especially for men. Women are more adept at having social networks. Men get isolated,” Mr Moore says.

It can also be a strain on marriages. Many couples have a difficulty adjusting to having a spouse that is always around. They are not sure how to cope with so much time together.

“They married for better or for worse, but not for lunch,” Mr Moore quips.

Historic debt
The financial burden of early retirement is unquestionable, but in America, historic levels of consumer debt have made it almost unbearable.

David Jones, President of the Association of Independent Consumer Credit Counseling Agencies, says financial counsellors are increasingly seeing people retiring with $60-$70,000 (£39-£45,000) in non-mortgage related debt.

“There's going to be drastic changes for a lot of these people. They're not going to have premium cable TV and cell phones. They'll stick with a used car and keep it for ten years,” he says. Many opt for bankruptcy.

“The thought of these people having a comfortable retirement, it's not going to happen.”

It seems that message is sinking in.
In a 2010 survey by the Transamerica Center for Retirement Studies, only 7% of full-time workers said they were very confident that they will retire with a lifestyle they consider comfortable.

In 2005, that number was 25%.
'Nobody needs me'
Perhaps the deepest scars for the early-retired are emotional ones.

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One of the saddest things in the world is when you finally know the answers to some of the questions you've been asking your whole life, and suddenly nobody is asking you those questions anymore.'

Jean Coyle
Unemployed Presbyterian Chaplain
Many parents are stricken with shame about becoming financially dependent on their children.

In Mr Van Horn's research, being economically reliant on your children is second only to the death of a spouse in terms of grief amongst older people.

For Jean Coyle, an unemployed 65-year-old from Virginia with three degrees in sociology (including a PhD), the worst part of being laid of late in life is the “psychological blow of feeling like nobody needs you”.

Ms Coyle switched careers in her fifties, becoming an ordained Presbyterian minister. She was laid off three years ago after her church suffered financial hardship.

“You feel discarded,” she says. “I feel totally invisible. I don't foresee any immediate or even long-term answers because I'm only getting older.”

She described the pain of opening up her e-mail day after day, only to receive snippy rejection emails, telling her she did not match an employer's needs.

Ironically, when Ms Coyle was a university professor she taught her students about the challenges of an ageing society.

She used to tell her students that “one of the saddest things in the world is when you finally know the answers to some of the questions you've been asking your whole life, and suddenly nobody is asking you those questions anymore”.

“I'm living that now,” she says.

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