Is Unemployment the New Retirement?

Over the Thanksgiving holiday I had the opportunity to return home and spend time with family and friends. One of the reasons I love New York is because of the diversity of its inhabitants, and there was no shortage of catching up with a fantastic group of people. The economy being what it is, and my career being in personal finance, lent itself to some interesting topics of conversation. When speaking to several of my unemployed friends, the subject of employment scarcity took center stage. Some of these folks have been out of work for more than a year and were seriously losing hope as to their future prospects of both employment and retirement.

Many of us will not be living our parents or grandparents retirements. Incomes have been stagnant, and many workers are beginning to realize they will need to be employed well into their golden years.  The millions of Americans who are unemployed at the moment face an altogether different reality.  Many of those I spoke with have raided their 401(k)s, and if they’re lucky enough to have anything left, it is very little; therefore, when they go back to work they will essentially be starting retirement planning from zero.  With this realization, the prospect of retirement seems as likely as taking tea with the Queen of England. Think about it, if someone has been saving for retirement since their early 20s and had to completely exhaust their funds because of an extended stretch of unemployment, how much longer are they going to have to work to recuperate?  That being the case, some are taking the opportunity to enjoy their unemployment and treating it as their retirement.

As human beings, we tend to quantify certain events within our own minds so we can achieve a level of peace with them. However, looking at unemployment as retirement can be hazardous. First, it’s important to recognize that individuals work for more than just money. As we see with many retirees, people return to the workforce because they feel they have lost a sense of purpose. Realistically, donating one’s time to a worthwhile charity can alleviate such feelings; however, people like my grandfather had “work in their veins.”  While this is a tough enough battle in our golden years, it can be downright debilitating for someone who has lost their job. Therefore, I’ve routinely recommended those in extended periods of unemployment donate time to recapture that sense of self. This is a temporary measure and is always followed up with a perseverance chat. There are additional benefits to donating one’s time which was made evident when one of those I counseled actually secured employment with somebody they met during their volunteer efforts. While taking the time to help others enhances society as a whole, it can provide much-needed footing in troubling times as an individual cultivates their self-esteem.

Another important aspect to realize about unemployment is that you are losing wealth each and everyday. As I mentioned, many of those I’ve spoken with have already raided their 401(k)’s.  I find it to be catastrophic to deplete what may be one’s only source of retirement funding. While some of these individuals used the funds to survive, others used it to fuel their new retirement lifestyle. I can understand the temptation to a certain extent. George Bernard Shaw once said “youth is wasted on the young.” I tend to agree with him. In our modern culture we expend a great deal of our youth trading leisure for wealth building. When we are finally old enough to enjoy our lives, typically in our retirement years, we have the wisdom to appreciate the world, but often lack the energy to see at all.

Some years ago I read an article which made the argument to provide an individual with his or her entire earnings in their early 20s so that they may enjoy the wonders of the world. When 40 rolls around, that individual would then go into their career and put forth the labor associated with the earnings provided 20 years prior. While this concept sounds enticing, I know plenty of 20 year olds that would be broke by the time they turned 21. However, wouldn’t it be interesting to have the ability to experience the entire world when you are at your peak? Therefore, I see the allure of living in retirement lifestyle while unemployed; however, I also understand that it’s not plausible.

Unemployment can be both mentally and financially debilitating. However, it is not a time to neither lose hope nor entertain fanciful whims. Sure, everyone needs a break, especially those that are fighting to reenter the workforce. Several of the unemployed I know hold full-time jobs – they are Professional Employment Seekers. They spend countless hours searching job boards, making phone calls and networking. The process is frustrating; therefore, the need to relieve stress is paramount. However, perseverance is a necessity to regain employment. A long-term deviation into adopting a retirement-like mindset will only exacerbate the situation.

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About Cambridge Credit Counseling Corp.

Cambridge Credit Counseling Corp. offers its financial education to consumers throughout the United States. Our experienced staff is dedicated to helping people understand and manage their debts by providing personalized attention and a free, comprehensive review of each consumer’s financial situation. It is our objective that, as consumers become more educated about debt and the impact it can have on their lives, they can apply this knowledge to successfully manage their finances in the future.

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