The Constant Struggles Associated With Early Retirement

Barbara Hawley had a thriving business as a Chicago-based technical writer, until 2005 when she was abruptly forced into early retirement in an effort to keep her freelance business afloat. For four years, until Hawley reached the full retirement age (FRA) of 66, when she was eligible to receive full retirement benefits, she struggled to make ends meet.

"I had to question if I could spend more than 20 dollars per week on groceries and if I could afford to drive my car places. When my computer went down, I could not hire someone to fix it, I had to do it myself. I would buy one ream of paper at a time. It was a constant struggle to make this formula work," Hawley says.

Early retirement at 62

Sadly, Hawley's story is that of many aging adults these days. Due to the struggling economy and the downsizing of many businesses and positions, more and more older Americans are finding themselves in an unpleasant position: They are being forced into early retirement.

In 2005, Hawley found herself with almost no income, because technical writing was being outsourced overseas, while younger, cheaper workers were entering the market at a rapid pace. Hawley drained her savings, and when that money was gone, she took early retirement and the guaranteed monthly government funds, just to keep her business afloat. "Everyone in the writing world uses Macs and I use an IBM. It was one thing after another, and I needed cash flow to keep the business going, so I had to take early retirement."

Full retirement at 66

According to the government and the Social Security Administration, at the age of 66, you become eligible for full retirement benefits, meaning that you can receive Medicaid and that there is no cap on the money that you can make in a given year. The Social Security Administration's website states:

Starting with the month you reach FRA: "You will get your benefits with no limit on your earnings."

Making early retirement work

On the other hand, if you take early retirement at 62, there are a lot of rules to follow -- many of which make it harder, not easier, to make ends meet. Yes, you get a monthly stipend to cover your expenses (living, utilities, groceries etc.) but it is often less money than many people are used to making in a given month. Further stressing the situation is the stipulation that from age 62 until FRA, you can only make $14,160 per year; otherwise the SSA will take $1 for every $2 that you make.

The income that Hawley received every month from the SSA was drastically less than the amount she made as a technical writer with a thriving business. In order to compensate for her reduced monthly income, Hawley was forced to take a part-time job as a cashier making minimum wage, a job she had to beg to be hired for.

But the back-breaking part-time work presented the problem of making sure that she was not making more than the regimented $14,160 per year, or else the government would start penalizing her and taking some of it away.

Learning to go without

Hawley says that during this four-year period, she learned to go without, just to keep the balance. She never called repairmen because she cold not afford to. She ate differently because she couldn't spend money on food and gas; it was one or the other. She never bought anything in large quantities or bulk, but only as she needed, when things were gone or an absolute necessity because she just didn't have the money to spare. Hawley quickly learned the difference between really needing things and just wanting things. "During this time I couldn't market myself or the business to make the kind of money I needed or deserved as a technical writer. I didn't know what I was doing frankly, and the system is just a mess."

Rebuilding and getting back in the game

Hawley is past it now. She has reached the end of that long and grueling four-year stint between early and full retirement age. Now she is able to get government benefits and assistance, and go back to making as much money as possible as a technical writer, but there are still hurdles to surmount.

"During those four years, the system is downgrading you, and then you have to figure out a way to get back in the game; but the game is not open to you because of your age, and the game has changed," Hawley says. For the past four years, her technical writing business has been dormant. Once she starts marketing herself and her business again -- which will take some time -- Hawley has to prove that she is capable of doing everything that she did before. She needs to upgrade her skills, and keep refining her business so that she can stay competitive and build it back up to what it once was.

A plan is crucial

"What is sad, and what I find particularly difficult is that I self-taught myself most things during these four years, but how do I prove that to an employer? How do you show an employer that you are credible if you have been working as a cashier?"

Hawley has weathered the worst of the early retirement storm and has moved on to the next phase of rebuilding her life and her business, but she wants others to know that "you have got to plan and realize what you are in for, because it is not a piece of cake, and you need more than retirement funds to get you by."

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