Watch out for retirement curveballs: sometimes the road ahead is rough. Here's how to prepare in case it takes a sharp turn.

Author:Nance-Nash, Sheryl

ROBERT JACOBS HAD PLANNED TO RETIRE BY NOW. BUT FOUR YEARS AGO HE WAS laid off from his job as a national account sales manager for a manufacturer of photographic paper, ink, and chemicals. Jacobs didn't find a job right away and briefly worked as a financial adviser with Edward Jones Investments before starting a retail sales and marketing consulting company in 2009.

"Now I don't know when I might actually retire," says Jacobs, 60, whose business is in Emeryville, California. Jacobs had originally planned to stop working at 63. His goal was to have accumulated $1.7 million in his portfolio. "The bottom line is that for the past four years, instead of contributing to our investment plan, we've had to use some of the money to live."

Although Jacobs's wife, Josephine, increased her hours at work, the couple still had to dip into investments to pay bills. Jacobs earned $25,000 his first year in business and $39,000 the second. But much of that money was plowed back into the business and used for living expenses, so retirement took a backseat. Also, the couple has a young child--6-year-old Liam. But college savings is also on hold. "We started putting $200 a month in 2006 into a 529 savings plan, but we had to stop contributing in 2009 shortly after the layoff," says Jacobs. While he expects to gross about $100,000 this year, he's playing catch-up. "At a time when I'm supposed to be retiring, I'm building a new business."

Jacobs is hardly unique. The magic retirement age of 65 has gone the way of the defined benefit pension plan and is now mostly a relic of the good old days. The Great Recession brought job loss and sank home prices and investment portfolios. It also delayed retirement and in some cases precluded it. The number of people who expect to retire before age 50 dropped from 50% in 1991 to 24% in 2012, according to the 2012 Retirement Confidence Survey from the Employee Benefit Research Institute and Matthew Greenwald & Associates.

Americans dream about retirement, but saving for it is another matter. According to the survey, 60% of workers have less than $25,000 in savings (a retirement calculator such as the one at can help you see if you're on track). It's not surprising then that when the unexpected happens, one curveball is enough to put retirement on hold. Here are three surprise scenarios and ways that you can successfully work around them.


Retirement Curveball: Unexpected Layoff

A pink slip can...

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