You are in your early 40s, no sorry, even better you are 38 years of age and you have started investing. Congrats.

You are on your way to save/invest for your children’s education/marriage and for your own retirement. You have started doing SIPs and you think you will hit your retirement target by your age of 60. Perfectly. You expect to finish all your non retirement work by the age of 55 years and you will pump up your retirement fund in the next 5 years.

Now life interferes.

Over the past 2 years I have spoken to a few people who have had to retire early. As early as 52 – and there are many reasons. The main reasons being: health, accident, or downsizing by employer. One employer was good enough to call a 54 year old and offer a salary cut – from Rs. 38 lakhs to Rs. 25 lakhs. This friend took it happily, realising that the outside world is far worse. However not everybody is so lucky. Once downsized a 53 year old will have to show tremendous skills to get a similar paying job. He will also have to show tremendous calmness to be doing jobs paying half that salary in a new place.

The financial challenges are simple – you need to live on a lesser corpus, make the corpus stretch that much longer, you miss the best portion of a salaried life – the highest contribution period! Also during this period you may have the social need for a job – daughter’s marriage for example. Couple this with poor asset allocation, sub par market returns, interest rate changes impacting debt returns and the ever hanging sword of longevity. Worse – longevity with less money than targeted.

How does one cope up with all this? Of course there is one thing to keep oneself occupied with some other skills – some kind of consulting, teaching, etc. Some of these activities could be for free but at least keep you out of the house and give you a feeling of being gainfully doing something.

Offer to do something with your existing employer or one of the vendors on a commission basis. A variable pay is something that many people are willing to consider. Try to save/ invest more and get the children to start contributing to the family expenses – your son/ daughter maybe of earning stage now. Of course things get worse if your children are studying in expensive schools and you are forced to reconsider the other educational options. However if it has to be done, it has to be done.

So the trick is – spend less, invest more, try looking for other cash flow sources (try downisizing the house or the location of the house), get children to contribute, encourage them to apply for scholarships,…..

Just remember man proposes, God disposes.