Accidental retirement is an option for some

There is something I've known for a long time but haven't wanted to share. Yeah, I withhold stuff from you. Look, certain things just aren't right for public consumption. But I'm going to break my rule on this topic because I think you are ready to hear it. Some people are very lucky and are able to accidentally retire. Yes, this goes against everything I've ever told you. I've been on you for years to wake up and pay attention to the realities of retirement. But there is a chance, a very slim chance, that despite your lack of preparedness you could still retire.

So let's walk through this. How could a person "accidentally" retire? It all begins with your different streams of income. In retirement you have up to four streams of income. 1) Pension, 2) Social Security, 3) Your own savings and investments, and 4) Part-time or full-time work.

Here's how these income streams shake out for the accidental retiree:

- Part-time or full-time work: Working during retirement is an excellent retirement strategy for some, but it won't be a factor for the accidental retiree.

- Your own savings and investments: For the accidental retiree there is NO personal savings or investments.

- Social Security: If the accidental retiree is qualified for Social Security and they begin taking it early around age 62, they suffer a 25% reduction than if they had waited until until full retirement age of 66-67. But they will still receive around $1,200-$2,000 a month for the rest of their lives. This is what the accidental retiree does.

- Pension: One could easily argue that anyone with a pension and Social Security and nothing else could retire with no issues, so for the sake of making this example interesting we are going to assume that this accidental retiree also does not have a pension.

So there we go, this retiree only has ONE stream of income, Social Security. And yet they are still able to retire. How is this possible? Low expenses. If in pre-retirement a person has continually lowered their expenses and is able to survive on what little Social Security provides them, they would be fine. They would be retired with basically no effort on their part. Of course, there is a catch. This accidental retirement is fraught with risks. Need a new car? Go into debt. Have a medical emergency? Go into debt. House needs a new roof? Go into debt. Taking this route may enable you to retire accidentally, but your luck may end there.

All this to say, an accidental retirement is possible, but it won't be all golf carts and bingo games. This type of retirement won't be the type of retirement you see on commercials. It will allow you to stop working, but beyond that there is a lot that could go wrong.

I'm fascinated by this type of retirement. Of course, I don't recommend it, but it's sort of amazing that it even exists to begin with.

To hear more about this phenomena check out this segment from The Pete the Planner Show on WIBC or check out my Indy Star column about the topic here.