How to survive job loss
When you are in your 50s it’s a lot tougher
Losing a job is almost always traumatic. In your 50s, job loss can be devastating — and devastatingly common.
More than half the workers who entered their 50s with stable, full-time jobs were laid off or pushed out at least once by age 65, according to an analysis of employment data from 1990 to 2016 by the nonprofit newsroom ProPublica and the Urban Institute, a nonprofit think tank. Only 10% of those who lost a job ever found another that paid as much, and most never recovered financially.
Here are some tips to help navigate what could be your most dangerous decade:
1 Step up
It can be tempting to coast to retirement. But workers who aren’t adding skills are more likely to be laid off, says Susan Weinstock, vice president, financial resilience programming at AARP.
“If the economy tanks, they’ll be the first to go,” Weinstock says. “Staying current in your field is really important.”
She recommends older people take advantage of any training opportunities, volunteer for new assignments and become both “a mentor and mentee.” Weinstock also urges older workers to keep growing their networks, since most new jobs are found through someone you know.
2 Save more, save earlier
“Catch up” provisions were created to help workers supercharge their savings in the years before retirement. These set higher limits for workers to save to retirement plans. If you can take advantage of these provisions, great, but a better plan is to start saving as soon as possible and to increase your savings rate whenever you can.
You also probably need to beef up that emergency fund. The average length of unemployment for people 45 to 54 is a little over five months, according to the Bureau of Labor Statistics. For people 55 to 64, it’s just shy of six months. In a recession, those durations likely will grow.
3 Spend wisely
Limiting how much you owe as you age can give you more financial flexibility. If you’re refinancing a mortgage, for example, consider choosing a loan term that allows you to be debt free by retirement, if not before.
And while many parents provide their adult children with some financial support, ongoing handouts could jeopardize your financial health and theirs. Setting clear financial boundaries can help you wean them off the family dole.