Layoff close to retirement: how to prepare for the threat of unplanned retirement

The retirement we have today is not the same as the retirement that our parents had. In many cases, this statement is coming to life through a concept called forced retirement, caused by a layoff close to retirement. A recent survey by the Urban Institute said that 56% of people over the age of 50 will be laid off before they have a chance to retire.

Unexpected unemployment can take a financial toll on you and affect your retirement savings goals. It can also take a pretty large mental and emotional toll.

layoff close to retirement

What can we do to prepare ourselves for the threat of a layoff close to retirement?

If you are approaching the 50 – 55 age range and/or have any ounce of suspicion about your job stability, start looking around, and start making a plan. It’s much easier to get a job while you have a job rather than when you’re unemployed. 

If your day comes, you want to make sure you’re ready financially as well. It’s important to take a look at your options and start saving money now. Later down the road, you’re not going to be able to finance your retirement plan.

Everyone wants to have a guaranteed income for life that we can’t outlive. You have to make sure you have a plan that is customized based on your goals and objectives and is going to last through your retirement years.

We now know that we can’t count on social security, and pensions can go unfunded because they are not guaranteed. However, when insurance companies enter into a binding contract with you and show you the income you will receive through an annuity, you are guaranteed that income. Don’t make decisions based on emotion, but on facts. You need to have an income plan, an illustration, and a binding contract.

We don’t have a lot of time in most cases to prepare for forced retirement or having a layoff close to retirement, but there is in fact a silver lining to this situation. 

If you’re 55 and currently working with an employer, you can’t touch your retirement fund, and you are limited to cookie cutter plans of where you can invest that fund. But once you’re asked to leave, you have the freedom to roll over your 401k accounts in a non-taxable event wherever you choose. This can be seen as a blessing in disguise. After you hit 59 and a half, you really need to look at rolling those funds over, taking control of your financial future, and making guaranteed lifetime income that you cannot outlive. 

Every day, people make life-changing and irrevocable decisions because they don’t have the advice and support they need to understand their options. Losing your job in your mid-50’s to no fault of your own can be scary. On the bright side, you have 30 or so more years to live, and you should make the best of that. Life happens, but when you have options and someone to turn to who will walk you through it, it makes things a lot easier. 

If you are experiencing retirement uncertainty or experiencing a layoff close to retirement, call Cathy at 972.473.4700 and let the financial experts at Dewitt & Dunn Financial Services sit down with you to learn your options and create a custom plan with your goals in mind.

Disclosure: For informational and educational purposes only. The information contained herein may contain information that is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor.


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