Losing a job in your 50's...

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Losing a job in your 50's...

Post by CyclingDuo » Sat Feb 16, 2019 10:34 am

This topic comes up every now and then here at Bogleheads.org, but I thought I would point out a recent article and podcast discussing the issue and the three important steps to take as soon as news of a layoff hits.

The author is Pete Dunn who now writes for USA Today. Here is Part 1 of his 2 part series on losing your job in your 50's:

https://www.usatoday.com/story/money/co ... 873673002/

Yahoo Finance also did a repost of Pete's article here:

https://finance.yahoo.com/news/losing-j ... 03710.html

Pete also has his own blog. His blog is "Pete the Planner". Here is part 1 of his 2 part podcast on losing your job in your 50's.

https://petetheplanner.com/ep-299-losin ... -your-50s/

Having thought I had adjusted over the past year, I was a little blown away how reading Pete's article yesterday rekindled some feelings and thoughts (wounds) that obviously are still relevant to me.

Personally, I am approaching the it's now one year later point at the end of February when I first got the news in 2018 of a layoff at age 56. KlangFool often talks about the issue of layoffs one may face as they age, and how best to plan for it. I now can attest to the importance of planning and dealing with navigating through a layoff in your 50's. I am not wishing it on any fellow Bogleheads to say the least, but rather posting just to let others know it can happen and some steps to take if and when it happens.

The main three points he mentions in terms of what to do right away when the news hits...

1. Figure out exactly when the income stops coming in.
2. Figure out when any benefits kick in and for how long (severance - if any - and unemployment).
3. Figure out what non-essentials you can cut out of your expenses to hunker down.

Although those all seem fairly normal things to execute, his work with financial planning and speaking with people that get hit by layoffs in their 50's surprisingly show how many - for a variety of reasons - don't think of addressing those three items immediately.

I probably should sum up the year I have just been through a bit below, but suffice it to say I felt Pete's article had some excellent thoughts.

I did in some shape or form manage to attack those three items that Pete raised - although not within the first few minutes or days as he suggests. Eventually as the shock and reality set in, I addressed them. He raises plenty of other points in his article that go deeper into the psyche of dealing with the layoff as well. Those are not actionable, so no need to discuss them beyond mention.

What is actionable and what I did when hit with the layoff news...

• Found out when my final paycheck was and had HR immediately switch my 403b contributions so I could hit the max plus catch ups for the over age 50 crowd for the year before the final check. I knew it could be, and most likely was my last chance to do this, so wanted to take advantage of it with the remaining paychecks I had to work with in my final months.

• Applied for unemployment the day after my final day in May.

• Combed over our budget in the months after the layoff news and before the final paycheck to see what non-essentials could be cut. In other words, used the opportunity to do a reset on cash flow as if our household was moving from a dual income household to a single income household, or at the very least - a lower income than before. Was able to cut several hundred per month from our non-essentials with the potential to easily cut nearly $150-250 more per month if need be. Adjusted our lifestyle in terms of vacations, travel and eating out to reflect a drop in income as well (hunkered down a bit, but not totally).

• Made sure replacement income was organized as best as I could if need be via the dividends from our taxable portfolio (so far have been reinvesting all of them the past few years, but they are lined up as replacement income to meet household expenses if need be). Special thanks to Bruce Miller (Boglehead member) on his book and help. Special thanks to our TIAA Advisor who has helped guide us to get proper dividend payers (such as REITs) into Roth and BDA IRA space as well.

• Made sure to also max out an additional 457b plan in my spouse's employer plan with over age 50 catch up contributions to help cut the household taxable income down enough to avoid paying taxes on the dividends from our taxable account. This coupled well with our reduction in non-essential expense cuts.

• Made sure all Health/Dental/Vision Insurance was covered on spouses's plan.

• Took unemployment money for the three months and invested it for retirement.

My job went from a single employer after 15 years with full benefits that ended in May, to two part time jobs to wrap up 2018, moving to three part-time jobs in 2019.

• Landed a part-time job with benefits (401k plan, ESPP, life insurance, 50% discount on one of our monthly bills).
• Landed a part-time job with no benefits teaching in my academic area.
• Landed an additional part-time job with no benefits teaching in my academic area in 2019.

Thought my base salary would suffer by up to as much as -$10K as a result, but wages/salary ended 2018 up $2K over the prior year. 2019 is looking like it may have the potential to match or exceed 2018, but having been through the last year I remain conservative.

Any of the other non-actionable elements Pete raises in his story and podcast certainly remain part of my mindset, but I'm doing my best to move on from them as I have no other choice with regard to dwelling on thoughts of getting older (ageism), irrelevance, emotions, how my increased hours due to juggling of multiple positions impacts my time, energy, focus and relationship with my spouse, etc. If anything, starting to feel a bit more fortunate that our financial plans remain on track and I have been able to get OMY (one more year) under my belt after the bad news of a layoff hit me. One year at a time.

Actionable items wise, will continue to keep a lid on non-essential expenses, and sock away a higher percentage of savings than we originally were doing say two or three years ago when we thought both of our jobs were secure until a retirement date of our choosing. New eyes. New experience. New thoughts. New plans.

I would be interested to hear thoughts and experiences of others who dealt with the difficulties of the downsizing/layoff in their 50's mid-career.

Example: My first job interview post layoff that I actually was interested in (great company!), the manager - with one side of her head shaved, and the half with hair in multiple colors as well as various pierced holes and things on her face and up and down her ears - used the word "vibe" and "awesome" a total of 10 times within the 10 minute interview. I was dressed well, focused, and on topic. I'm 6'4", weigh about 185 and am in excellent shape (lift weights 2x per week, ride bikes religiously, eat healthy, etc...) and her main concern she kept raising was if I would be able to lift up to 50 pounds. Without using any words like "vibe", "totally", or "awesome", I informed her it wouldn't be a problem. I mentioned my warm up lifts for dead lifts and squats every week start with reps of 165 pounds, and then I move up into the 200's. Obviously, I couldn't see through her "armor" and she couldn't see through mine. I didn't get the job, but it was a wake up call to reality of what I was about to face outside of the academic environment and being age 56 at the time.

I started reading, practicing, taking notes, and hunkered down to improve my resume, my interviewing skills, my connections, and became a little more selective in exactly what I was applying for while on unemployment. There were quite a few other similar interviews with their own unique oddities compared to what I have been used to in years past within the performing arts and academia disciplines, but the point being it was a reality check for me to learn - even in the midst of all the woes that come with a layoff - a new direction.

One has to take actionable steps on the financial side of the equation both in preparation for a possible layoff, as well as dealing with an actual layoff. And one has to take actionable steps as well when facing a job market in your 50's if continued employment is a goal.

Time to shower and go to my weekend part-time job. :beer

Edit: Wanted to add some additional reading with data on those in their 50's and job loss here:

AGE DISCRIMINATION
If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours
A new data analysis by ProPublica and the Urban Institute shows more than half of older U.S. workers are pushed out of longtime jobs before they choose to retire, suffering financial damage that is often irreversible.
https://www.propublica.org/article/olde ... retirement
Last edited by CyclingDuo on Thu Feb 21, 2019 9:23 am, edited 1 time in total.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

mancich
Posts: 685
Joined: Fri Sep 05, 2014 2:05 pm

Re: Losing a job in your 50's...

Post by mancich » Sat Feb 16, 2019 10:41 am

It sounds like you've taken a proactive approach and are to be commended for this, as well as what seems to be a healthy attitude.

User avatar
willthrill81
Posts: 12789
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Losing a job in your 50's...

Post by willthrill81 » Sat Feb 16, 2019 10:56 am

Yes, that was a good podcast episode. I enjoy Pete's take on things. He's much more balanced than many others, especially Dave Ramsay.

Kudos to you CyclingDuo for stepping up and getting back in the game. You've demonstrated that losing a job in your 50s is not necessarily the end of the world.

That being said, this issue, amongst others, is one of the reasons that I'm really trying to reach financial independence by age 55.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

KlangFool
Posts: 13422
Joined: Sat Oct 11, 2008 12:35 pm

Re: Losing a job in your 50's...

Post by KlangFool » Sat Feb 16, 2019 11:05 am

OP,

I shake my head when the 30 something assumes that they will be fully-employed when their kids go to college. With that assumption, they cut down their retirement saving and put a substantial amount of their money into the 529s.
Then, they are in their 40s and 50s. And, they were laid off while their kids go to college. They can no longer afford to spend that amount of money in college education. But, they are stuck.

On top of all this, many of those folks did not max up their tax-deferred accounts. Hence, they were paying the full marginal tax rate in order to put their money into the 529 for the "tax-free" growth.

But, I am fighting a losing battle anyhow. Why and how would a 30 something believe that they would not be employed continuously until retirement age? Those unemployed and under-employed 50s folks must be lazy and not up to date and so on. This does not apply to me. Age discrimination only applies to others.

KlangFool

User avatar
willthrill81
Posts: 12789
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Losing a job in your 50's...

Post by willthrill81 » Sat Feb 16, 2019 11:19 am

KlangFool wrote:
Sat Feb 16, 2019 11:05 am
OP,

I shake my head when the 30 something assumes that they will be fully-employed when their kids go to college. With that assumption, they cut down their retirement saving and put a substantial amount of their money into the 529s.
Then, they are in their 40s and 50s. And, they were laid off while their kids go to college. They can no longer afford to spend that amount of money in college education. But, they are stuck.
And to add insult to injury, the 529 accounts count against them for the purposes of receiving financial aid, unlike retirement savings accounts.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
Watty
Posts: 17062
Joined: Wed Oct 10, 2007 3:55 pm

Re: Losing a job in your 50's...

Post by Watty » Sat Feb 16, 2019 11:41 am

You might want to put all your information together in a "Being laid off in your 50's" wiki.
CyclingDuo wrote:
Sat Feb 16, 2019 10:34 am
I would be interested to hear thoughts and experiences of others who dealt with the difficulties of the downsizing/layoff in their 50's mid-career.
I worked in IT where layoffs were always a risk and finding a new job in your 50's can be challenging.

Other than one brief layoff in my 20's I was able to get through my career without being laid off again but in one merger my office was closed and I had the choice of being laid off or relocating to the other side of the country. That was when I was in my late 40's. I opted to do the relocation because the local job computer job market after the dot com bust was bad and companies were also reducing computer staff after the Y2K crunch was over. There were a lot of trade offs but there were also some advantages to the new location but overall it worked out well.

The location I moved to is lower cost in general and for a retired person the income and property taxes are a lot lower so being here made my numbers work a lot better for being able to retire just before I turned 59.

I can't count the numbers of other layoffs I have been through though. It will vary with the situation but one thing to keep in mind is that often the people that survive the layoff will have a worse work environment because they are expected to fill in for the people that were laid off and the there may be gaps in skills and knowledge that the laid off people had. One problem I have seen a number of times is that in a layoff the remaining staff will be cut to the bone and be able to function but then someone will be out sick or on vacation and the remaining staff will be in an even worse situation. Be cautious about envying the people that were not laid off.

User avatar
Kenkat
Posts: 5154
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: Losing a job in your 50's...

Post by Kenkat » Sat Feb 16, 2019 11:44 am

This article really resonated with me. I just turned 55 myself and have been at my current company for what I can’t believe is 21 years. I’ve been through the post-911 bust, a merger, and the 2009 financial crisis. So, in other words, battle scarred but still employed. But I do get a sense that the winds of change are in the air as there are a lot of new people with new ideas, some good and some bad. My cheese has been moved recently as the area I work in is changing focus. I don’t feel like a good fit to the new focus. Anxiety and worry ensues. What if I end up being moved aside? I have seen it happen enough already to others. And the thing is, I still see the old cheese - it’s in the next room and it’s beginning to rot as the new people struggle to understand all the history behind the cheese and why it is the way it is. The company still relies on that cheese to operate.

When I was 30, I just assumed I would work until I was 65. But as you get older, you realize that may not be possible or you may not want that. I have been fortunate that I have saved throughout my life. Am I financially independent at this point? I spend lots of time thinking about this. I would say I am at the point that I think with some confidence (80%, maybe higher but?), I could make it work. At the same time, it is in my best financial interest to stay employed for another 5 years at least, maybe 10 if I still enjoy the work.

On thing I have realized about getting to the middle 50’s with some substantial assets in place is that you have some options. In my current job, knowing I have options, I was much comfortable in approaching a senior manager I have worked closely with in the past and asking about re-aligning my position back to where I think I can really add the most value. This is not without some risk but knowing I have my finances in order helps to make it a risk worth taking. I think it’s going to work out but you just never know what the future holds.

CyclingDuo, I see you making this unexpected “situation” work. You have options. You are putting those options to work. It’s good to hear and I commend you. Thanks for the post and thanks to anyone reading my stream of consciousness above. It feels good to write it down.

sailaway
Posts: 744
Joined: Fri May 12, 2017 1:11 pm

Re: Losing a job in your 50's...

Post by sailaway » Sat Feb 16, 2019 11:51 am

My FIL was laid off in his 50s. They are thriving, but the experience was traumatic enough that when my now husband and I had our very first conversation about splitting finances, he offered to fund my IRA.

The psychological aspects may not be financial, but they are actionable. I wish more folks would seek counseling at the same time as they start the job search. Many people who choose to retire have a tough time with the transition; folks who get laid off have that life changing decision taken from them, when they may have thought they were at the height of their careers, often at the same time as the empty nest transition.

GuySmiley
Posts: 60
Joined: Fri Aug 10, 2018 6:02 am

Re: Losing a job in your 50's...

Post by GuySmiley » Sat Feb 16, 2019 12:03 pm

Excellent post OP. I am early 40s but always looking to be prepared for the future, good lessons in here.

User avatar
Cycle
Posts: 1398
Joined: Sun May 28, 2017 7:57 pm
Location: Minneapolis

Re: Losing a job in your 50's...

Post by Cycle » Sat Feb 16, 2019 12:08 pm

Make hay while the sun shines. Save in your 20s and unemployment will be a vacation, not a stressor.

For me, I disagree with point 3. I've already optimized my expenses so much that there isn't much fat to trim, ie the big levers have been pulled and are in effect regardless of employment status. Those levers are things like not owning a car, not living in a single family home, not having any debt/mortgage/rent.

Let's look at just one of these levers, not owning a car. Assume your car costs $10k per year (u get a nice one you've seen 10,000 commercials/billboards of). You buy it when u get your first job out of college at age 22.

If u opt to bike instead of drive the annual 10,000 in savings earning 8% over 34 years will total 1.7MM.

Let's say u would drive a beater at 5k per year, but opt to bike instead. The savings are still $800k by age 56.

The potential savings from living in a cheap house or duplex are even greater than foregoing a car.

Anyways, my point is cheap people pull the small levers like watching their grocery bill, making their own coffee, cutting back on eating out, skipping vacations, while still engaging in rediculously expensive luxuries, like owning a car and paying insurance/taxes/interest on a house they can't afford (ie they had to get a mortgage).

If you are aware of these levers early in life and take action, unemployment in ones 40s or 50s will be a vacation.
Never look back unless you are planning to go that way

cherijoh
Posts: 6287
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Losing a job in your 50's...

Post by cherijoh » Sat Feb 16, 2019 12:14 pm

CyclingDuo wrote:
Sat Feb 16, 2019 10:34 am
I would be interested to hear thoughts and experiences of others who dealt with the difficulties of the downsizing/layoff in their 50's mid-career.
Thanks for posting the links. A good friend (who just turned 60) is facing a layoff and I have been trying to help him out. I'm going to copy and paste your post and email it to him.

My mid-career change came in my mid-40s after working for the same company since graduating college. My site was being relocated to another company site - in a rural area (out of state) with a leadership team that was causing several people I respected to look elsewhere for jobs. I opted to take a severance package instead of taking the transfer they offered me.

Because of the need to construct additional office and lab space, I knew going in that the separation date would not be for a while. It ended up taking longer than I anticipated. Some people were released at the 6 month mark, but I ended up staying an additional 3 months. I had decided to go back to school to support a total career shift, so the timing worked out well. I left the company at the end of July and started on my masters in August. Including unused vacation, I ended up with about a year of severance paid out as a bi-weekly paycheck. In addition, I had used the time between signing the paper work and actual separation to trim expenses and build up my cash reserves. Thus, I didn't have any of the shock and panic that an unexpected immediate layoff usually causes.

My oddest interview experience was with a company that set up a half-dozen half-hour interviews with the hiring manager, his manager, HR, and a couple of people who would end up being peers (if I was hired). The interview styles were all over the map. One guy asked me no questions and barely let me get a word in edgewise. The HR rep was young and inexperienced. She asked me only a couple of questions, leaving about 20 minutes of the interview to fill. She answered what questions I had with "yes", "no" or "You'll have to ask the hiring manager that". One of the managers was using behavioral interview questions, but I'm pretty sure he had picked them at random from a list online. (I had gone to a workshop on behavioral interviewing and probably knew more about it than he did. :wink:) On top of that, I realized fairly quickly that the job wasn't really what I wanted, which made it difficult to maintain my enthusiasm.

I eventually ended up falling into a job at one of my target companies. A half dozen or more posting for jobs on their website had resulted in only 1 interview in the previous 2 years. But then a networking contact (who I knew through a support group for unemployed professionals and who been recently been hired at the company) was talking to a hiring manager who expressed frustration in filling a position. She was very proactive and asked what he needed and then recounted my qualifications. She called me with a request from the hiring manager to bypass the job tool on their website and to send my resume directly to the recruiter. I had a series of phone interviews followed by a short in-person interview and an offer the following Monday. (A total of ten days from finding out about the job to the offer). It turned out to be a good fit - this is the company from which I recently retired.

User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Re: Losing a job in your 50's...

Post by CyclingDuo » Sat Feb 16, 2019 10:00 pm

willthrill81 wrote:
Sat Feb 16, 2019 10:56 am
Yes, that was a good podcast episode. I enjoy Pete's take on things. He's much more balanced than many others, especially Dave Ramsay.

Kudos to you CyclingDuo for stepping up and getting back in the game. You've demonstrated that losing a job in your 50s is not necessarily the end of the world.

That being said, this issue, amongst others, is one of the reasons that I'm really trying to reach financial independence by age 55.

I know I have read posts of yours in the past with regard to issues of the "amongst others" as you mention above revolving around longevity. We are all in support of you hitting that FI goal by age 55!! After seeing a total of 25 professors being cut from our college in 2018, I can pretty much opine for all of them that we didn't see it coming.

I'm reading Larry Swedroe's excellent new book now (seems to be only a few pages at a time on break, or when I get a chance), but he mentions to have a lot of plan B's thought out and ready in the wings.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

User avatar
willthrill81
Posts: 12789
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Losing a job in your 50's...

Post by willthrill81 » Sat Feb 16, 2019 10:22 pm

CyclingDuo wrote:
Sat Feb 16, 2019 10:00 pm
willthrill81 wrote:
Sat Feb 16, 2019 10:56 am
Yes, that was a good podcast episode. I enjoy Pete's take on things. He's much more balanced than many others, especially Dave Ramsay.

Kudos to you CyclingDuo for stepping up and getting back in the game. You've demonstrated that losing a job in your 50s is not necessarily the end of the world.

That being said, this issue, amongst others, is one of the reasons that I'm really trying to reach financial independence by age 55.
I know I have read posts of yours in the past with regard to issues of the "amongst others" as you mention above revolving around longevity. We are all in support of you hitting that FI goal by age 55!! After seeing a total of 25 professors being cut from our college in 2018, I can pretty much opine for all of them that we didn't see it coming.
When I've mentioned my plan to some of my colleagues, most of them look at me like I'm from Mars. They simply can't wrap their minds around someone planning to be FI at that age. I hope that the changes coming to higher ed don't leave them in the cold, but we all know that hope is not a plan.
CyclingDuo wrote:
Sat Feb 16, 2019 10:00 pm
I'm reading Larry Swedroe's excellent new book now (seems to be only a few pages at a time on break, or when I get a chance), but he mentions to have a lot of plan B's thought out and ready in the wings.
Indeed. If we continue on our current trajectory and assume a 5% real return, we should have enough in our portfolio in five years to enable us to reach FI by the time I reach age 65 with no additional retirement contributions at all (and this ignores all SS benefits). So even if I had to take a permanent 50% pay cut in five years and ceased all future contributions, we'd still likely be in good shape to retire, albeit a decade later than I'd prefer. That's our plan B.

We have other backup plans as well, one of which, far down the line but we would actually be fine with, is to sell our home (which we hope to have paid off by the end of the year) and live full-time in an RV.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Re: Losing a job in your 50's...

Post by CyclingDuo » Sat Feb 16, 2019 10:35 pm

Watty wrote:
Sat Feb 16, 2019 11:41 am
You might want to put all your information together in a "Being laid off in your 50's" wiki.
That could be a nice addition!
CyclingDuo wrote:
Sat Feb 16, 2019 10:34 am
I would be interested to hear thoughts and experiences of others who dealt with the difficulties of the downsizing/layoff in their 50's mid-career.
Watty wrote:
Sat Feb 16, 2019 11:41 am

I worked in IT where layoffs were always a risk and finding a new job in your 50's can be challenging.

Other than one brief layoff in my 20's I was able to get through my career without being laid off again but in one merger my office was closed and I had the choice of being laid off or relocating to the other side of the country. That was when I was in my late 40's. I opted to do the relocation because the local job computer job market after the dot com bust was bad and companies were also reducing computer staff after the Y2K crunch was over. There were a lot of trade offs but there were also some advantages to the new location but overall it worked out well.

The location I moved to is lower cost in general and for a retired person the income and property taxes are a lot lower so being here made my numbers work a lot better for being able to retire just before I turned 59.

I can't count the numbers of other layoffs I have been through though. It will vary with the situation but one thing to keep in mind is that often the people that survive the layoff will have a worse work environment because they are expected to fill in for the people that were laid off and the there may be gaps in skills and knowledge that the laid off people had. One problem I have seen a number of times is that in a layoff the remaining staff will be cut to the bone and be able to function but then someone will be out sick or on vacation and the remaining staff will be in an even worse situation. Be cautious about envying the people that were not laid off.
As mentioned above, I'm reading Larry Swedroe's new book where there is some good talk about human capital and asset allocation with regard to jobs that are in more cyclical industries experiencing more layoffs than careers such as tenured professors (tell that to the 25 who got layoff notices in 2018 at my former full time employer).

You do raise a good point about those who were not laid off having to take on larger loads, more stress, etc... to make up for their colleagues and duties that were cut. In my case, 3 of us primarily handled the load of 80+ majors in our discipline. 2 out of 3 of us were cut, leaving only 1 professor to primarily handle the load of what previously three of us had handled. No argument that is a big load to drop on the remaining staff.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

2015
Posts: 2906
Joined: Mon Feb 10, 2014 2:32 pm

Re: Losing a job in your 50's...

Post by 2015 » Sat Feb 16, 2019 10:57 pm

willthrill81 wrote:
Sat Feb 16, 2019 10:56 am
Yes, that was a good podcast episode. I enjoy Pete's take on things. He's much more balanced than many others, especially Dave Ramsay.

Kudos to you CyclingDuo for stepping up and getting back in the game. You've demonstrated that losing a job in your 50s is not necessarily the end of the world.

That being said, this issue, amongst others, is one of the reasons that I'm really trying to reach financial independence by age 55.
This is the smartest financial move you could possibly make. I'd recommend it to anyone in the accumulation stage. A publication just came out in the last couple weeks showing how damaging loss of a job in one's 50's can be in terms of time to reemployment and reduction in income from prior job.

z3r0c00l
Posts: 1441
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: Losing a job in your 50's...

Post by z3r0c00l » Sat Feb 16, 2019 11:06 pm

CyclingDuo wrote:
Sat Feb 16, 2019 10:34 am

Example: My first job interview post layoff that I actually was interested in (great company!), the manager - with one side of her head shaved, and the half with hair in multiple colors as well as various pierced holes and things on her face and up and down her ears - used the word "vibe" and "awesome" a total of 10 times within the 10 minute interview.
Can't believe the "kids these days" attitude didn't pay off.

User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Re: Losing a job in your 50's...

Post by CyclingDuo » Sun Feb 17, 2019 7:49 am

willthrill81 wrote:
Sat Feb 16, 2019 10:22 pm
When I've mentioned my plan to some of my colleagues, most of them look at me like I'm from Mars. They simply can't wrap their minds around someone planning to be FI at that age. I hope that the changes coming to higher ed don't leave them in the cold, but we all know that hope is not a plan.
CyclingDuo wrote:
Sat Feb 16, 2019 10:00 pm
I'm reading Larry Swedroe's excellent new book now (seems to be only a few pages at a time on break, or when I get a chance), but he mentions to have a lot of plan B's thought out and ready in the wings.
Indeed. If we continue on our current trajectory and assume a 5% real return, we should have enough in our portfolio in five years to enable us to reach FI by the time I reach age 65 with no additional retirement contributions at all (and this ignores all SS benefits). So even if I had to take a permanent 50% pay cut in five years and ceased all future contributions, we'd still likely be in good shape to retire, albeit a decade later than I'd prefer. That's our plan B.

We have other backup plans as well, one of which, far down the line but we would actually be fine with, is to sell our home (which we hope to have paid off by the end of the year) and live full-time in an RV.
That's great you have some plan B's thought out! I think that is a healthy way to be flexible as life unfolds.

My wife and I would be honest and say we had no plan B's formally thought out prior to the layoff news. We've been running through a variety of plan B scenarios since then. That's also an obvious process that connects with the original post and Pete's thoughts in terms of actionable steps to do: make a plan B list!
"Everywhere is within walking distance if you have the time." ~ Steven Wright

pennywise
Posts: 662
Joined: Sat May 31, 2014 6:22 am

Re: Losing a job in your 50's...

Post by pennywise » Sun Feb 17, 2019 8:19 am

willthrill81 wrote:
Sat Feb 16, 2019 10:22 pm
When I've mentioned my plan to some of my colleagues, most of them look at me like I'm from Mars. They simply can't wrap their minds around someone planning to be FI at that age. I hope that the changes coming to higher ed don't leave them in the cold, but we all know that hope is not a plan.
We also work in higher ed and my husband just retired at age 65. He too was surprised by how uniformly his colleagues had the same attitude. Most of the folks who congratulated him said variants of the same thing, that they can't afford to retire now and don't know when they will ever be able to. All agreed that failing full social security benefits and medicare health insurance, retirement would be completely impossible for them.

At 61, I'm so grateful (not smug) that we are financially stable enough for me to retire too whenever I decide to so.

I have my own colleagues including one who has become a friend and 'office spouse'. He just went through his second divorce, lost his 403b nest egg with bad investment decisions during the downturn, and is so stressed at work it's causing him to be physically ill. And...he is also chained to the job and has not the faintest hope of being able to unchain any time in the near or not so near future. He worries constantly about his job and what would happen if he was let go although that isn't imminent. Not a happy place to be to say the least.

jeffarvon
Posts: 80
Joined: Sat Feb 16, 2008 9:15 am
Location: Columbus, Ohio

Re: Losing a job in your 50's...

Post by jeffarvon » Sun Feb 17, 2019 8:37 am

My story connects within several of the prior responses.

Long employed at a megacorp telecommunications company with very few technical folks in their mid-50's or older. I have strong fingernails from hanging on thru frequent layoffs. During my last few years there, I went back to school and got a teaching degree.

Many folks say they have an interest or have thought about teaching. This (probably) won't fall in their laps. Effort will be required to reach the goal. I'm here to say it is possible. DW and I are essentially FI (achieved in no small part by boglehead contributors ), so occasionally I refer to teaching as my retirement hobby. Must say it is a great place to give of one's time, while also being rewarded by many benefits. Now 60 years old in my fourth year teaching HS math. No plans on stopping.

There has been a continual decline in college freshman saying they are planning a teaching degree (example article. There are jobs out there in many locales. Rather than criticize education from afar, why not dive in and help?
"Enough is as good as a feast" - Mary Poppins

User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Re: Losing a job in your 50's...

Post by CyclingDuo » Sun Feb 17, 2019 9:10 am

sailaway wrote:
Sat Feb 16, 2019 11:51 am
My FIL was laid off in his 50s. They are thriving, but the experience was traumatic enough that when my now husband and I had our very first conversation about splitting finances, he offered to fund my IRA.

The psychological aspects may not be financial, but they are actionable. I wish more folks would seek counseling at the same time as they start the job search. Many people who choose to retire have a tough time with the transition; folks who get laid off have that life changing decision taken from them, when they may have thought they were at the height of their careers, often at the same time as the empty nest transition.
The bolded part - how true! That's where I was.

Yes, seeking help is indeed actionable and worth adding to the list of items to do.

As Pete Dunn states in his podcast, it's one of the most difficult things you can go through. Whether one forges on and lands new employment, or one just retires after the layoff, or one gets stuck in an extended period of a new job search - the only thing I can relate it to - based on prior experience - would be grief.

Distinguishing the differences between being linked to making money and saving via one's human capital vs. being linked to a particular career as one's identity colors the aftermath experience in the transition following a layoff. I've seen colleagues devastated by both, as well as what appears - at least to me - as some of the stages of grief.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Re: Losing a job in your 50's...

Post by CyclingDuo » Sun Feb 17, 2019 9:14 am

jeffarvon wrote:
Sun Feb 17, 2019 8:37 am
My story connects within several of the prior responses.

Long employed at a megacorp telecommunications company with very few technical folks in their mid-50's or older. I have strong fingernails from hanging on thru frequent layoffs. During my last few years there, I went back to school and got a teaching degree.

Many folks say they have an interest or have thought about teaching. This (probably) won't fall in their laps. Effort will be required to reach the goal. I'm here to say it is possible. DW and I are essentially FI (achieved in no small part by boglehead contributors ), so occasionally I refer to teaching as my retirement hobby. Must say it is a great place to give of one's time, while also being rewarded by many benefits. Now 60 years old in my fourth year teaching HS math. No plans on stopping.
Kudos, high fives, and fist bumps to you! Great story of an excellent transition!!!
"Everywhere is within walking distance if you have the time." ~ Steven Wright

User avatar
Topic Author
CyclingDuo
Posts: 2515
Joined: Fri Jan 06, 2017 9:07 am

Re: Losing a job in your 50's...

Post by CyclingDuo » Sun Feb 17, 2019 9:53 am

Cycle wrote:
Sat Feb 16, 2019 12:08 pm
Make hay while the sun shines. Save in your 20s and unemployment will be a vacation, not a stressor.

For me, I disagree with point 3. I've already optimized my expenses so much that there isn't much fat to trim, ie the big levers have been pulled and are in effect regardless of employment status. Those levers are things like not owning a car, not living in a single family home, not having any debt/mortgage/rent.

Let's look at just one of these levers, not owning a car. Assume your car costs $10k per year (u get a nice one you've seen 10,000 commercials/billboards of). You buy it when u get your first job out of college at age 22.

If u opt to bike instead of drive the annual 10,000 in savings earning 8% over 34 years will total 1.7MM.

Let's say u would drive a beater at 5k per year, but opt to bike instead. The savings are still $800k by age 56.

The potential savings from living in a cheap house or duplex are even greater than foregoing a car.

Anyways, my point is cheap people pull the small levers like watching their grocery bill, making their own coffee, cutting back on eating out, skipping vacations, while still engaging in rediculously expensive luxuries, like owning a car and paying insurance/taxes/interest on a house they can't afford (ie they had to get a mortgage).

If you are aware of these levers early in life and take action, unemployment in ones 40s or 50s will be a vacation.
You bring up some excellent points. We all often talk about the big three expenses: housing/transportation/food and keeping them all in check within one's budget.

The authors of The Millionaire Next Door talked about it as well, and certainly many Bogleheads bring it up in forum discussions (we certainly do).

Charts have even been created of what the average income level in the US spends on these big three. Such as these from the Bureau of Labor Statistics...

Image

Image

I believe the author, Pete Dunn, was suggesting that the discretionary portion of one's spend (non-essentials) were where cuts could be made to hunker down and get cash flow in line for the household as soon as a layoff hits. In a typical 50/30/20 budget (50 being needs, 30 being wants, and 20 being savings) - the immediate cuts are going to come from the wants and some of one's variable expenses. Not everyone is living a life of deprival with their discretionary expenses when a layoff is announced. So the immediate reset on those expenses can help. As the author states, one might even find they can live just fine with the new adjustment even if replacement income is found.

I think if you are in your 50's mid-career at peak or near peak earnings, one's lifestyle may have settled into a degree of non-essentials as well as one that includes a single family dwelling and a vehicle or two. Not to argue that those with a lifestyle in an urban area where a car is not needed, and living in apartments/condos is more the norm is not a great way to live (we did the same when we lived in major cities). Our reality might be more the norm for non-city dwellers. My spouse commutes to several locations daily for her job (26 miles round trip). My new reality includes a 1.7 mile commute for one job, a 50 mile round trip for another job, and an 80 mile round trip for another. No public transportation, and even the shorter 1.7 mile trip includes weather of dips below zero from time to time down to -23, 5-7" inches of snow and ice nearly every week in winter, and hot 90+ humid conditions in warmer months. So walking and cycling to and from work are fine in the nice weather days, but 'tis a hard sell during the extremes.

We can see both sides of the equation to be living a life of slim and trim to begin with, or where the author addresses what might be more the norm - as in the majority - that includes a bit of fat that can be trimmed when the going gets tough. Even though we were saving 58% of our gross income before the layoff, we had some fat that could be trimmed. And as mentioned in my OP, there is a little more fat that could be trimmed if need be (religious and charitable giving to begin with if it ever comes to that).
"Everywhere is within walking distance if you have the time." ~ Steven Wright

User avatar
HueyLD
Posts: 7052
Joined: Mon Jan 14, 2008 10:30 am

Re: Losing a job in your 50's...

Post by HueyLD » Sun Feb 17, 2019 10:24 am

Job loss is never fun, and losing one in middle age is like double whammy.

The big corp. I worked for decided to sell itself to a mega corp. in the same industry. Needless to say, the vast majority of the employees lost their jobs while the top executives received huge golden parachute. But that's life.

The big corp. had a lot of employees who were with the company since graduation. They never thought that they would lose their jobs because the company was very profitable. Many of them spent more than they should have and it was a very ugly situation. And middle age came with costs associated with mortgage, children, etc. and the stress was beyond comprehension for those who were never in that situation. As the old saying goes, when your neighbor lost his job it was recession; however when you lost your job, it was depression.

It is virtually to communicate this possibility to a hot shot fresh young gun a few years out of school, my young self included.

User avatar
Sandtrap
Posts: 8305
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Losing a job in your 50's...

Post by Sandtrap » Sun Feb 17, 2019 10:33 am

Terrific Post!
Second that it should be in the "Wiki" with subsets for. . . "in your 40's, 60's, etc.
Thanks.

I lost a substantial income stream in my 50's as well as Health Care Coverage which was devastating. All of my assets were tied up. Cash was thin. About 4X. I plowed a certain percentage into SFH rentals and DW lived off the rest until things settled. Also moved from UHCOL to ULCOL.
To say employment is tough in later life is an understatement!!! (this is a huge problem and with the lack of health care, awful)

Fast forward 15+ years and the dust has settled. But, what a tough and scary ride. It took 4 years for our family to recover from that nasty stretch, and still, with deep and long term repercussions.

Your steps are clear. Again, should be in a Wiki, something like, "What to do with a Windfall".

1. Apply for immediate unemployment to restore some income stream.
2. Apply for immediate Cobra or other health care coverage, anything is better than nothing.
3. Cut expenses to the bone. Do whatever is necessary even if it feels overboard. Every dollar counts.
4. Lifestyle change as quickly as needed to enable #3.
5. Apply for immediate employment, without being picky, depending on need.
6. Make a plan, strategize. Don't miss the details.
7. Take drastic measures ASAP as needed. (we sold "everything" and moved)
8. It helps greatly if one is frugal and has an "efficient" lifestyle to begin with. (we did)
9. Improvise, Adapt, Overcome . . . and if that fails. . . "fake it". :shock:

Great Post. Really should be a Wiki on it.
Thanks.
jim :happy
Last edited by Sandtrap on Sun Feb 17, 2019 10:40 am, edited 3 times in total.
Wiki Bogleheads Wiki: Everything You Need to Know

KlangFool
Posts: 13422
Joined: Sat Oct 11, 2008 12:35 pm

Re: Losing a job in your 50's...

Post by KlangFool » Sun Feb 17, 2019 10:37 am

CyclingDuo wrote:
Sun Feb 17, 2019 9:53 am
Cycle wrote:
Sat Feb 16, 2019 12:08 pm
Make hay while the sun shines. Save in your 20s and unemployment will be a vacation, not a stressor.

For me, I disagree with point 3. I've already optimized my expenses so much that there isn't much fat to trim, ie the big levers have been pulled and are in effect regardless of employment status. Those levers are things like not owning a car, not living in a single family home, not having any debt/mortgage/rent.

Let's look at just one of these levers, not owning a car. Assume your car costs $10k per year (u get a nice one you've seen 10,000 commercials/billboards of). You buy it when u get your first job out of college at age 22.

If u opt to bike instead of drive the annual 10,000 in savings earning 8% over 34 years will total 1.7MM.

Let's say u would drive a beater at 5k per year, but opt to bike instead. The savings are still $800k by age 56.

The potential savings from living in a cheap house or duplex are even greater than foregoing a car.

Anyways, my point is cheap people pull the small levers like watching their grocery bill, making their own coffee, cutting back on eating out, skipping vacations, while still engaging in rediculously expensive luxuries, like owning a car and paying insurance/taxes/interest on a house they can't afford (ie they had to get a mortgage).

If you are aware of these levers early in life and take action, unemployment in ones 40s or 50s will be a vacation.
You bring up some excellent points. We all often talk about the big three expenses: housing/transportation/food and keeping them all in check within one's budget.

The authors of The Millionaire Next Door talked about it as well, and certainly many Bogleheads bring it up in forum discussions (we certainly do).

Charts have even been created of what the average income level in the US spends on these big three. Such as these from the Bureau of Labor Statistics...

Image

Image

I believe the author, Pete Dunn, was suggesting that the discretionary portion of one's spend (non-essentials) were where cuts could be made to hunker down and get cash flow in line for the household as soon as a layoff hits. In a typical 50/30/20 budget (50 being needs, 30 being wants, and 20 being savings) - the immediate cuts are going to come from the wants and some of one's variable expenses. Not everyone is living a life of deprival with their discretionary expenses when a layoff is announced. So the immediate reset on those expenses can help. As the author states, one might even find they can live just fine with the new adjustment even if replacement income is found.

I think if you are in your 50's mid-career at peak or near peak earnings, one's lifestyle may have settled into a degree of non-essentials as well as one that includes a single family dwelling and a vehicle or two. Not to argue that those with a lifestyle in an urban area where a car is not needed, and living in apartments/condos is more the norm is not a great way to live (we did the same when we lived in major cities). Our reality might be more the norm for non-city dwellers. My spouse commutes to several locations daily for her job (26 miles round trip). My new reality includes a 1.7 mile commute for one job, a 50 mile round trip for another job, and an 80 mile round trip for another. No public transportation, and even the shorter 1.7 mile trip includes weather of dips below zero from time to time down to -23, 5-7" inches of snow and ice nearly every week in winter, and hot 90+ humid conditions in warmer months. So walking and cycling to and from work are fine in the nice weather days, but 'tis a hard sell during the extremes.

We can see both sides of the equation to be living a life of slim and trim to begin with, or where the author addresses what might be more the norm - as in the majority - that includes a bit of fat that can be trimmed when the going gets tough. Even though we were saving 58% of our gross income before the layoff, we had some fat that could be trimmed. And as mentioned in my OP, there is a little more fat that could be trimmed if need be (religious and charitable giving to begin with if it ever comes to that).
CyclingDuo,

From your statistic, you could see that it is too late for most folks.

A) Housing -> you cannot cut your mortgage.

B) Transportation -> you still have to pay your car loan. And, you need your cars to attend job interviews.

C) Realistically, you can only cut foods. This is a small percentage of the budget. But, people do starve in a laid off.

In the DC Metro area, the food bank is supplying food to about 10% of the population. And, we are not in a recession yet. So, it only can get worse in a recession.

KlangFool

User avatar
Sandtrap
Posts: 8305
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Losing a job in your 50's...

Post by Sandtrap » Sun Feb 17, 2019 10:44 am

CyclingDuo,

From your statistic, you could see that it is too late for most folks.

A) Housing -> you cannot cut your mortgage.

B) Transportation -> you still have to pay your car loan. And, you need your cars to attend job interviews.

C) Realistically, you can only cut foods. This is a small percentage of the budget. But, people do starve in a laid off.

In the DC Metro area, the food bank is supplying food to about 10% of the population. And, we are not in a recession yet. So, it only can get worse in a recession.

KlangFool
Good points, as always, "Klang".
Also:
A) But you can sell your home. Move from HCOL to LCOL if possible. Tough if already in a LCOL area.
B) Agreed. But, if moving, can also downsize if vehicles are expensive or too many.
c) Agreed. My "depression era" dad once said, if you have to "eat poor" then you will really really feel poor.

j
Wiki Bogleheads Wiki: Everything You Need to Know

User avatar
Sandtrap
Posts: 8305
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Losing a job in your 50's...

Post by Sandtrap » Sun Feb 17, 2019 10:46 am

OP:
think if you are in your 50's mid-career at peak or near peak earnings,
I think this is likely true for many, especially in mid to higher level positions.
And, very applicable to forum members, and area of concern.

How many here are prepared?
Wiki Bogleheads Wiki: Everything You Need to Know

KlangFool
Posts: 13422
Joined: Sat Oct 11, 2008 12:35 pm

Re: Losing a job in your 50's...

Post by KlangFool » Sun Feb 17, 2019 11:05 am

Sandtrap wrote:
Sun Feb 17, 2019 10:44 am
CyclingDuo,

From your statistic, you could see that it is too late for most folks.

A) Housing -> you cannot cut your mortgage.

B) Transportation -> you still have to pay your car loan. And, you need your cars to attend job interviews.

C) Realistically, you can only cut foods. This is a small percentage of the budget. But, people do starve in a laid off.

In the DC Metro area, the food bank is supplying food to about 10% of the population. And, we are not in a recession yet. So, it only can get worse in a recession.

KlangFool
Good points, as always, "Klang".
Also:
A) But you can sell your home. Move from HCOL to LCOL if possible. Tough if already in a LCOL area.
B) Agreed. But, if moving, can also downsize if vehicles are expensive or too many.
c) Agreed. My "depression era" dad once said, if you have to "eat poor" then you will really really feel poor.

j
Sandtrap,

<<A) But you can sell your home. Move from HCOL to LCOL if possible. Tough if already in a LCOL area.>>

If your house is underwater, you need to pay the bank in order to sell the house. This happened to many of my "House Poor" peers in 2008/2009. But, they need to move to find a new job. So, they are stuck paying housing expense in 2 locations.

So, if you are lucky enough not to be laid off in a recession, it may work. But, many folks are laid off in a recession.

KlangFool

Colorado13
Posts: 949
Joined: Thu Apr 07, 2011 4:58 pm
Location: Colorado

Re: Losing a job in your 50's...

Post by Colorado13 » Sun Feb 17, 2019 11:09 am

I know there are a lot of opinions about "pay off the mortgage before retirement" and "pay off mortgage or invest." One reason I paid off the mortgage is that if I'm laid off in my 50s, a layoff would be much less stressful than with a mortgage. I have no debt, so losing the job would not be ideal, but is manageable since my non-negotiable housing costs (insurance and property taxes) are only 3% of pre-tax income rather than 20%, 30%, etc. I have enough in cash/cash-like investments that I can pay these costs without much stress.

I'm a planner and expect that LBYM for my entire life will pay off in the case of a layoff. I volunteer at the food bank so understand how quickly a situation can change from having enough money for food to not. I'm always saving for a rainy day...

KlangFool
Posts: 13422
Joined: Sat Oct 11, 2008 12:35 pm

Re: Losing a job in your 50's...

Post by KlangFool » Sun Feb 17, 2019 11:13 am

Folks,

There is another problem that is not mentioned in this thread yet: student loan.

My peer's daughter is a National Merit Finalist. She had a full-ride scholarship to UVA. But, she wants to go to Northeastern? Instead. So, instead of a fully-paid Bachelor degree, the parent (my peer) have to take a student loan to finance her bachelor degree. My peer has a bigger and more expensive house too. And, he has 2 more kids going to college in a few years. He is stressed out every day due to the regular laid off. He told me that he cannot tell his daughter that he cannot afford to send her to Northeastern.

KlangFool

getthatmarshmallow
Posts: 360
Joined: Mon Dec 04, 2017 9:43 am

Re: Losing a job in your 50's...

Post by getthatmarshmallow » Sun Feb 17, 2019 11:18 am

willthrill81 wrote:
Sat Feb 16, 2019 10:56 am
Yes, that was a good podcast episode. I enjoy Pete's take on things. He's much more balanced than many others, especially Dave Ramsay.

Kudos to you CyclingDuo for stepping up and getting back in the game. You've demonstrated that losing a job in your 50s is not necessarily the end of the world.

That being said, this issue, amongst others, is one of the reasons that I'm really trying to reach financial independence by age 55.
Same here. If I can work till 65, I probably will. But I don't want us to be in a situation where we have to beyond 55.

User avatar
willthrill81
Posts: 12789
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Losing a job in your 50's...

Post by willthrill81 » Sun Feb 17, 2019 11:19 am

Colorado13 wrote:
Sun Feb 17, 2019 11:09 am
I know there are a lot of opinions about "pay off the mortgage before retirement" and "pay off mortgage or invest." One reason I paid off the mortgage is that if I'm laid off in my 50s, a layoff would be much less stressful than with a mortgage.
It's not just stress. Having a fixed expense like a mortgage in the withdrawal phase can result in significant sequence of returns risk.

In the event of extended unemployment, I'd rather have no mortgage and a smaller portfolio.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

danaht
Posts: 597
Joined: Sun Oct 18, 2015 11:28 am

Re: Losing a job in your 50's...

Post by danaht » Sun Feb 17, 2019 11:37 am

I think we should all plan to retire in our 50s. So, if we do get laid off at that time - we will already be financially independent. At least that is my current plan. I am 47 now - and am planning to retire at 57. Hopefully, no emergencies occur that will change this. I also could decide to work additional years - but at least I'll have the option to retire at 57.

User avatar
beyou
Posts: 2737
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: Losing a job in your 50's...

Post by beyou » Sun Feb 17, 2019 11:43 am

Best thing that happened to me was being laid off from my first full time job out of college. Company shut down an entire subsidiary. While I was offered the chance to interview for and relocate to multiple other locations, my entire career I had it in my head that one needs to save to become self sufficient.

Probably had a natural tendancy to want to get paid and save, but that early experience sent me into turbo mode. Paid off my student loans, the 1st and only car loan. Took mortgage with idea to payoff asap, which I did.

I am nearing again facing relocate or layoff in mid 50s, but decided I am ready for FIRE. I have recruiters contacting me but I did the math and feel I don’t HAVE to go through the ageist interview process, don’t HAVE to relocate to a location not of my choice. I also dont HAVE to retire, I could decide to work, easier to take rejection if you know you do not NEED the job.

LBYM and be ready so you have options when you need them. Does not take all the fear out of layoffs, but much of it. I do fear I will reget retiring and be unable to change my mind after a period of time, and it is that difficulty of making what will be an irreversible decision that is hardest to deal with. But doing my homework since I have some time before things conclude, and leaning towards taking the plunge.

livesoft
Posts: 67839
Joined: Thu Mar 01, 2007 8:00 pm

Re: Losing a job in your 50's...

Post by livesoft » Sun Feb 17, 2019 11:45 am

danaht wrote:
Sun Feb 17, 2019 11:37 am
I think we should all plan to retire in our 50s. So, if we do get laid off at that time - we will already be financially independent. At least that is my current plan. I am 47 now - and am planning to retire at 57. Hopefully, no emergencies occur that will change this. I also could decide to work additional years - but at least I'll have the option to retire at 57.
This is great for folks who can do that. I lost my job in my 50's. I was unemployed with two kids in college. I had planned to early retire in my 50s anyways, so my "package" was a blessing. I felt like I was Br'er Rabbit thrown into the brier patch.

As noted, I had planned on this, so I had a bunch of things already taken care of ahead of time. Some were big like alternate health insurance. Some were small like personal e-mail, no personal stuff in my work e-mail account, no personal stuff on work laptop. No personal stuff on company-provided smart phone. I could walk out the door on a minute's notice if it came to that.

OK, I realize that my post is not in keeping with the tenor of this thread, but this thread needs some positive thinking, too.
Last edited by livesoft on Sun Feb 17, 2019 11:49 am, edited 2 times in total.
Wiki This signature message sponsored by sscritic: Learn to fish.

GatorFL
Posts: 36
Joined: Fri Aug 17, 2018 12:07 pm

Re: Losing a job in your 50's...

Post by GatorFL » Sun Feb 17, 2019 11:46 am

I recently spent a week vacation with my wife's best friend and her 2nd husband. He is 60, she is 53. I was shocked to learn that he signed for a boatload of Parent Plus loans for his oldest step daughter as well as the 2nd daughter. He didn't give an exact number, but said it was close to 6 figures! He works like a dog, is in poor health, and lives in a house that is falling apart.

He told me that they were selling their house and buying a newer and larger house as he didn't believe that Parent Plus loans would impact his ability to get a mortgage. I told him that I don't see how that is possible, debt is debt to me.

While I felt bad in the beginning for him, I started to uncover some things:

1. Step daughter #1 simply had to go to a small private college. State school was simply not good enough even though there was one literally in the same town. 4 years of private liberal arts to get an English degree with no job other than minimum wage.
2. Truck: In the midst of the vacation, I found out they were buying a 50K truck, but got "a deal" on it with their trade in and it was only 30K. Thee truck was needed to clean out the bad house. My response to that was that Home Depot rents a truck for about $30 for a day. I've used it before to get rid of stuff.
3. They tried to get deadbeat Dad to contribute to the 2nd daughters college and were not successful, so more loans.
4. They "apply and hope" for their credit, the whole vacation was stressed because of them waiting for the approval email for the truck.

It was downright depressing to have to listen to all the stories and misery. My feeling bad turned to me being irritated with them for making bad decisions, and biting my tongue for an entire week has left me nearly tongueless!

While I haven't made all the best moves, I am modestly FI at 54 and while I am still working, I agree with many of the other posts that it is good to have options.

My main point of this post is to take the time to breathe a sigh of relief and thank God for LBYM (or at least living AT your means) decisions.
GatorFL

User avatar
willthrill81
Posts: 12789
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Losing a job in your 50's...

Post by willthrill81 » Sun Feb 17, 2019 12:35 pm

danaht wrote:
Sun Feb 17, 2019 11:37 am
I think we should all plan to retire in our 50s. So, if we do get laid off at that time - we will already be financially independent. At least that is my current plan. I am 47 now - and am planning to retire at 57. Hopefully, no emergencies occur that will change this. I also could decide to work additional years - but at least I'll have the option to retire at 57.
I think that planning on becoming financially independent by your mid 50s is both a very worthwhile goal and a very attainable one for an above-average income earner. With a 5% return and a 4% withdrawal rate, financial independence can be achieved in 32 years with a 25% savings rate. That's very doable for an above-average earner.

Planning on just making it to FI by the time you're ~65 is fraught with risk.

What if your portfolio's returns from age 55-65 are poor?
What if your SS benefits are less than you were planning for?
What if a financial emergency from a family member requires your assistance?
What if you must deal with extended unemployment or underemployment along the way?
What if laws are changed in some way that is disadvantageous to you financially?
Etc. etc.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
Sandtrap
Posts: 8305
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Losing a job in your 50's...

Post by Sandtrap » Sun Feb 17, 2019 12:38 pm

livesoft wrote:
Sun Feb 17, 2019 11:45 am
danaht wrote:
Sun Feb 17, 2019 11:37 am
I think we should all plan to retire in our 50s. So, if we do get laid off at that time - we will already be financially independent. At least that is my current plan. I am 47 now - and am planning to retire at 57. Hopefully, no emergencies occur that will change this. I also could decide to work additional years - but at least I'll have the option to retire at 57.
This is great for folks who can do that. I lost my job in my 50's. I was unemployed with two kids in college. I had planned to early retire in my 50s anyways, so my "package" was a blessing. I felt like I was Br'er Rabbit thrown into the brier patch.

As noted, I had planned on this, so I had a bunch of things already taken care of ahead of time. Some were big like alternate health insurance. Some were small like personal e-mail, no personal stuff in my work e-mail account, no personal stuff on work laptop. No personal stuff on company-provided smart phone. I could walk out the door on a minute's notice if it came to that.

OK, I realize that my post is not in keeping with the tenor of this thread, but this thread needs some positive thinking, too.
Good point, and . . .
Absolutely within the tenor (also alto, soprano, bass) of this thread.
The underlying theme of the forum is to "be prepared".

Years earlier to being laid off in my 50's, I had a "stinking feeling" that there were a few sharpened "ice picks" with my name on it. Nothing concrete, just a feeling. If DW and I had not acted on those instincts, matters would have been far worse to be taken completely by surprise.

fellow tenor
j
Wiki Bogleheads Wiki: Everything You Need to Know

User avatar
willthrill81
Posts: 12789
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Losing a job in your 50's...

Post by willthrill81 » Sun Feb 17, 2019 12:41 pm

Sandtrap wrote:
Sun Feb 17, 2019 12:38 pm
Years earlier to being laid off in my 50's, I had a "stinking feeling" that there were a few sharpened "ice picks" with my name on it. Nothing concrete, just a feeling. If DW and I had not acted on those instincts, matters would have been far worse to be taken completely by surprise.
I think that many people experience this kind of 'sixth sense' about their job security, but they just can't accept that the risk is real and/or they don't want to take the steps needed to mitigate the risk.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
corn18
Posts: 1479
Joined: Fri May 22, 2015 6:24 am

Re: Losing a job in your 50's...

Post by corn18 » Sun Feb 17, 2019 1:02 pm

And then there are folks who may want to get laid off in their 50's. I would love to get pink slip in Apr 2021. Severance, PTO payout + unemployment would = not having to work OMY.
Don't do something, just stand there!

User avatar
vitaflo
Posts: 1156
Joined: Sat Sep 03, 2011 3:02 pm

Re: Losing a job in your 50's...

Post by vitaflo » Sun Feb 17, 2019 1:09 pm

willthrill81 wrote:
Sat Feb 16, 2019 10:56 am
Kudos to you CyclingDuo for stepping up and getting back in the game. You've demonstrated that losing a job in your 50s is not necessarily the end of the world.

That being said, this issue, amongst others, is one of the reasons that I'm really trying to reach financial independence by age 55.
Agreed, especially if you work in a career hostile to old age (tech). Right now the roadmap has us being FI by 50. Even if we don't save a penny between now and retirement we can still retire at ~55 (assuming modest returns).

Being debt free is also a leg up for us, simply because our expenses are now so low. We could both flip burgers and make almost enough to pay our expenses right now. Basically, we have options, which I think is the most important thing.

mnnice
Posts: 437
Joined: Sat Aug 11, 2012 5:48 pm

Re: Losing a job in your 50's...

Post by mnnice » Sun Feb 17, 2019 1:39 pm

I am finding this an interesting dialogue. Especially, the conversation between Cycle and cyclingduo since I have lived in both their current locations :) . The level of car dependency is pretty radical different especially in the era of ridesharing.

DH and I were both laid off about the same time nearly five years ago at 45. We were both were ready for a change. We both have had paid employment in our lives since but not full time and not in our respective fields. I think for us it was a good decision. Saving like banshees in our 20s, 30s, and early 40’s plus ACA availability has been the keys to making it work.

My biggest frustration is that dispite super flexible work schedules and financial resources it’s had to escape our crappy weather, but I enjoy having kids at home too.

I think higher ed is going to have more changes to come. Birth rates are falling and I think the cohort groups of first year college students (or freshmen to us old timers) are shrinking . Another liberal arts college in my state was in danger of closing mid-year until some 11th hour help materialized.

User avatar
rob
Posts: 3043
Joined: Mon Feb 19, 2007 6:49 pm
Location: Here

Re: Losing a job in your 50's...

Post by rob » Sun Feb 17, 2019 2:00 pm

Sandtrap wrote:
Sun Feb 17, 2019 10:33 am
2. Apply for immediate Cobra or other health care coverage, anything is better than nothing.
I would modify this one slightly... because COBRA is retroactive, I would say KNOW the dates immediately but unless your needing expensive drugs or procedures, don't activate unless you have a large healthcare cost.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

slyfox1357
Posts: 18
Joined: Tue Dec 26, 2017 6:13 pm

Re: Losing a job in your 50's...

Post by slyfox1357 » Sun Feb 17, 2019 2:02 pm

About to turn 52 and was just abruptly informed of being laid off from my IT job/career. Severance is generous, 5 months COBRA paid, 6 months outplacement services, vacation payout and severance pay lump sum of roughly 10 months pay. Plus full greenlight for unemployment benefits.

But, wow, a 21 year career at a global company, and then, all of the sudden, gone.

This thread and discussion is very timely, thanks for all of the tips. Onwards and upwards!

User avatar
Sandtrap
Posts: 8305
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Losing a job in your 50's...

Post by Sandtrap » Sun Feb 17, 2019 2:04 pm

rob wrote:
Sun Feb 17, 2019 2:00 pm
Sandtrap wrote:
Sun Feb 17, 2019 10:33 am
2. Apply for immediate Cobra or other health care coverage, anything is better than nothing.
I would modify this one slightly... because COBRA is retroactive, I would say KNOW the dates immediately but unless your needing expensive drugs or procedures, don't activate unless you have a large healthcare cost.
Yes. Of course.
Good point.
Thanks.
j
Wiki Bogleheads Wiki: Everything You Need to Know

Maven
Posts: 69
Joined: Sat Dec 08, 2018 4:01 pm

Re: Losing a job in your 50's...

Post by Maven » Sun Feb 17, 2019 2:10 pm

Appreciate this well written and informative post. Thank you for your insight and time.

SchruteB&B
Posts: 159
Joined: Mon Jul 02, 2018 7:48 am

Re: Losing a job in your 50's...

Post by SchruteB&B » Sun Feb 17, 2019 2:20 pm

My mother was laid off from her professional, multiple graduate degrees required job in her early 50s. Despite much effort, she never could get that kind of job again. But she found multiple part time jobs and did them for over a decade. That kept her from having to touch any of her retirement savings and allowed them to grow during the 1990s. This was absolutely critical in allowing her to have a modest, but adequately funded retirement now.

Whakamole
Posts: 1041
Joined: Wed Jan 13, 2016 9:59 pm

Re: Losing a job in your 50's...

Post by Whakamole » Sun Feb 17, 2019 2:26 pm

KlangFool wrote:
Sun Feb 17, 2019 11:13 am
Folks,

There is another problem that is not mentioned in this thread yet: student loan.

My peer's daughter is a National Merit Finalist. She had a full-ride scholarship to UVA. But, she wants to go to Northeastern? Instead. So, instead of a fully-paid Bachelor degree, the parent (my peer) have to take a student loan to finance her bachelor degree. My peer has a bigger and more expensive house too. And, he has 2 more kids going to college in a few years. He is stressed out every day due to the regular laid off. He told me that he cannot tell his daughter that he cannot afford to send her to Northeastern.

KlangFool
I think he has to tell his daughter that. UVA is also a top school, it's not like comparing Northeastern to a no-name public university.

---

Back to the topic at hand - this is something that keeps me up at night. Single, late 40s tech worker, life-long renter. The numbers say I should be OK though I will need to make changes (move to a LCOL area, etc.) I'd be much happier with some more investments but that is why I'm maxing out everything while I can. Coming up to speed on newer tech can only help so much.

User avatar
Mlm
Posts: 414
Joined: Sat Apr 09, 2016 6:00 pm

Re: Losing a job in your 50's...

Post by Mlm » Sun Feb 17, 2019 2:34 pm

Oh my. Just reading this thread made my heart sink while remembering the day I lost my job at 61.

I never imagined that the owner of the family owned company would die @64 and a few years later the company President would die too @ 57.

The company was sold but the new Corp owners kept me on and we had a good working relationship.
Then BOOM..they eliminated my job after 27 years.

I did have the presence of mind to renegotiate their initial severance offer but it still wasn't much. I searched for a new job but there wasn't much out there, even at half my former pay.

I was fortunate that my home was paid for and my needs were small. I was able to retire (no pension) and no SS yet. Just living off my dividend income for the past three years.

I'm glad that I had a good (not high) savings and retirement accounts. I shudder to think how I would have ended up if this had happened at 51 instead of 61.

Be prepared...there are just so many things that can throw your well laid plans off course.

noco-hawkeye
Posts: 418
Joined: Sat Aug 16, 2014 8:20 am

Re: Losing a job in your 50's...

Post by noco-hawkeye » Sun Feb 17, 2019 2:42 pm

danaht wrote:
Sun Feb 17, 2019 11:37 am
I think we should all plan to retire in our 50s. So, if we do get laid off at that time - we will already be financially independent. At least that is my current plan. I am 47 now - and am planning to retire at 57. Hopefully, no emergencies occur that will change this. I also could decide to work additional years - but at least I'll have the option to retire at 57.
Agree with this post, and in a similar boat. I think peak income years are either now or slightly behind me in the rear view mirror. Trying to plan on reducing your income in your 50s (not always by choice) is a great goal for most all of us.

I would not be shocked to be working for half of what I make now in my 50s, but just for health insurance as much as anything.

Life is not a straight path, be ready for the curves. :sharebeer

Post Reply