What to Do if You're Laid Off Before You Retire

You had a plan. You were going to work for a few more years, and head gracefully and gleefully into retirement. But your company didn’t cooperate. You’ve found yourself laid off, and wondering what to do next.

The job market is tough for older people, and if you are a few years away from your intended retirement date, you may be unsure of the best next steps. Can you retire early? If not, what jobs are out there for people your age? Do you even want to work full-time anyway?

Everyone’s situation is different, but there are options for older people who find themselves laid off before their planned retirement.

Look for a new full-time job

There’s no question that folks over 50 may have a tough time in the job market. Ageism exists, especially in fields where employers assume young people will have more technical skills. But it’s entirely possible to find a new position, and there are companies that will value the experience and knowledge of an older worker.

The American Association of Retired Persons (AARP) names several great jobs for people over 50, including accountant, personal trainer, landscaper, and interpreter. Just keep in mind that it may take weeks or even months to land a position you want. This is why it’s important to maintain an emergency fund with at least three to six months' worth of living expenses.

Find a fun part-time job

Recently, my family and I went to Pittsburgh and took a tour of the ballpark. Most of the tour guides were older men who appeared excited to be there, and the team seemed to appreciate the knowledge and enthusiasm they brought to the job.

If you feel like you need to work to stay busy and bring in some dollars, but don’t need to work full-time, try to find something that channels your passion. Maybe it’s working outside doing landscaping or lawn care. Perhaps it’s doing home improvement work, or tutoring students in English. If you can find something you enjoy and get paid for it, that may be better than landing a full-time job. (See also: 6 Great Retirement Jobs)

Seek consulting gigs

While companies aren’t always eager to hire older workers on a full-time basis, they have been known to rely on them for expertise on a contract basis. Companies still must rely on older workers who have institutional knowledge and some specific experience. In fact, it’s not unheard of for workers to be laid off only to return as a consultant, doing similar work. (I once met a guy who was brought back and found himself sitting at his same old desk!)

If you do find yourself laid off, consider marketing your services on a contract or as-needed basis. You may be surprised at how lucrative some of these opportunities are, and you will have some job flexibility that may help you phase into retirement for good.

Adjust your budget

The good news about being laid off when you are older is that your living expenses are generally lower. But you’ll still need to reduce your spending if you find yourself without a job. Track all of your expenses and see where you can cut costs. Savings may come from canceling your cable TV subscription, or reducing your food budget. You may save money on gas and other car expenses if you aren’t working. You’d be surprised where you can find ways to cut costs, and you may even find that you will be comfortable with a lower standard of living, allowing you to retire for good. (See also: 6 Ways You Can Cut Costs Right Before You Retire)

Go ahead and retire

Perhaps you planned to stop working at 63, but you were laid off at 59. You may think you need to keep working to hit your retirement savings goal, but you might be much closer than you think. Maybe your savings goal was larger than necessary and you’re actually right on target. Perhaps you only need to make modest adjustments to your standard of living, like reducing your spending for a few years, or adjusting your investment strategy to boost your income now while still growing your nest egg.

You may find yourself retired early, but those few years may not make much of a difference. If you have a financial adviser, talk with them about how to make your money work for you now and last a little longer. Your adviser may also be able to help you avoid any penalties and taxes from withdrawing money from your retirement accounts early. (See also: 5 Ways to Handle a Forced Early Retirement)

Check if you can collect Social Security

Let’s say you find yourself laid off at age 62. The good news is that you are old enough to begin receiving Social Security benefits, though your payments will not be as high as they would be if you waited another five years (until your full retirement age). At age 62, you’ll receive about 70 percent of the maximum monthly benefit.

If you can wait until you are older to collect, you’ll end up receiving more benefits in the long run. But even a partial benefit is better than nothing, and may allow you to retire early. (See also: 5 Questions to Ask Before You Start Claiming Your Social Security Benefits)

Identify passive income sources

If you are unable to find a new job or unsure if you want to return to the workforce, it may be time to get creative in how you make money. It’s entirely possible to earn money without a “real” job, if you know where to look. Adjusting your investment portfolio to earn money from dividend stocks is a popular option among older Americans. With dividends, companies pay a portion of their income to shareholders, and returns can be much higher than interest from the bank.

Real estate can offer a passive income source as well. If you have the funds to buy an investment property, consider renting it out and earning money from tenants. (Just keep in mind there may be some work and expense associated with ownership.)

If you are computer savvy, you may be able to make money from blogging or hosting videos on YouTube. This content can earn you money from advertising long after you’re done producing it.

The job market may be tougher for older citizens, but that doesn’t mean you can’t earn money. And who knows? Some of these sources may be able to continue to bring you income even after you retire for good. (See also: 5 Ways to Make Passive Income Online)

Start a business

Maybe you spent your work life wishing you could be your own boss, but the stars never quite aligned. Perhaps now is the time to take the plunge and become an entrepreneur. There’s obviously some risk in starting a business, but you may be at a point in your life where you have some money saved and relatively low living expenses. You may have years of work experience that you can bring to the table to get the business launched, and you can now set your own work schedule.

Your business doesn’t necessarily have to involve starting the next Amazon.com. It might be something more low key, like a math tutoring business, a small handyman company, or selling handmade items.

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