Retirement Planning After 50: A Guide for People Who Have Been Laid Off
People who are retired by choice may have planned for their retirement years before actually retiring. They saved money in 401K accounts, IRAs, Roth IRAs, and any number of other financial instruments that would grow their savings over time. Some invested in real estate, purchased income-bearing life insurance plans or annuities, long term care insurance, and any number of other options that would provide financial security during retirement. Many paid down their mortgages or paid off their homes; some might have opted for home refinance options with balloon payments. Other people downsize; they sell their homes and purchase something smaller, perhaps in a retirement community. Whatever the scenario, people who plan to retire at a specific time probably planned for it. When the big day came, they celebrated; perhaps their employer even threw them a retirement party. Those were the days!
If you are over 50, you may have casually thought about retirement and figured you would work through the details and timing as you got a little bit closer to your Social Security eligibility age (anywhere from 66 years of age and above, depending on your birth year). Unfortunately, if you suddenly find yourself without employment due to a layoff, consolidation, rightsizing or anything else over which you had no control, you may feel prematurely forced into more closely contemplating retirement because of a bleak and competitive job market. If your knee-jerk reaction to being laid off was to find another job quickly, you likely discovered that it is not a seller’s (employee's) market, especially if you are of a certain age. It’s time to think about your options, and retirement may be one of them. If you are in the United States and and at full retirement eligibility (age varies depending on birth year), then retirement is a far more viable solution.
What is retirement? The Cambridge University Dictionary defines it as “the action or fact of leaving one's job and ceasing to work.” USA Today’s February 22, 2023 article entitled “What is Retirement?” said “Retirement refers to the time when someone permanently leaves the workforce, usually in the later years of their life.” That latter statement is a bit insulting. If you are 50, or even in your early to mid-60s, you might expect to have another 30 or 40 years ahead of you, especially if genetics and lifestyle are on your side. You are certainly not in the "later years" of your life. Moreover, if your departure from your employer occurred years before your intended retirement date, the idea of ceasing to work is very unsettling. Today (in 2023), there are numerous examples of employees who are laid off just one or two years away from their planned retirement age. Suddenly, in addition to the loss of income, they have to find extra funds to cover expensive health insurance costs. The "golden years" may not seem so golden! In fact, maybe that term "golden years" should be laid to rest. Perhaps our dictionaries need to rethink the definition of "retirement" also. What if the definition of retirement were “the period of time after an individual has stopped working for an employer at a traditional day job, and has entered a period of freelance work or self-employment?” What if the definition were “retirement is the chapter in life when individuals follow their dreams and passions, doing inspirational work or focusing on personal projects like writing, painting, teaching, volunteering, or traveling? It is a time when individuals can enjoy spending hours with family, friends and loved ones, uninterrupted by time-bound obligations.”
If you have been thrust unexpectedly into retirement, it is best to give yourself time to reflect, dream, imagine and take care of yourself first and foremost. Take stock of your personal situation – finances, family obligations and your health. If your situation requires more income than what social security will provide (if you are eligible), then you need to think about how to generate revenue. This could mean either settling for a job that isn’t as lucrative or rewarding as the job you left, or accepting temporary contract work, at least in the short term.
Prior to being laid off, and shortly thereafter, several of my friends asked if I planned to retire. Still shell-shocked, I insisted that I needed an income stream because I support my 95-year old mother. It took awhile, meetings with my financial adviser, and a lot of spreadsheets until I accepted that I could get by comfortably on much less income than I had earned previously. Yes, I am fortunate (but also very conservative; I ensured I maximized all my retirement savings while working). You will not know whether you are in a position to retire until you do that financial self-assessment.
The most important part of my self-assessment was not about finances but was more focused on following my heart. Friends and family who know me well insisted, “You need to follow your passion. Do what you love.” My friends know that I love teaching and writing and have a passion for advocacy. For the past two years, I have written and edited a social justice-focused newsletter, and I have organized author talks and discussion events related to similar themes. Somewhere deep in my soul, I knew that my next chapter should involve writing; more specifically writing about topics I feel passionate about. I also knew that my next chapter would include teaching Pilates. I started teaching three years before my unplanned early “retirement” (aka, layoff). I found time to teach on weekends even while working a full time day job and loved the reward of helping others to discover ways to strengthen their bodies physically and even improve physical limitations. It actually took me about four full months to decide to stop job hunting and accept that it was time to “retire.” For me, retirement was not “ceasing” to work, but doing a 180 degree shift to “work” that I love. I was able to focus on my passions – writing, pilates and social advocacy, and turn those into my next chapter.
Retirement should never be viewed as your “later years,” or time when you “cease” work. Rather, think of retirement as the time when you get to chill a bit, do what you love, stop answering to others (except those you love and who need you). Fill your time with work that gives you joy. I am truly envious of people with artistic talents like painting and sculpting and I admire people with gardening skills. Those are people who will find joy in their third chapter of life – they will have things to do while not required to show up at the day job. Some of those people may even find ways to monetize their skills. I recently saw a freelance job posting for a landscape designer paying $75/hour. Believe it or not, there may be people willing to pay you for something you do well. If you do want to pursue freelance work, there are a plethora of sites that have job postings, and a wealth of materials on how to procure freelance work. I don’t want to paint a picture of this being easy to do; it isn’t. However, when all is said and done, the best we can do is discover a way to enjoy our retirement years, even if they arrive sooner than we planned.
My sister-in-law refers to life as having three parts, which she refers to as “thirds.” The first third is spent learning, the second third is spent working, and the last third is designed for self-care. If you are fortunate enough to be in your last third, and if you spent time during the second third earning a living and setting some money aside for retirement, your final third can be spent traveling, doing artistic pursuits, exercising, eating well and just enjoying life. Perhaps your last chapter is a time to give back – to volunteer for noble pursuits. Save the polar bears, plant some trees, read for the visually impaired, tutor youngsters to improve literacy, or prepare food for the homeless. These are just examples; find what resonates for you. In short, help others; pay it forward.