Approaching 50, Plan For Unemployment

dtrammel's picture

Its a often unmentioned but known downside of getting older, while you are often at the peak of your skill level, you are also at the peak of your salary. Many employers consider that a serious problem, for them not you. Trimming payroll is one of the biggest ways corporations react to downturns in the economy. Lay off a third of your employees and make the remainder take up the slack. Overtime is cheaper than the cost of the laid off employees. You can't count on any loyalty from your employer any more, no matter how long you have worked there. The decision is in the hands of Human Resource Department of your company who just views you as a expendable and replaceable resource. Its up to you to protect your welfare.

"If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours"

Many Americans assume that by the time they reach their 50s they’ll have steady work, time to save and the right to make their own decisions about when to retire. ProPublica and the Urban Institute, a Washington think tank, analyzed data from the Health and Retirement Study, or HRS, the premier source of quantitative information about aging in America. Since 1992, the study has followed a nationally representative sample of about 20,000 people from the time they turn 50 through the rest of their lives.

Through 2016, our analysis found that between the time older workers enter the study and when they leave paid employment, 56 percent are laid off at least once or leave jobs under such financially damaging circumstances that it’s likely they were pushed out rather than choosing to go voluntarily. Only one in 10 of these workers ever again earns as much as they did before their employment setbacks, our analysis showed. Even years afterward, the household incomes of over half of those who experience such work disruptions remain substantially below those of workers who don’t.


“This isn’t how most people think they’re going to finish out their work lives,” said Richard Johnson, an Urban Institute economist and veteran scholar of the older labor force who worked on the analysis. “For the majority of older Americans, working after 50 is considerably riskier and more turbulent than we previously thought.”

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How do you protect yourself?

The first important thing is to be aware of what is going on in your company.

How is business going? Are sales growing? Are they holding steady? Are they declining and is management worried and putting pressure on? Is the company stock down? How does it compare to your competitor's stock prices? If you work for a smaller company, what is the Owner doing? Are they buying a new car or a vacation home? Things might be safe unless they are looking to cash out and sell.

If you are in a technical field, can your specialty be done by a cheaper foreign imported worker, or someone much younger? Keep an ear out for word that the company is doing this with other workers, in other specialties. You might be next.

"https://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-disney-train-foreign-replacements.html"

In many cases you will get a feel for when things are taking a down turn. Don't wait until they are escorting you out the door to prepare. Educate yourself on your industry. Many times you can sense coming downturns by reading the news about problems in your industry's suppliers, or customers. Who buys what your company sells? Don't be a mindless drone.

Second, prepare yourself to look for work while you have a job. Update your resume. Check job sites like LinkedIn and see what kind of jobs you might qualify for. Think outside your own job type. If you are getting laid off, its a good chance other in your field are too.

Reach out and make contacts. Talk to people in business you have meet. Make connections now before you need them.

Paradoxically, just the acts of preparing to find a new job can sometimes make you more valuable to your present employer. Its a fact that if you have been out of work for a while you are viewed as less desirable to a new employer. And as scary as this may sound, be proactive. If a better job possibility presents itself, seriously consider taking a leap to a new job before you get laid off. You may buy yourself a few year's grace. Employers are often hesitant to get rid of a new hire.

Third, take a weekend and review your own personal financial situation. See what debts you have and more importantly what savings and resources you have. You should have already done your own "Financial Audit". If you haven't, then take a look at this post and get started. Start tightening your belt before you need to. That's one of the thinks we preach here on Green Wizards, get ready for economic downturns now, while you have the resources to learn how to do with less, with a bit of a cushion to get you through the mistakes.

Fourth, sit down with your Family and discuss the possibility of you being unemployed. Be honest. Talk about how it will affect everyone, and ask for suggestions how you all can prepare. It can be scary and for younger children especially confusing. Talk about ways you can all cut back on expenses now.

Fifth, if you don't already have one, get an emergency fund established pronto! Try and get at least 6 months of expenses in the bank. Cut up your credit cards and save.

More suggestions later.