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Life Planning

Unplanned Retirement? 10 tips to protect your nest egg while you consider your next move

Tags: Career, Financial security

Losing your job is a significant setback at any stage of life. While younger workers have time to bounce back, for unexpectedly unemployed people in their 50s, time and a fast-changing employment landscape aren’t on their side. On top of that, they now have the added worry of having to bridge their income until Social Security benefits kick in.

Consider these 10 tips to help protect your nest egg and maximize your financial and emotional well-being.

Make a financial plan.
Review your finances and determine which expenses are fixed or discretionary, then make a realistic monthly budget and stick to it. Consider building your budget around financial goals — for example, paying off debts or saving for your children’s education. With your goal-focused budget in hand, consult with a financial professional to see when you can comfortably retire and learn how much you’ll need to earn to bridge the gap and achieve your goals. You may not need to earn as much in your next job to reach your target, which could increase your options.
Review your debts.
If you have a lot of debt, you will want to limit discretionary spending to avoid adding new debt. Some mortgage and credit card companies will allow you to reduce or halt payments for a time. Personal loan and credit card debts are usually more costly, so tackle them first. You may be able to consolidate multiple debt payments or move some debt to a zero-interest credit card.
Tap into savings.
Hopefully, you have some emergency savings that can be easily accessed. A good rule of thumb is 3–6 months of savings to cover your fixed expenses. If you don’t have enough resources to cover ongoing bills, it’s reasonable to tap into your 401(k). Remember, there may be tax implications. More importantly, withdrawals today will reduce your income potential when you reach retirement age.
Take stock of healthcare options.
If you’re forced into early retirement and waiting for Medicare to kick in at 65, usually the most cost-effective health insurance option, if available, is joining a spouse’s employer-sponsored plan. Otherwise, consider continuing coverage through a former employer under COBRA or browsing options with potential subsidies through the Affordable Care Act marketplace. You could also consider part-time work. Even if it pays less, having access to some healthcare coverage can reduce your out-of-pocket costs.
Claim your benefits.
File for benefits with your state’s unemployment office promptly. You must be unemployed without cause and meet the minimum wages earned before the time of claim and any specific state requirements.
Leave the door open.
Carefully review all the information your employer has given you for any discrepancies. Note when your last paycheck is dated and see if you’re owed any unpaid compensation in the form of bonuses, stock options, commissions or other benefits. These benefits can include no-charge support services that can help during your career transition. Despite your disappointment, always try to leave on good terms. There may be a chance to get rehired or provide consulting services. Additionally, you will likely ask them for a recommendation in the future.
Tap into your network.
To begin, update your résumé with your skills and qualifications to emphasize your experience and achievements. Practice interviewing, update your social media profiles and start networking through LinkedIn to make new connections and restore old ones who might know of potential opportunities. Many jobs aren't advertised and are instead found through word of mouth.
Consider a career pivot.
Finding employment is a full-time job. It’s never too late to learn new skills — look for online courses that will equip you for the new future of work. A severance package could help fund training for a new career. You could put your experience to work in a consulting role.
Focus on self-care.
Losing your job can evoke negative emotions that you’ll need to manage. Consider professional counseling. Talking to family and friends can give you valuable perspectives that help you manage the emotional and financial challenges during your career transition. Finally, don’t neglect your health. Staying active is a simple way to boost your mood. Online exercise classes or walking can optimize your health and well-being.
Turn an early retirement into a positive
Challenges and setbacks can lead to new beginnings. An unexpected retirement in your 50s can give you the space to explore new avenues you would have otherwise been too busy to consider. Turn it into a catalyst for positive change in your working and personal life.

An open mind and positive attitude about job opportunities, industries and geographic locations may help increase your chances of landing a new position. Some sectors are more resilient and may rebound more quickly than others. Try to identify which of those need your skills or experience. The best years of your working life may still lie ahead.

Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (NY, NY), Equitable Financial Life Insurance Company of America, an AZ stock company and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN).