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When You Have To Retire due to COVID-19
Here’s a stunning fact: The Bureau of Labor Statistics reports that unemployment during the pandemic for workers 55 and older jumped from 3.3% in March 2020 to 13.6% in April 2020. The numbers settled down in the later months, but the question remains: What happened to those older workers laid off from April to July, when the rate remained a high 8.7%?
This type of extended unemployment or forced retirement can cause people to fall completely off the career ladder in their field, leaving them in a difficult spot where they rely on their limited remaining unemployment benefits as they figure out what’s next.
The exact path forward from forced early retirement isn’t the same for everyone. Some people may choose to completely retire and live off their retirement savings and Social Security. Others may chart some way to re-enter the workforce. Let’s take a look at some of the options available to folks who found themselves in forced early retirement due to COVID-19.
Six steps to take after getting laid off
This situation presents a spectrum of options, ranging from trying to get back into your previous field, looking for a parallel field into which you can transfer skills, starting over professionally, or simply retiring for good.
Lean in on personal and professional relationships
If you’re hoping to stay in your current field, job searching is an obvious next step, but don’t just spend your time looking at Indeed and other job listing sites. Instead, reach out to people that you have worked with and had a positive relationship with in the past and see what opportunities they may know about.
Do your contacts know of any jobs in your previous field that you might be a good fit for? Are they willing to provide a reference to you if you seek a new job in this field or a related field? Can they recommend you internally for any open positions?
Often, the path out of an unwanted early retirement back into your old career path is through an old contact. That personal connection matters, both between you and that person and between that person and the job you may be able to get.
Consult or freelance
If you want to stay in your current field but there aren’t any employment opportunities available to you, consider using your skills for freelancing or consulting work. While this may not be the outcome you desire, as freelancing and consulting work comes with fewer professional benefits, it does allow you to keep your feet in the field and keep income coming in.
If you’re looking for quick and very simple freelancing opportunities, consider looking at Fiverr, which will provide small but simple freelancing jobs. For more challenging and more lucrative opportunities, take a look at Upwork. You may also want to look at any consulting opportunities with previous employers as a starting point.
Evaluate your skills
If you don’t have any such opportunities available to you, this may be an opportunity to step back and evaluate your skills from the perspective of considering what fields might actually be a good fit for you. What fields are open to you with the skills you’ve acquired in your previous career?
For example, although I was once in the data mining profession, I spent a lot of my professional time on documentation, report writing, and communication with collaborators. Those skills set me up for a new career path as a freelance writer.
Step back and look at the skills you’ve accumulated and ask yourself what career paths those skills might be a great fit for. You might find that the things you’ve learned lead you to a completely different destination.
Start a new career
If it appears as though your old career path is a dead end, it may be time to consider a new career entirely.
A good first step here is to take some skills assessments. Minnesota State University provides a great list of skills assessments for people considering a career path. These will often clearly illustrate what natural talents and skills you have and can point you toward some careers you might be suited for.
From there, you can assess some entirely new career options. Do you need further education? Do you need to go to a trade school? Maybe you just need to do some independent learning.
Downsize your lifestyle
From a practical perspective, unexpected forced early retirement likely means that you need to downsize your lifestyle. In the short term, you likely made a bunch of easy decisions about your spending choices, but if this is a more permanent change or one that will last years, you should start considering bigger changes.
Start with housing. Can you move to a smaller home or into an apartment? Can you share your living space with someone else in order to offset some of the costs? For transportation, do you need a car or can you get by with mass transit options, bicycling, and/or carpooling? Do you need a data plan for your cellphone? What about cable?
When you chop away a bunch of bigger expenses, suddenly the challenge of figuring out how to financially make it on a lower income becomes much easier.
Recalibrate your investments (if you have them)
If you’re fortunate enough to have investments put aside for retirement, the moment at which you’re forced into early retirement is a moment to consider recalibrating your investments into “retirement mode.” The reason is that, in effect, you’ve become a retiree who wants to be able to live off of those investments for as long as possible, and thus retirement requires a different investment strategy than trying to grow wealth over the long term.
How does a retiree approach investing, then? Someone who is more than 10 years from retirement doesn’t plan to withdraw anything over that period, so they’re likely invested in a very aggressive way. A fresh retiree will likely need to make withdrawals in the next 10 years, so that money should be invested in a more stable fashion with less volatility.
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