4 Steps to Take if You Lose Your Job Near Retirement
Being let go from a job later in life can lead to financial disaster, but there are some things you can do to help lessen the damage.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter

Many people are finding themselves out of work right now, and some may be getting close to retirement. If you suffer a job loss near retirement, there are steps you can take to make sure your finances are safe.
1. Assess and Adjust Your Budget.
Do you know what you are spending money on every month? One of the first steps you should take after a job loss is assessing your budget. Sit down and make a list of all of your expenses. Determine what is essential, like your mortgage, car payments and health care. Are there places where you can cut back? You could get rid of cable or any streaming services. This may be difficult, but a smaller income means you need to have fewer expenses.
If you are close to retiring and hit with a job loss, depending on what your budget shows you, you may have to delay your retirement. This is a tough situation, and it’s an important time to meet with a financial adviser to see what may be the best plan for you.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2. Evaluate Your Savings.
This is an excellent time to look at what you have saved. If you were a budgeter before you lost your job, you should have a substantial emergency fund saved. Look at all of your accounts, and calculate how long they will last. If you are out of work for six months, will your savings last you?
Between employee retirement accounts and any personal retirement accounts you may have, you need to understand how much you have set aside.
If possible, roll your current 401(k) accounts into an IRA (opens in new tab). There are many low-cost investment options. You can roll your 401(k) into a traditional IRA without paying any income taxes. Or you can roll your contributions into a Roth IRA and pay income taxes now, so you can take money out tax-free in retirement. This will also help your money continue to grow tax-free. By rolling your accounts into a traditional or Roth IRA, you are putting this chunk of your money in one place, making it much easier to keep track of.
3. Assess Your Social Security Options.
Are you eligible for your Social Security benefits? The earliest you can take Social Security benefits is 62 years old (opens in new tab). For people born in 1960 or later, the full retirement age when you can collect 100% of your benefits, is 67. Claiming your Social Security benefits at 62 will lock you in at a lower amount because you need these benefits to last longer. If you wait until after 67 to claim them, they will grow 8% each year you wait until age 70.
Usually, I would recommend waiting until the full retirement age to claim Social Security, but if you need the income, this can be a good option for you.
4. Have a Plan in Place.
Whether it’s losing a job or encountering another type of financial crisis, we have to be ready to face it. Having a plan in place for that possibility is the best way to protect your finances and keep your retirement on track.
Also, remember that most of the time a job loss is temporary. While it’s very stressful now, it’s likely you’ll eventually return to having a regular income. Working with a financial adviser will help you put together the right plan for you.
Tony Drake is a CERTIFIED FINANCIAL PLANNER™and the founder and CEO of Drake & Associates (opens in new tab) in Waukesha, Wis. Tony is an Investment Adviser Representative and has helped clients prepare for retirement for more than a decade. He hosts The Retirement Ready Radio Show on WTMJ Radio each week and is featured regularly on TV stations in Milwaukee. Tony is passionate about building strong relationships with his clients so he can help them build a strong plan for their retirement.
-
-
Gaining More Certainty in Your Retirement Income Plan
Relying on market performance to close the gap in your retirement income could let you down, but a CD ladder and fixed annuities could provide some certainty.
By Cole Czajkoski, Investment Adviser Representative • Published
-
Considering a 1031 Exchange? The Rules You Need to Know
Taxes are an inevitable part of investing in real estate. You can, however, defer or avoid paying capital gains taxes by following some simple rules of a 1031 exchange. Yes, you read that correctly!
By Daniel Goodwin • Published
-
Gaining More Certainty in Your Retirement Income Plan
Relying on market performance to close the gap in your retirement income could let you down, but a CD ladder and fixed annuities could provide some certainty.
By Cole Czajkoski, Investment Adviser Representative • Published
-
Considering a 1031 Exchange? The Rules You Need to Know
Taxes are an inevitable part of investing in real estate. You can, however, defer or avoid paying capital gains taxes by following some simple rules of a 1031 exchange. Yes, you read that correctly!
By Daniel Goodwin • Published
-
Could ChatGPT and AI Change Delivery of Legal Services?
Two attorneys weigh in on whether artificial intelligence could become a legitimate (and trustworthy) way to get legal help in the future.
By H. Dennis Beaver, Esq. • Published
-
Financial Wellness Is Self-Care: 3 Steps to Help Improve Yours
Many people resolve in the new year to get healthier. Taking charge of your financial wellness can help improve your physical health by lowering your anxiety about money issues.
By Kara Duckworth, CFP®, CDFA® • Published
-
A Financial Review in Early 2023 Can Optimize Your Strategy
Look to build savings, reduce risk, minimize taxes and ensure a successful retirement by reviewing your budget, contributions, allocations and beneficiaries.
By Ken Nuss • Published
-
Want to Increase Income? Focusing on 5 Elements Can Help
There are multiple ways to generate income, but to make your money work for you, consider sustainability, maximizing, automation, reinvestment and tax efficiency.
By Jamie P. Hopkins, Esq., CFP, RICP • Published
-
Are Annuities Good Investments? Weighing the Pros and Cons
Love ’em or loathe ’em, annuities can be a smart investment tool for the right person under the right circumstances.
By Nate Miller, Investment Adviser Representative • Published
-
6 Questions Your Financial Adviser Should be Asking
To effectively help you with your retirement strategy, a retirement professional must get a clear picture of what you have and what you need.
By Tyler Hill, Investment Adviser Representative • Published