You’ve done everything right. You’ve bumped up your savings and massaged your stock allocations. You’ve even scoped out properties in that cute little beach town you like so much, a great place to buy a vacation home.
Then, wham! Your boss calls you in. The company’s downsizing-reorganizing-exploring strategic options-blah-blah-blah. Whatever they call it, you’re being forced out at what is probably the worst time possible. What do you do next?
As hard as it may be, try to stay positive. Don’t despair. “How many times has something happened to you that wasn’t part of the plan? But a year later, you were back to enjoying life,” says Tim Maurer, an Atlanta financial adviser.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
Look at your retirement goals, such as family, travel and hobbies, and think about how you can achieve them on a reduced income. “The numbers might be different, but you can still reach the same type of goals,” says Maurer.
First, review whatever severance package is available. What benefits are being offered? Take as much time as you can. Consult your financial adviser and a lawyer. “You might be owed severance pay, stock options or outstanding bonuses and commissions,” says Karen Birr, a financial adviser in Minneapolis. “These might be enough to bridge the earnings gap until retirement.” Some states allow you to receive both severance pay and unemployment benefits, while others do not.
Most importantly, check your health insurance. Are you eligible for COBRA? Can you get on your spouse’s insurance? Can you get another job — just something that will get you health benefits? Finally, you can get a quote for an Affordable Care Act plan — expensive, but premiums are capped based on your income.
Above all, recognize that your world has changed and you have to change with it. “Step back from any dreams and evaluate where you stand with savings and future retirement income,” cautions David John of AARP in Washington, D.C. “If this is it, what can you truly afford?”
Note: This item first appeared in Kiplinger’s Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.
Related Content
-
Decluttering Tips to Get a Head Start on DownsizingStrategies include starting small, adopting a system, getting help from others and being ruthless about what to keep, even when it comes to sentimental items or inherited possessions.
-
Seven Things You Should Do Before 2026 Because of One Big Beautiful Bill ChangesThe new law ushers in significant changes for most taxpayers. Make these moves now to take advantage of them.
-
FAFSA Advice for 2025A new federal financial aid application drops on October 1 — and being an early bird will likely pay off.
-
The '100% Overwhelming' Decision: What Do You Do About Medigap?Choosing your Medigap plan for supplemental insurance can be a complex, confusing, and costly process. Here's how to tackle the decision.
-
Three Striking Ways the 'Big Beautiful Bill' Affects Nursing HomesLittle-noticed provisions in the tax bill will ease requirements on nursing homes and make it harder for some patients to pay.
-
Surprising Foods to Enjoy and Avoid to Live LongerWant to live a longer, healthier life? Here are some surprising foods to enjoy (coffee!) and to avoid (some types of spinach!).
-
'Rich' Tricks to Volunteer and Donate in RetirementThere may be some tax benefits to giving back in retirement.
-
How StoryCorps Works and How You Can Tell Your StoryStoryCorps has recorded conversations between thousands of people, and anyone can participate. National facilitator Alan Jinich explains how to share your story.
