Getting laid off can be a harsh blow at any age. But at 61, it can be an extremely difficult thing.
Even if you’re well qualified to do what you do, employers may be hesitant to hire someone who’s perceived to be on the cusp of retirement. While age discrimination isn’t legal, it’s a pretty common thing for employers to pass over job candidates due to their older age.
Unfortunately, it sounds like you were forced to retire before you wanted. You wouldn’t be alone in that boat. A 2024 Transamerica survey of retirees found that 58% ended their careers sooner than they had planned. Among them, 43% cited employment-related issues. The median age of retirement was 62, three years younger than the traditional retirement age of 65.
Retiring at 61 could be particularly challenging because you’re still a year away from being eligible to claim Social Security (at a reduced rate, no less), and you’re also four years away from being able to get health coverage through Medicare.
So, rather than resign yourself to a forced early retirement, you may want to explore your options for being able to continue to work.
Losing a job in your early 60s can be financially and emotionally devastating. But that doesn’t mean you need to accept an early retirement.
Thanks to the booming gig economy, you may be able to go out and find work on your own terms. You could try consulting in your former field, starting a new business, or even embracing different side hustles to cobble together an income for a period of time.
A survey from Self Financial says that 33% of Americans ages 65 and over are looking into setting up side hustles. And people ages 65 and over earn an average of $581.32 per month this way. You, however, may be able to earn more if you’re passionate about what you’re doing and can dedicate more hours to it.
You may also be able to leverage certain job skills of yours into a new role you find rewarding. For example, if you were an office manager, you’re probably very organized. You could look into becoming a personal organizer, where you help clients get their homes in order. This is the sort of role you might find fulfilling and flexible, and it could end up being lucrative.
Another thing you can do is try seeking out free career resources to position yourself for a new full-time role. Sites like MyNextMove allow you to enter information about yourself to get guidance on a career pivot. LinkedIn also has free resources you can take advantage of.
And speaking of LinkedIn, don’t hesitate to try to network your way into a new role. Reach out to former colleagues and managers, friends, and members of your community to see who’s hiring or who can refer you.
Read more: The US stock market’s ‘fear gauge’ has exploded — but this 1 ‘shockproof’ asset is up 14% and helping American retirees stay calm. Here’s how to own it ASAP
Losing a job before retirement could be detrimental to your finances. Even though you’re old enough to tap an IRA or 401(k) plan without a penalty, you may not want to start dipping into your savings at such a young age.
Also, while you may be able to piece together enough of a part-time income to keep your savings untouched until you’re 62 and eligible for Social Security, claiming benefits at that age means reducing them by 30% compared to waiting until your full retirement age of 67. So that may not be ideal, either.
One thing you should do after getting laid off is put in a claim for unemployment benefits right away. You’re typically eligible if you were let go through no fault of your own.
You may also be eligible for severance pay from your employer. And if that severance is based on tenure and you were at your company for a long time, you may be entitled to a decent-sized payout.
That could buy you some time to figure out your next move without having to dip into your savings. Additionally, you should see if you have accrued vacation or sick time you’re eligible to get paid out on.
Another smart thing to do following a layoff is to see what expenses you can reduce — either temporarily or permanently. If you’ve been toying with downsizing, it could be a great time to do so if it saves you money on housing. And if you have a reason to hang onto a larger home, you may want to look at renting out a room for some income.
Also make sure to put health insurance in place following a layoff. COBRA might prove expensive, but you can explore options on the health insurance marketplace.
It’s also a good idea to talk to a financial advisor when you experience a major change in income like the loss of a job — especially if it happens at an age where you may be forced into an early retirement.
A financial advisor can help you assess your options and figure out the most efficient way to cover your expenses in the absence of a paycheck.
They may, for example, suggest switching to assets like bonds in your portfolio so you can generate income and reduce your risk at a time when you might need the flexibility to tap your investments.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
