Editor’s note: This column was originally published in February 2019. It has been updated to reflect current news.
Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career, ripe with upward mobility. It’s as scary and troublesome as unchecked credit card debt or an expensive chronic health condition.
This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives.
Even assuming you can clear the mental challenges in losing your job, the financial and administrative obstacles can leave you feeling like a Rube Goldberg machine.
Income, health insurance, life insurance, disability insurance, bills, expenses, short-term savings and retirement savings are all immediately important in the face of a job loss. Never mind your Parent PLUS loans, financially dependent aging parents and boomerang children, which might all be lurking as well.
Layoffs have been in the news this month. Several big-name companies have already announced 2024 job cuts, including Amazon, eBay and Google.
It remains to be seen whether this year will play out like 2023, which yielded more than 300,000 layoffs, according to Forbes, which tracks major announcements.
In the tech sector, at least, job cuts are fewer this year than last. Another layoff tracking site, Layoffs.fyi, reports that 76 tech companies had announced 21,370 layoffs through late January. By contrast, 277 firms had laid off 89,709 workers through January 2023.
But some economists foresee more layoffs to come, amid talk of a possible economic slowdown later in 2024.
1. When does your income stop?
From the shocking moment people learn their job is no longer their job, the word “triage” must flash in bright lights like an obnoxiously large sign in Times Square.
This is more challenging than you might think. Like a pickpocket bumping into you right before he grabs your wallet, the distraction is the problem that takes your focus away from the real problem.
Triage is hard to do, because of the emotion that arrives with the dirty deed. The mind immediately begins to race to sources of money and relief. Unfortunately, that relief is often found in the wrong place.
The first thing you should do is identify the exact day your job income stops arriving. That’s how much time you have to defuse the bomb. Your fuse may come in the form of a severance package, or work you’ve performed but haven’t been paid for yet.
2. When do benefits kick in?
Next – and by next, I mean five minutes later – explore your eligibility for unemployment benefits, then file for them if you’re able. In some states, severance pay affects your immediate eligibility for unemployment benefits. In other words, you can’t file for unemployment until your severance payments go away.
Assuming you can’t just retire at this moment, which you probably can’t, you must secure fresh employment income quickly. But “quickly” is relative to the length of your fuse. I’ve witnessed way too many people miscalculate the length of their fuse.
If you’re able to get back to work quickly, the initial job loss plus severance pay ends up enhancing your financial life. If you take too much time, by your choice or that of the cosmos, “boom.”
The next move is much more hands-on and must be performed the day you find yourself without a job.
3. What nonessentials do I cut?
Grab your bank statement, a marker and a calculator. As much as you want to pretend it’s business as usual, you shouldn’t. Identify expenses that don’t make sense if you don’t have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and maybe permanently. Though this won’t necessarily lengthen your fuse, it could lessen the severity of a potential “boom.”
Google layoffs 2024: Hundreds of employees on hardware, engineering teams lose jobs
The idea of diving into your spending habits on the day you lose your job is no fun. But when else will you have such a powerful reason to do so? You won’t. It’s better than dipping into your assets to fund your lifestyle. And that’s where we’ll pick it up the next time.
We’ve covered day one. In a follow-up column, we will tackle day two and beyond.
Peter Dunn is an author, speaker and radio host. The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.
This article originally appeared on USA TODAY: Laid off before retirement? What to do after losing a job in your 50s.