Strategies for handling layoff near retirement

The first step, for those who may not have done so already, is to build a relationship with a trusted financial advisor or financial planner. Losing one’s job can conjure up a variety of emotions, so it is important to have a tranquil yet trusted professional on hand to help navigate the next steps.

Individuals nearing retirement age will become eligible for Medicare at 65, but until they are able to enroll, they must pay for health insurance out of pocket without an employer-sponsored plan.
Anspach recommends COBRA, which allows an employee no longer working with a company to retain that company’s health insurance plan for up to 18 months. Measures like COBRA were put into effect by the federal government to help soften the blow of a layoff.
Sometimes, there are silver linings to a layoff, like a severance package. Losing the guaranteed income a job provides is never good, but severance packages can help boost one’s retirement plan, providing an immediate compensation for the employee’s time spent at the company.

Anspach recalls several prior clients using severance packages to jumpstart their retirements, improving their financial situation in a way they didn’t expect.

For those who have already been laid off, Anspach recommends this:

Limit spending on inessential items. Disposables like vacations, subscriptions, gifts, etc. should be halted temporarily and replaced by a short-term mindset shift to limit spending. This immediately adds more cash flow into an individual’s life, and when things improve, those disposables can be brought back.
Keep your interests in mind. Find work part-time that incorporates your interests at a place that doesn’t require you to expend yourself unnecessarily. Approaching retirement age, you should have already saved up enough money that you don’t need to immediately dive back into the workforce on a nine-to-five basis.