Losing a job is never easy—but when it happens later in life, the challenges can feel even greater. Many people in their 50s are juggling significant financial responsibilities, like mortgages, supporting kids through college, or helping aging relatives. When they’re laid off, finding a new role that offers comparable pay and benefits can be a real uphill climb. This concern is growing across both private companies and government agencies as workforce reductions continue.
Why It’s Such a Problem
For workers in their 50s and early 60s who want to keep working, being laid off often leads to longer periods of unemployment. According to the U.S. Bureau of Labor Statistics, job seekers aged 55 to 64 spend nearly 26 weeks, on average, looking for new work. That’s about 7 weeks longer than their younger counterparts aged 25 to 34.
What’s more, people who are let go in mid-to-late career are less likely to make a successful shift into a new industry compared to those who leave jobs by choice. Some end up dipping into savings or starting Social Security earlier than planned, which can reduce their overall retirement income. They also miss out on contributing to retirement plans like 401(k)s or IRAs—especially important catch-up contributions available to those 50 and older.
Why Finding a Job Takes Longer
Age-related bias in hiring still exists. Some employers wrongly assume older workers are less adaptable to new technologies or that they’ll retire shortly after being hired. In reality, many older professionals hope—and need—to stay employed well into their 60s or beyond. Still, it can take longer for them to land a new job, and salary negotiations can also be tricky. Older workers may expect higher pay, while employers may be reluctant to match those expectations.
There’s also a numbers issue: senior-level roles like director, VP, or manager are simply fewer than entry- or mid-level roles. To improve their chances, older job seekers can tap into their professional networks, remain active in industry groups, and maintain a visible presence on social media platforms like LinkedIn.
Average Retirement Age
If you’re laid off in your 50s, it can feel like you’re behind—especially when more Americans are working longer than ever. Since 1991, the average retirement age has climbed by about three years, thanks to longer life spans, better health, and the shift toward less physically demanding work.
At the same time, the shift from traditional pensions to 401(k)-style plans has left many people feeling less confident about their financial security. The average age for claiming Social Security benefits has also moved up, from 63 to 65 over the last two decades. That’s generally a good thing for income. For each year you delay collecting benefits between ages 62 and 70, your monthly checks can grow by up to 8%, according to the Social Security Administration.
Retirement Expectations Vs Reality
A common strategy to boost retirement security is to work longer—either by staying in your current job or finding something new post-retirement. One way to do that is by shifting into a reduced role, like part-time work or freelance projects. It’s a flexible option that lets people stay active without committing to a full-time job.
However, these types of positions are often only available to those with highly specialized experience. And some may decide the effort of a job search isn’t worth it if they only plan to work for a few more years.
This is why preparing early is so important. Knowing you could face a late-career job loss makes a strong case for saving as much as possible earlier in your career. Want to explore more ways to save and build income for retirement? We’re here to help. Guaranteed income options (backed by the claims-paying ability of the carrier) for retirement could be worth considering. Reach out to us to learn more.
Source: The Wall Street Journal (1), The Wall Street Journal (2)