Fired before I'm FIRE ...

[AboutThere]

Just fishing for whatever tips you all might have, especially from those who have been laid off unexpectedly.

Company is under new ownership and I'm VERY worried that I'll be targeted for a layoff and I'm maybe 3 years short of FI. Middle management type. Mid-50s, no kids at home. I expect a protracted job search and a large reduction in salary if/when I find something.

It looks like they are offering a severance that would result in maybe 25,000 before taxes. I hope.

We can pay our bills (but not maintain our current standard of living) on DW's reliable safe job. Hopefully won't need to withdraw from my modest 401k but won't be making any travel plans.

I'm looking for any general tips; I've already decided to sell off one newer car and buy a 10-year old beater. Looking at trimming any other expenses as well.

Any tips on what to do with a 25,000, which will be the largest single chunk of money I'll ever see. I don't even know what other questions to ask. Appreciate any help.

 

[davebarnes]

Don’t sell the car.
Remember: “Don’t Panic.”
Give a lot more data.
So many people are willing to help here.

 

[Aiming_4_55]

You say you are worried that you will be targeted, then you note 25k severance. Were you notified of actual layoff?

Use up as much healthcare, dental, vision, FSA benefits as possible. You could use up the full year of FSA and get reimbursed and not make any more payments once laid off. If still on the job, see your Dr for stress and anxiety, and may get short term disability for a few months. If possible, increase 401k to get more match if possible and within your budget.

If notified of layoff, regardless of what they offer you, you can ask for more. They might decline, but so what.

Hold onto the car as you might still need it, also if 2 - 3 years old, it probably took a hit on value already.

 

[AboutThere]

No notification of layoff but that's what another person received who worked on a similarly dead-end program. Basically, I'm in expert in a thing that isn't relevant any more.

Hmmm, I thought ditching the car would be a no-brainer I will think that one over

 

[AboutThere]

Don’t sell the car.
Remember: “Don’t Panic.”
Give a lot more data.
So many people are willing to help here.

"Don't panic" is a very good tip - Thanks!

(Not sure what other data to give )

I did just find out that I can access my 401k without penalty as I'm over 55, so that's helpful. Thought I had to wait until 59.5

 

[Katiek]

I hope it won't happen, but if it does, I'd keep the severance in liquid, safe investments since it sounds like you may need it for some living expenses while you look for a new job. Also, it sounds like you have time before any job loss. You may want to use this time to see if there are any skills you should update or connect with some people who could be useful in a job search.



Good luck!

 

[njhowie]

If you see what is coming, then don't sit around waiting for it, make your move now.

Update your LinkedIn profile. You're an expert in your thing, so start looking for another employer who needs your expertise. You may be surprised. If there are none, and the thing is totally obsolete where nobody will pay for your expertise, then start training for the new thing to enhance your background and become more valuable. Unemployment is at record lows, there are more positions available than qualified people to fill them. If you don't fit exact job requirements, apply anyhow - middle management is still needed at megacorps.

Maybe you get the $25k severance or not. Start your search now and get offers. If you get an offer, consider leaving on your own without the severance. Will $25k compensate for your down time if you first start looking/training when let go? Don't start thinking about accessing the 401k - find another job.

As far as cutting expenses - there's always room for that. Drop/reduce your cable, landline and cellphone plans. Get a basic internet only plan for home, pick up a Roku, and go OTA for local stations. For cellphone, get a cheap/decent Android and get a $30-$40/month plan. The T-Mobile $55/month plan for two lines is still available for folks 55+ ( https://www.t-mobile.com/cell-phone-plans/unlimited-55-senior-discount-plans ). Review your home/auto insurance policies with your insurer and see if there's any place to reduce premiums or qualify for additional discounts. I called my carrier a few weeks ago for something and out of the blue the rep said if I switched to online statements instead of mailing they'd give me $40/year discount. No brainer. Basically, go through your monthly expenses, sort them from most expensive to least expensive and just go down the list seeing where you can reduce. Don't worry about the cheap stuff - concentrate on reducing the expensive stuff.

 

[Bryan Barnfellow]

Can you consult to former customers and to new ones in your declining field of expertise? Might be a lot easier than finding a new salaried job. Can your spouse work a bit longer to tide over the finances and let the 401(k) grow more? I would forget for now about maintaining your lifestyle level and instead pare down to a quasi-survival budget that focuses on the endgame: retirement. It's easier at your age now to endure these cuts than in the more uncertain later decades.

Best of luck. Let us know what happens so that we can offer more tailored advice.

-BB

 

[Golfquest20]

You're in a better position than many single income families might be...with DW's reliable safe job in addition to yours. So you're not in a desperate situation, and as others have said; I would save the $25K severance if it materializes, in something liquid. This buys you more time to consider your options.

If you seek additional feedback that is specific, perhaps you could provide more detail re monthly expenses (fixed/discretionary), monthly income situation now vs. if you are laid off, etc.

Good luck!

 

[ShokWaveRider]

I would have thought that a total asset, future income and expenses evaluation would be in order. Here are some questions I would ask myself, not in any particular order.

1) Is your home paid for?
2) What is your HC situation, does DW's employment cover that?
3) Other than the car what other major assets do you have, rental property etc?
4) Are you in a LCOL, MCOL or HCOL area of the country
5) Are you job skills marketable, do you intend to ER or job search?
6) What are your current expenses?

Good luck and we will try to help as best we can. We do need a little more info though.

Here is a source of some addition questions: https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

 

[Dtail]

I believe the more data comment relates to if you are willing to supp,y us with more financial data on income/investment $ including AA allocation/spending.
Perhaps you are in better shape than you think.

 

[atmsmshr]

If you get the $25k, keep it in a stable account like savings, checking or MM. You can't afford to gamble in stocks.

Consider signing up for a HELOC now while your income can still be counted.

Try to leave the 401k alone. Any loan against the plan will have to be paid in full upon severance from the company.

You are in luck right now, the economy is booming and job openings are going unfilled. You might wind up working in a much lower paying job to start, and climb up the salary ladder from that position.

 

[Markola]

It’s happened to me, too, TWICE! My biggest tip is, look for opportunities in this challenge:

- Stay completely positive, understanding and PROFESSIONAL at work about this whole matter. It is not easy on whomever is tasked with making these cuts. If you help them out by not making them feel even more horrible, it will help YOU, so that’s why you adopt that mindset vs. the people who will go negative. It will help you stand out. Maybe you offer to do contracts if it assists their transition. Tell them your goal is a very reference in your next search and so how can you help through this time and wrap up smoothly. If you walk into a lay-off meeting prepared with that understanding mindset and you will win hearts, minds and help that could be valuable.

- If you are only three years from FI, you have options. Get your 401K Rule of 55 lined up. Maybe you can transfer into it some or all of an IRA so that it isn’t modest any longer. Learn the rules.

- Car: I’m in the camp of “sell it” if it increases cash flow. This is also a time of focusing and valuing what is real in your life and what are fake status symbols. Sorting out wants vs. needs can be cathartic and helpful to your mindset and cash flow.

- Let your spouse know you appreciate her being in this with you. Wake up every day when she does. Get right back on the horse and look for a job every day. Make her supper every night. Do all the shopping, looking for bargains, and housekeeping.

There is a good chance you will come out of this in fine shape in a fresh new situation that you’ll be happy about after you look back in a few years, so, given the choice, why not choose positivity?

Good luck!

 

[DrRoy]

If you get the $25k, keep it in a stable account like savings, checking or MM. You can't afford to gamble in stocks.

Try to leave the 401k alone. Any loan against the plan will have to be paid in full upon severance from the company.

+1

 

[Red Badger]

If you see what is coming, then don't sit around waiting for it, make your move now.

Update your LinkedIn profile. You're an expert in your thing, so start looking for another employer who needs your expertise. You may be surprised. If there are none, and the thing is totally obsolete where nobody will pay for your expertise, then start training for the new thing to enhance your background and become more valuable. Unemployment is at record lows, there are more positions available than qualified people to fill them. If you don't fit exact job requirements, apply anyhow - middle management is still needed at megacorps.

Maybe you get the $25k severance or not. Start your search now and get offers. If you get an offer, consider leaving on your own without the severance. Will $25k compensate for your down time if you first start looking/training when let go? Don't start thinking about accessing the 401k - find another job.

As far as cutting expenses - there's always room for that. Drop/reduce your cable, landline and cellphone plans. Get a basic internet only plan for home, pick up a Roku, and go OTA for local stations. For cellphone, get a cheap/decent Android and get a $30-$40/month plan. The T-Mobile $55/month plan for two lines is still available for folks 55+ ( https://www.t-mobile.com/cell-phone-plans/unlimited-55-senior-discount-plans ). Review your home/auto insurance policies with your insurer and see if there's any place to reduce premiums or qualify for additional discounts. I called my carrier a few weeks ago for something and out of the blue the rep said if I switched to online statements instead of mailing they'd give me $40/year discount. No brainer. Basically, go through your monthly expenses, sort them from most expensive to least expensive and just go down the list seeing where you can reduce. Don't worry about the cheap stuff - concentrate on reducing the expensive stuff.

This. +1+1+1+1

 

[mystang52]

1. Update your resume now.
2) Then begin your new job search By the time you've interviewed, and perhaps offered a job, you could have a better grasp of your job security at your current job. I
3) Most importantly, if you're only 3 years from FI, cutting expenses right now can quite quickly shorten that time frame. If you keep your current job, then you only need a couple of years to reach FI. If you are laid off and have to take a pay cut in a new job, you're already used to your lower-expense lifestyle and will still meet your goal if FI.

FWIW I t was laid off at 58, got another job after a few months with a pay cut, and it did not affect my long term ER plans. You can do this.

 

[candrew]

Found myself in a similar spot back in 2008 when health care mega-corp was acquired by a bigger fish. I was not relishing the thought of making a career change at 51 years of age. Especially considering that we had a great team that I was privileged to w*rk with and only a 5 mile daily commute by bicycle! Prior to the take over, I reached out and learned that my particular role/title in middle management would not be a part of the future state of affairs. Taking a proactive approach is best as others on this thread have pointed out. I also updated my resume, Linked in profile and began to make under the radar inquiries about opportunities elsewhere. One other step that I took was to re-write my current j*b description that included a title change and change in scope of responsibilities. It actually worked! I took a relatively minor haircut in salary but was able to remain in a bit of a lesser role at the same facility, with the same team of individuals and ride it out until E.R. in 2016.

Obviously, your circumstances may be entirely different than were mine.

 

[mountainsoft]

Company is under new ownership and I'm VERY worried that I'll be targeted for a layoff and I'm maybe 3 years short of FI. Middle management type. Mid-50s, no kids at home. I expect a protracted job search and a large reduction in salary if/when I find something.

I'm sorry to hear about your situation.

Hope for the best, but plan for the worst. Unless you receive a real indication that your job is ending, don't assume it is all over.

We went through something similar last year. There was a blowup at my wife's work and in the haste to fix things her boss targeted my wife and put her on a PIP threatening termination in writing. With over 30 years at the organization and only 3-4 years till we retire we decided to ride it out. It would be easier to find a job while still working, but we hoped it wouldn't come to that. In our situation, the PIP expired successfully and the boss ended up retiring. We were lucky, and unless something else comes up we are expecting smooth sailing till retirement. Good outcomes ARE possible!

We can pay our bills (but not maintain our current standard of living) on DW's reliable safe job.

Could you start a side hustle to earn a little extra money on the side until you retire? This could be helpful even if you don't get laid off.

If you do get fired, you don't necessarily need to stay in middle management. Find something you enjoy for the 3 years or so until you are ready to retire. This may mean pushing back retirement a year or two, but I would rather do something I enjoy for 5 years than something I hate for 3 years.

I'm looking for any general tips; I've already decided to sell off one newer car and buy a 10-year old beater. Looking at trimming any other expenses as well.

Don't be afraid to lower your standard of living. You might be surprised to learn bigger and newer isn't always better. The less you spend, the less you will need for retirement, which may mean retiring earlier. Rather than spend thousands on international travel, maybe spend a few hundred traveling locally. Make meals at home and eat out less. Drive older vehicles you pay cash for. Pay off any debt you have and don't add more. If you have a large house, maybe sell it and move to something smaller and more affordable. Learn to do things yourself (DIY) so you don't have to pay others for simple tasks. Cancel any subscriptions you are not using, and seek out less expensive plans for the services you do use.

Live a life you enjoy, not one that will impress the Jones'. The Jone's don't care anyway... Remember, it's all just stuff and you can't take it with you...

 

[Gallaher]

Same happened to me. Planned to retire at 60 when I was Ready. Got downsized at 57.5.
It turned out I was more than prepared than I thought.
Ultimately, I wish I had retired earlier.
After retirement you don’t contend with the same level of taxation as you do when drawing a paycheck.
You may be more prepared than you think...like I was.

 

[gayl]

I hope it won't happen, but if it does, I'd keep the severance in liquid, safe investments since it sounds like you may need it for some living expenses while you look for a new job. Also, it sounds like you have time before any job loss. You may want to use this time to see if there are any skills you should update or connect with some people who could be useful in a job search.



Good luck!

Apply for UIB the day you're laid off. IF you need to keep working, join their job searching 'club' whatever it's called (it's EXPERIENCE UNLIMITED here)

 

[AboutThere]

Wow, well thanks everyone.

To just kind of jump around, I'll provide the following:

I'm willing and ready to do something else. I'm not worried about a cut in pay I'm really just worried about getting hired at all at my age.

I'm over 55 so no penalty on a 401k withdrawal but I think the severance will get me through a year of a search if, as you all suggest, I keep it liquid.

I was fully in pay-down bills, do home repairs, etc mode to prep for ER- and luckily almost done with that, so I don't anticipate big expenses on the horizon.

Health Care is solid so no worries there.

Not sure about consulting but I don't think that will work, in my field, as Heidi Klum says, "you're either in or you're out"

 

[AboutThere]

It’s happened to me, too, TWICE! My biggest tip is, look for opportunities in this challenge:

- Stay completely positive, understanding and PROFESSIONAL at work about this whole matter. It is not easy on whomever is tasked with making these cuts. If you help them out by not making them feel even more horrible, it will help YOU, so that’s why you adopt that mindset vs. the people who will go negative. It will help you stand out. Maybe you offer to do contracts if it assists their transition. Tell them your goal is a very reference in your next search and so how can you help through this time and wrap up smoothly. If you walk into a lay-off meeting prepared with that understanding mindset and you will win hearts, minds and help that could be valuable.

- If you are only three years from FI, you have options. Get your 401K Rule of 55 lined up. Maybe you can transfer into it some or all of an IRA so that it isn’t modest any longer. Learn the rules.

- Car: I’m in the camp of “sell it” if it increases cash flow. This is also a time of focusing and valuing what is real in your life and what are fake status symbols. Sorting out wants vs. needs can be cathartic and helpful to your mindset and cash flow.

- Let your spouse know you appreciate her being in this with you. Wake up every day when she does. Get right back on the horse and look for a job every day. Make her supper every night. Do all the shopping, looking for bargains, and housekeeping.

There is a good chance you will come out of this in fine shape in a fresh new situation that you’ll be happy about after you look back in a few years, so, given the choice, why not choose positivity?

Good luck!

Thanks so much

I haven't been without a job for more than a day in many decades, so I appreciate the tips and the positive spin because I'm absolutely not in that space right now.

 

[Ducati52]

Try to leave the 401k alone. Any loan against the plan will have to be paid in full upon severance from the company.

This often gets forwarded as a universal truth, but it's not. It depends on your 401k plan; read the fine print or talk to the plan administrator.

I had a 401k loan 5-6 years ago to help pay for some very high medical bills. I left the company with a balance left on those loans, and as long as I kept the 401k open with my ex-employer and set up an auto-debit from my checking account for the twice-monthly payments, I was allowed to continue to pay off the loans per the schedule.

In your instance, however, I don't think you'll need to go down the 401k loan route.

On other thing: For anyone currently working, you should be spending time on LinkedIn. Your page should *always* be up-to-date with your resume, accomplishments, accreditations, etc. Definitely make sure your Skills and Endorsements are current, and "tailor" them towards the job you want, not the job you have. Recruiters search on those, and you want to pop up on their radar.

Continue to build up your network, and then keep in contact with those people, even with just a simple "congrats on the new job!" or "That was an interesting article you linked to." That way, when you reach out to them and let them know you're looking for a new opportunity, they don't think "this guy hasn't said "boo" to me for five years."

Lastly, is this perhaps an opportunity to do something completely different in your last few working years? Ever wanted to try teaching? Most districts allow you to substitute with just an undergrad degree in any subject, and most are starved for substitutes. Once you're registered and pass the background checks, etc., our local district has a site where they post the open positions every day, and you choose which one you'd like to take (or just decide you'd rather not work that day.) Or maybe you'd like to work at a ski resort, or a motorcycle shop, or a non-profit, or . . .?

The good thing about your situation is you have some time to plan and execute before you're downsized. And if it doesn't happen, you've still taken steps to better position you for the next phase of your career, or your retirement.

Good luck!

 

[AboutThere]

This often gets forwarded as a universal truth, but it's not. It depends on your 401k plan; read the fine print or talk to the plan administrator.

I had a 401k loan 5-6 years ago to help pay for some very high medical bills. I left the company with a balance left on those loans, and as long as I kept the 401k open with my ex-employer and set up an auto-debit from my checking account for the twice-monthly payments, I was allowed to continue to pay off the loans per the schedule.

In your instance, however, I don't think you'll need to go down the 401k loan route.

On other thing: For anyone currently working, you should be spending time on LinkedIn. Your page should *always* be up-to-date with your resume, accomplishments, accreditations, etc. Definitely make sure your Skills and Endorsements are current, and "tailor" them towards the job you want, not the job you have. Recruiters search on those, and you want to pop up on their radar.

Continue to build up your network, and then keep in contact with those people, even with just a simple "congrats on the new job!" or "That was an interesting article you linked to." That way, when you reach out to them and let them know you're looking for a new opportunity, they don't think "this guy hasn't said "boo" to me for five years."

Lastly, is this perhaps an opportunity to do something completely different in your last few working years? Ever wanted to try teaching? Most districts allow you to substitute with just an undergrad degree in any subject, and most are starved for substitutes. Once you're registered and pass the background checks, etc., our local district has a site where they post the open positions every day, and you choose which one you'd like to take (or just decide you'd rather not work that day.) Or maybe you'd like to work at a ski resort, or a motorcycle shop, or a non-profit, or . . .?

The good thing about your situation is you have some time to plan and execute before you're downsized. And if it doesn't happen, you've still taken steps to better position you for the next phase of your career, or your retirement.

Good luck!

Thanks for writing this: I really appreciate these thoughts and others by the other folks.

 

[corn18]

Try to leave the 401k alone. Any loan against the plan will have to be paid in full upon severance from the company.

Depends. We just merged with another megacorp. My original 401k required us to pay back 401k loans within 90 days of leaving the company. The new plan leaves the loan in place as is, so just keep making payments on the same schedule you were on.