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7 Tips for Protecting Your Retirement Plans After a Layoff

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Being laid off late in your career but before you want to retire can be very difficult. These seven tips can help you get back on your feet, stay solvent, and protect yourself.

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3. Trim your budget.

If your projections show you need to cut costs, there are many ways to do so, starting with essentials-like finding cheaper housing, getting higher deductibles on insurance, and choosing lower-cost transportation options, says Joyce Morningstar, a senior wealth manager with Dynamic Wealth Advisors.

If you live in a high-tax or high-cost area, consider moving to a cheaper region or renting out part of your house, suggests financial planner Paul Jacobs of Palisades Hudson Financial Group. And personal finance author Jean Chatzky, who runs the online Money School, recommends going through your monthly bills to see what you services you can shed or get a better deal on, like your cell phone, cable, and health club.

4. Reinvent your work.

Don't give up on the idea of working again. Be willing to rethink your career and settle for less pay than you were getting before, says Kentucky-based CPA and financial planner Mackey McNeill. Even if you find something part time or freelance, it will slow down the pace of drawing down your assets, which can make a big difference, he says.

With Baby Boomers hitting their sixties, there are now lots of online resources out there to help people find jobs later in life, such as Forty Plus, Retired Brains, and Senior Job Bank.

5. Stick to your Social Security plan.

Don't let your layoff force you to draw Social Security earlier than you'd planned if you can help it. Tapping your benefits early can cost you a lot long term, says Jacobs. You can start collecting any time between ages of 62 and 70, but for every year you wait, your check grows by about 6 percent. And there's good evidence that your portfolio will last longer if you live off of your own assets first so that you can delay drawing your Social Security, according to a study last April in the Journal of Financial Planning. For more help, check out AARP's Social Security Calculator or this calculator developed by economists Russell Settle and Jeffrey Miller.


6. Be strategic if you draw down investments.

There's nothing necessarily wrong with tapping the principal on your investments if you do it slowly, according to financial planner Douglas Goldstein, author of The Retirement Planning Book. A financial advisor can help you decide on a reasonable rate at which to draw down so that your money will last till the end of your life.

If you do decide to draw on your investments, you'll want to start with those that have a lower return-for example, pulling from a cash account that generates little interest before tapping an IRA, says planner Pierre Vogelbacher of PNC Wealth Management.

7. Get out and network.

After a forced retirement, seek out others who are going through the same experience, which will help reassure you that you're not alone or somehow defective, advises Larry Moskat of Retirement Income & Inheritance Advisors. "Networking will pay dividends in self-esteem, which in turn will fortify you to identify and move on to your next horizon," he says.

Patricia says that's part of what has kept her positive-she's set up a support group for young executive directors at her church, does fundraisers, and talks regularly to people in her network. "I'm not going to go down over this," she says.

Editor's Note: This article by Steve Yoder originally appeared on The Fiscal Times.

For more from The Fiscal Times:

6 Beautiful and Affordable Places to Retire Abroad

Ready to Retire? 7 Things You Need to Do Now


How to Get a Great Job...After You Retire!


Follow The Fiscal Times on Twitter @TheFiscalTimes.
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