"Get Your Finances Ready for Retirement,"-Baby Boomer Survival Guide
Monday, April 06, 2009SUSIE GHARIB: Among the five million Americans who've lost jobs in the recession, many are baby boomers. With a bleak outlook for the labor market, many of those laid-off workers are now thinking about retiring early. As we continue our series "Get Your Finances Ready for Retirement," Joe Collum looks at the challenges facing unemployed people in their 50's and 60's.
JOE COLLUM, NIGHTLY BUSINESS REPORT CORRESPONDENT: Margaret Davis has been cutting a lot of coupons over the past six months, since she was laid off from her job as an executive at a Charlotte, North Carolina, construction company. For now she's surviving on unemployment checks and cutting back on everything from groceries to entertainment.
MARGARET DAVIS, LAID-OFF EXECUTIVE: I've naturally pinched pennies. My pennies are screaming.
COLLUM: As she looks for another job in Charlotte, where the unemployment rate hovers around 10 percent, Davis's quandary is complicated by her age. Even though she had no plans to retire, the 62-year-old fears she may be forced into retirement.
DAVIS: I'm very proud of my age. I'm very happy and feel blessed to be the age that I am. However, it's discouraging to the point that an employer would not see the value (INAUDIBLE) that I possess.
COLLUM: Davis is not alone, as this job support group as St. Johns Episcopal Church shows. She is among many over-50's who come here every week for advice on how to find work. Thomas Strini for example, is a 60- year-old IT engineer who's been out of work for five years. Strini says employers keep telling him he's got too much experience. Is that code for something?
TOM STRINI, LAID-OFF I.T. ENGINEER: I think it is. I've actually had a couple of recruiters who were candid in telling me that they have a hard time placing older workers with most companies.
COLLUM: Getting laid off from an office job means that, at least you'll have the possibility of going back to work sometime in the future. But what if you're forced to stop working because of a health problem? That's a situation that's hit blue collar workers especially hard and for many former workers at the freightliner truck factory in Mount Holly, outside Charlotte, it means they have very limited options.
BOB RIGGINS, BENEFITS REP., UAW LOCAL 5285: A lot of our guys have had restrictions that have been imposed by doctors over years for various ailments that they've incurred in work-related jobs and that kind of thing.
COLLUM: Blue collar or white collar, if you find yourself out of work and short of cash, it's easy to think of dipping into the money you'd intended to use in retirement. But financial planner Larry Carroll says that should only be a last resort.
LARRY CARROLL, FINANCIAL PLANNER, CARROLL FINANCIAL: One of the things that I have seen is people that have cash reserves tend to be, for lack of a better term, lackadaisical about the job hunt.
COLLUM: And drawing down retirement funds can be especially dangerous for laid-off persons in their 50's. Although they may never work again in their original fields, Emily Brandon of "U.S. News & World Report" says it may not be too late for them to think about changing careers.
EMILY BRANDON, BUSINESS REPORTER, U.S. NEWS & WORLD REPORT: Don't be afraid to retrain for a new career because you could have 10 years or more in the work force after that so it might be worth it to go back to school or to find a career that's in demand now.
COLLUM: Retiring earlier than you planned generally means stretching a smaller amount of retirement savings over a longer period of time. Experts say buying an annuity may be one way to accomplish that. But even then, you may have to cut back on your spending to make ends meet. Joe Collum, NIGHTLY BUSINESS REPORT, Charlotte, North Carolina.
GHARIB: On Friday, we wrap up our year-long series "Get Your Finances Ready for Retirement." Our special edition focuses on investing during retirement and whether retirees now need to take a new approach.
