AmiSight 7/16: Policy Meets Reality: How Layoffs Undermine Retirement Security

A bumpy transition often awaits those who get laid off or take buyouts late in their careers. The blurry line between working years and retirement has become a growing concern as the federal government and private companies cut jobs at a high clip earlier this year. 

For older workers who want to stay in the workforce, a layoff can be followed by a longer spell of unemployment. It takes nearly 26 weeks, on average, for people ages 55 to 64 to find a job, compared with 19 weeks for people ages 25 to 34, according to the U.S. Bureau of Labor Statistics.

Older workers who are laid off are also less likely to move into a new field than those who quit, an economist said. The study also found that ageism and higher compensation expectations can be obstacles to re-employment as older career workers who find new jobs take an 11% pay cut, on average. Another consequence is breaking into their savings early or missing out on making 401(k) or IRA contributions.

Contact Us Today!