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Getting laid off can be a harsh blow at any age. But at 61, it can be an extremely difficult thing.
Even if you’re well qualified to do what you do, employers may be hesitant to hire someone who’s perceived to be on the cusp of retirement. While age discrimination isn’t legal, it’s a pretty common thing for employers to pass over job candidates due to their older age.
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Unfortunately, it sounds like you were forced to retire before you wanted. You wouldn’t be alone in that boat. A 2024 Transamerica survey of retirees found that 58% ended their careers sooner than they had planned. Among them, 43% cited employment-related issues. The median age of retirement was 62, three years younger than the traditional retirement age of 65.
Retiring at 61 could be particularly challenging because you’re still a year away from being eligible to claim Social Security (at a reduced rate, no less), and you’re also four years away from being able to get health coverage through Medicare.
So, rather than resign yourself to a forced early retirement, you may want to explore your options for being able to continue to work.
Don’t give up on being able to work just yet
Thanks to the booming gig economy, you may be able to go out and find work on your own terms. You could try consulting in your former field, starting a new business, or even embracing different side hustles to cobble together an income for a period of time.
A survey from Self Financial says that 33% of Americans ages 65 and over are looking into setting up side hustles. And people ages 65 and over earn an average of $581.32 per month this way. You, however, may be able to earn more if you’re passionate about what you’re doing and can dedicate more hours to it.
Another way to earn more income is through the lucrative real estate market. Rental income can potentially provide a steady cash flow that adjusts to inflationary pressures, offering a hedge against the declining value of fiat currency.
You can tap into this market by investing in shares of vacation homes or rental properties through Arrived.
Backed by world class investors like Jeff Bezos, Arrived’s easy-to-use platform allows you to invest in shares of vacation and rental properties — which can potentially give you a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, simply browse through their selection of vetted properties, each picked for its potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.
If you’re an accredited investor, Homeshares allows you to gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning, or managing property.
The fund focuses on homes with substantial equity, utilizing Home Equity Agreements (HEAs) to help homeowners access liquidity without incurring debt or additional interest payments.
This approach provides an effective, hands-off way to invest in high-quality residential properties, plus the added benefit of diversification across various regional markets — with a minimum investment of $25,000.
With risk-adjusted target returns ranging from 12% to 18%, Homeshares could unlock lucrative real estate opportunities, offering accredited investors a low-maintenance alternative to traditional property ownership.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Protecting your finances after a late-in-life layoff
Losing a job before retirement could be detrimental to your finances. Even though you’re old enough to tap an IRA or 401(k) plan without a penalty, you may not want to start dipping into your savings at such a young age.
If you’re worried about the potential for layoffs during a period of stock market uncertainty, you might consider securing your IRAs by investing in commodities instead of the market.
Opening a gold IRA with the help of Thor Metals can allow you to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.
To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.
Also, while you may be able to piece together enough of a part-time income to keep your savings untouched until you’re 62 and eligible for Social Security, claiming benefits at that age means reducing them by 30% compared to waiting until your full retirement age of 67. So that may not be ideal, either.
One thing you should do after getting laid off is put in a claim for unemployment benefits right away. You’re typically eligible if you were let go through no fault of your own.
You may also be eligible for severance pay from your employer. And if that severance is based on tenure and you were at your company for a long time, you may be entitled to a decent-sized payout.
That could buy you some time to figure out your next move without having to dip into your savings. Additionally, you should see if you have accrued vacation or sick time you’re eligible to get paid out on.
Another smart thing to do following a layoff is to see what expenses you can reduce — either temporarily or permanently. If you’ve been toying with downsizing, it could be a great time to do so if it saves you money on housing. And if you have a reason to hang onto a larger home, you may want to look at renting out a room for some income.
Also make sure to put health insurance in place following a layoff. COBRA might prove expensive, but you can explore options on the health insurance marketplace.
It’s also a good idea to talk to a financial advisor when you experience a major change in income like the loss of a job — especially if it happens at an age where you may be forced into an early retirement.
A financial advisor can help you assess your options and figure out the most efficient way to cover your expenses in the absence of a paycheck.
They may, for example, suggest switching to assets like bonds in your portfolio so you can generate income and reduce your risk at a time when you might need the flexibility to tap your investments.
If you don’t already have a financial advisor, FinancialAdvisor.net can help you find an advisor to co-create a plan to secure your retirement. Just answer a few questions and their extensive online database will match you with a few vetted advisors based on your answers.
You can view advisor profiles, read past client reviews, and schedule an initial consultation for free with no obligation to hire.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.