Did you retire earlier than planned due to downsizing? This may be happening to me -- please share your stories (55, pension)

[bizcuit]

I've been told that I may be on the chopping block for downsizing in the next 6 months or so. At 57, this is pretty much the worst age to have to scramble and find a new job, at least one at my current level. I have been looking internally and have had a couple of interviews, but with no success. Additionally, work is so stressful these days, between the project work, being pulled in multiple directions, politics, never-ending reorgs and downsizing, I am a wreck, frankly.

The good news is that I have maxed out my 401K contribution for the 13 years I've worked at this company. At my previous company I had a terrible 401K with no match that never amounted to very much. I rolled that money into my home purchase four years ago (stupid, I know). I have about 100K in equity (about 50% total value) in the place at this stage. Current company also has a very generous matching, profit sharing and retirement health program (3K added to your account each year you complete with the company). Currently my 401K is close to 1M. 35K in the RHRP program. I will receive a small-ish inheritance (maybe 200-300K) when my father passes (which hopefully won't be soon, but he is 87).

I don't want to retire from the corporate world now, but I may have to. Maybe I can find a local, non-stressful job for extra money, but my chances at finding a higher level job at this age looks low to me at this stage.

Anyway, thanks for reading my tale of woe. What I really am looking for from the C-D Retirement community is your stories. Were you out of a job and forced to retire before you were ready? How did it work out? What did you do? I am at the freaking out and falling apart stage, so I am still trying to find the positive in all of this.

tl;dr: I may be downsized out of my corporate job soon, at age 57. I had not planned to retire so soon, but may have to. Looking for stories from people who retired before they had planned to.

[LookingatFL]

Hi DebNashua,

I'm very sorry for the situation you find yourself in. I used to work for a business broker and we worked with many high level (and even low level) people who found themselves in the same situation you are facing. For those people who were unable to find comparable level corporate employment and salary their choices were usually:

1. They did consulting in their field;
2. They bought a businesses. You can find businesses for sale at bizbuysell.com or its sister site bizquest.com. You can also talk with local business brokers whom you can find through either of these sites or using Google.
3. If they had the ability to sell, they became Realtors and then moved up to being a Real Estate Broker.
4. They took employment at a lower income in order to cover their daily expenses and preserve their retirement nest egg.
5. They began a business from scratch while working for someone else until the business became profitable.

Those are the main things I remember people doing. I don't think you have to panic, which is not to say that you won't feel the stress of all the changes. I believe you will have choices if you are downsized.

Sending best wishes.

[StealthRabbit]

@ age 49 I got downsized (and retired for the 3rd time).
Hourly wage (never over $60k,) and single earner family, but we made it...

Many of my co-workers and friends were chopped age 50 - age 60 (~ 100,000 coworkers)

The really successful ones made a very purposeful and planned transition (and were ready to GO FORWARD the last day of work). Houses were fixed and sold (those that wanted to move), and they were packed!

Ideas:
1) Do something you always wanted to accomplish, starting day one of exit... We left the parking lot of work and did a National Parks tour. 5 minute transition. Work to play.
2) Go back to school (I did a Masters program / weekends)
3) Link up with volunteering (find new friends and purpose)
4) remodel / finish the house / build a cabin / beach house ($500k tax free gains every 24 months on primary residence flip)
5) Pursue another career / start a business / learn investing / consulting... (I take international consulting gigs (paid to travel))
6) Work PT (if desired to stay engaged / need $ or HC (There are about 10 national companies that provide HC for PT workers) Starbucks, Costco, World Market, ...
7) Consider HC options (move away from USA or us a HC cost sharing network (Legal alternative to ACA)
8) Follow you passions (finally)
9) Read and HEED "Die Broke" - set free from employment / dated but worked well for a couple friends who were axed early.
10) Don't worry, be happy (for what you had and were able to enjoy, and what adventure is around the bend)

Not ez, but interesting and I have a LOT of success stories to share from friends.
What are your interests / objectives / dreams?

[NYgal1542]

I went through it starting 1993. Lived in central NY, worked for large corporation. Downsizing started and when I saw the writing on the wall for me, I moved to TX for a job I was hired for with the same large corporation. Got there and was told to take care of my personal business and then start work on Monday. Friday phone call came that job was no longer available. So that was the first time. Came back to central NY a year later in the hopes I could find something in same company...... wishful thinking. Only jobs available during that time were temporary positions that paid $7/hour or less. Realized I needed to do something since that wasn't going to work for long, I went to school to learn a new skill. Was able to work for another 14 years but another downsizing came along. Found a part time job using my new skill. But then a health problem came along and I needed surgery. So it was last part of 2010 that I worked.

My retirement took a beating because when downsizing from large corporation happened, I was about 51. Even though I had 25 years service, because I didn't have the magic number (I needed to be 55), my pension rate and SS rate took a real hit.

A lot of things happened, not all nice.

But I'm alive, 76, and managed to have a decent life with what I have. Need to keep gratitude in our minds every day.

[Ken_N]

I was forced to retire early in Jan 2017 at the age of 57. I was with the company 24 years and had hoped to do 5 years more. I was not properly ready for this, my plans for a successful retirement assumed 4-5 more years of accumulation.

I did not look forward to packaging and selling myself, either for a full time or consulting job.

After looking hard at my finances, and thinking about how I had put in 37 years of endless 9-5 days (plus overtime) with a tough commute in corporate America, I decided to cut expenses and take at least a year off to decompress and see if I could make the finances work for retiring now.

Once I did this and saw that I could make it work with some compromises there was no going back. There is plenty to keep busy with (or not) but now on my schedule and at my desire. Now I see the lay off as a good thing. Five more years working like I was would have made my financial future easier and more certain but it would have worn me down a lot more too. I am grateful my career lasted long enough to get me this far.

The lay off was not the end I expected. It felt like a firing and not a retirement. Instead of a farewell party with colleagues (many friends too after so many years) you get to pack your personal items to be shipped and you head home with the survivors quiet at their desks watching the carnage. It was my first time on the other side.

Things that helped in retiring earlier than I was ready for:

- reducing expenses

- a pension (came out to 38% of my final salary, wanted to get close to 50%)

- maxing out 401k/TSP all of the years for the 6% match, the 1% free, and then 10% after tax more for many years

- taking the package they offered for signing to not sue them - lump sum or 5 years service added to pension, I took the 5 years, I wanted to maximize my minimum guaranteed income

- no state tax on the pension, no state tax on the 401k/TSP withdrawals. I did not realize this until the lay off.

- company health plan for life after reaching age 55 with at least 10 years of service, a big plus

- being able to cash in some other investments and not dip into the 401k/TSP yet, I hope to stretch that out for 5 years before I dip into it, and to let that grow to the level I had hoped to have with my original retirement timeline

[rjm1cc]

You are correct about your age. I look at it as being able to get someone with good skills. You just have to fill out hundreds of applications. If you can try consulting. A few years ago I can across a web site that helped match independent consultants with short term projects. Maybe you can find a similar service on the web. There is a service group of senior executives that offer free help to start up business. Try and find this group and tell then you are looking for a job in a company that may need your help.

Can you start your own business?

[athena53]

Two stories:

1. My Dad was "demoted" at age 55 from his position as a Regional Manager for a large steel company. He and Mom moved to Myrtle Beach, bought a small house for cash, and Dad attempted a second career as a financial advisor. (He'd been investing since his 30s, before on-line trading and discount brokerages.) It didn't work out- Dad really worked hard at cold-calling but he left with a new cynicism for how major brokerages are run and for banks that let people coast along with CDs and then suddenly swoop in with "investment advice" when the customer wants to move the $$ to a brokerage after the CDs mature. Still, they'd saved plenty and now, 32 years later and 2 years after Mom's death, Dad is in Assisted Living and is quite solvent. They never spent extravagantly- don't have my expensive travel habit.

2. I think that was a wake-up call for me. I'd planned to retire at 65 but it the back of my head knew that things don't always work out as planned. I saved as aggressively as I could (still enjoying some great travel along the way, but cleaning my own house, mowing my own lawn, buying respectable used cars and keeping them past 100K miles, etc.). At 61 the politics turned toxic and I quit. I walked out for the last time a week after calling my husband on a Friday and telling him, "I think I'm going to quit my job on Monday". That was mid-2014. I had more $$ than you but DH and I also loved travel and tried to keep our charitable donations at the same level as our travel budget. Our other expenses were pretty modest; we rarely ate out, didn't renovate the countertops every 2 years, didn't spend much on clothes. DH died 2 years ago and life is still good. I take off for Scotland on Tuesday.

Health insurance can be an issue. DH was on Medicare but I had 4.5 years between retirement and Medicare and last year I paid $9,000 for crappy coverage. I was very fortunate that I had minimal out-of-pocket because I stayed healthy.

You may want to check the boards at early-retirement.org. The people there range from those who retired in their 40s to people like me, and from those who are happy to use the public library and go to free concerts to those who are headed to the Galapagos on their next trip. So much depends on your fixed expenses, plus what you spend on "wants".

[pvande55]

Friend of mine was planning to retire in late 2009 or 2010. Got laid off in 2008 from an architectural fim so decided to retire right then. Another got laid off couldn't find anything in Engineering during that dead period from 08-11. Retired on disability but works part time driving limo.

[MichiganGreg]

My wake-call was from a RIF, at age 60, in 2011. The next year was comprised of a horrible, stressful scramble. I was lucky to be contacted by what would turn out to be the best paying company of my career in 2012. For the first time, we finally had enough income to save like crazy from the moment we landed here. Worked to just a couple of months before FRA, and called it a day. Didn't dodge the 'downsizing bullet', but we were fortunate to only be grazed.

[Serious Conversation]

I'm 32, so it hasn't happened to me yet. Here's what happened with some folks I know.

My father was laid off in either 2007 or 2008 from a pharmaceutical manufacturing position at age 50. There was at least a year's notice, and he went through a "fast track" software development program at a local community college that was sponsored by two defense contractors opening offices in the area.

The graduates were supposed to be employed in software development positions, but that didn't materialize for most, even the younger graduates. One of the contractors opened an IT support call center. He got on there and worked there for ten years.

He went from a ~$50,000 position with plenty of overtime, a fifteen minute commute, and no state income tax to a $35,000 position with no overtime, an hour commute (100 miles roundtrip), and having to pay income tax to Virginia while living in Tennessee. Those were lean years.

He got back into a manufacturing role at another pharmaceutical plant last year at 60. He's 61 now, and has lost about forty pounds due to being up on his feet all day working instead of sitting at a desk. His blood work is much better. He's making about $60,000 now with some overtime, and much better benefits. My parents hadn't been on a vacation since around 2010, but took one this year and are taking another week at the beach next month. I get to take care of their five cats

Most of his coworkers at the first plant didn't fare as well. Many were 60 then, and basically dropped out of the labor force. Some raided their retirement savings trying to stay afloat. A few ended up at Lowe's or other low wage jobs.

My aunt was laid off last year at 57 from a management position in the billing office of a major cable provider. She was able to transfer to a partially remote hourly position in another department at a 40% pay cut. She's the primary caregiver for my 83 year old grandmother. They're probably not going to move.