In the back
Looking around me,
few of my friends and
acquaintances look like they
are going to stay the course
and stick with their current
career until they are 67
John Blowers considers the impact
on your retirement plan if you lose
your job in your 50s
Derailed!
T
his month, we’re going to
explore the issues many
working people face later
in their lives when their
carefully wrought retirement plans
are thrown out of the window when
their career ends prematurely – and
involuntarily.
Most of us who are still working
plan to carry on until we can stop –
typically at the age of 67.
But many employees are unlikely
to last that long in businesses that
need to encourage their bright young
things to move up the career ladder.
To do this, many companies
need to move their older and more
“comfortable” staff out of the
business, which can blow your
retirement plan out of the
water.
The bitter pill of being let
go early is often sweetened
by a chunk of redundancy
cash, but this is not always the case
and it is unlikely to be enough for
you to carry on making pension
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[ PLATFORMS & PENSIONS ]
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payments until retirement, while
covering living costs.
If you’re lucky, you may find gainful
employment at a salary similar to
what you earned in your previous
post, but it is often tricky to find
opportunities like that when you hit
your mid to late 50s.
And there’s a worrying pattern.
Many companies seem to be in the
habit of shedding workers in their
late 50s or early 60s on the basis
that a redundancy package will tide
them over until they retire. But as the
government pushes the retirement
age for the state pension further into
the distance (if you’re in your 40s now,
you’ll have to wait until age 68 to retire),
there is little sign of employers
doing the same.
If your plan depends on making
contributions until your chosen
retirement date and assumes you
will continue drawing a salary for
that period, what happens if you just
don’t make it that far?
I thought I would run through a
hypothetical scenario to look at the
implications of a retirement savings
plan that is derailed in your late 50s
Often, older professionals can
or early 60s.
step off the career treadmill into
I also wanted to pose the question:
the sometimes-lucrative world of
should you build in a contingency for
consultancy and non-executive
your actual retirement rather than
directorships, but this depends on
your planned retirement?
your experience and this type of work Finally, I will look at what you
can be fickle at best.
should do if you have left it late to
Looking around me, few of my
really start throwing money into your
friends and acquaintances look like
pension and you find yourself short
they are going to stay the course
of your target if your career hits the
and stick with their current career
buffers early.
until they are 67. This, then, poses a
significant question.
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