What to do about insurance and savings

What to do about insurance and savings



Editor’s note: This column is the second in a two-part series on losing your job in your 50s.. It was originally published in February 2019 and has been updated to reflect current news.

It’s an event that none of us want to face, especially in our 50s: the day we lose our job.

The goals of that day are to determine the exact time your income will stop, including the money available to you through unemployment benefits, and to decide to cut household expenses immediately. What you do in the first 24 hours will determine the amount of urgency you need to adopt throughout the process of getting a new job.

Day Two of unemployment and beyond is just an exercise in risk management. It’s a simple idea, but it’s also complicated, frustrating, and scary to implement. It is divided into two main parts:


When you lose your job, you almost always lose insurance of all kinds. You may lose your health insurance, life insurance, disability insurance and, less often, long-term care insurance. Those losses are frustrating because you have to scramble to fill in the gaps, and don’t forget you’re 50-something. Re-securing all of this insurance can be brutally expensive due to age and the health-based pricing of insurance products.

From what I’ve observed, dealing with insurance shortfalls is easier to ignore than dealing with income shortfalls, even though they are almost certainly linked. This is because spending money to properly cover your risks (health, death, and disability) is a choice. You can ignore a selection. Finding yourself suddenly unemployed with no income is not a choice.

Health insurance is likely to be your number one priority after losing a job. The program that allows you to continue your coverage is COBRA, or the Consolidated Omnibus Budget Reconciliation Act. This is very helpful, although it often feels expensive. This is because your employer no longer subsidizes your premium. If the costs to take advantage of COBRA are too high, check Healthcare.gov for recent unemployment rates. Losing a job is a qualifying event for securing coverage, but you have 60 days to do so through this provision. By the way, don’t wait 60 days. You should take the time to consider your options, but not being able to insure when your old job expires is a big risk, especially for someone in their 50s.

Depending on your family structure and the needs of your survivors, maintaining your life insurance and disability coverage can be just as important as health insurance. Determine if your former group member has conversion/continuation privileges. If not, talk to your insurance agent – ​​yes, you need an insurance agent – ​​about your options.

Keep an eye on your savings

The second major area of ​​your financial life that needs attention is your assets and how you use them.

The reason I focused on reducing your monthly expenses in my previous column is that when your income stops flowing, you need to take the pressure off your assets.

If you have reduced income, or no income at all, almost every unfunded liability will crescendos in an emergency. You may feel as if comfort can come from your savings, investments, or home equity, but a grim reality exists for people who are 50 and unemployed. You have less time to replenish your assets, because most of your career is behind you. You have to be very selective when it comes to tapping into your savings.

I have long felt that a person’s ability to distinguish an emergency from a non-emergency is the difference between financial strength and financial weakness. This is especially true if you find yourself 50 and unemployed.

Other measures when losing a job: Losing a job in your 50s is very difficult. Here are 3 things to do.


Undoubtedly, my analysis of the financial challenges of being 50 and unemployed does not address some tangential challenges, such as age discrimination when looking for a job, or finding yourself suddenly without work your decades.

However, these two additional scenarios definitely play into one of my biggest fears for anyone who is unemployed late in their career: retirement in disgust.

Capital retirement is when you stop your career, rationally or otherwise, and decide to retire. The fact that it seems like the best option you have doesn’t mean it’s a viable option. However, I have seen people succeed with this move. In my estimation, they are in the minority, but sudden retirement has an outside shot at success. If you think retirement is the best option, don’t make your final decision until you’ve talked to a financial advisor.

Peter Dunn is an author, speaker and radio host. The views and opinions expressed in this column are those of the author and do not necessarily reflect those of USA TODAY.

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