“I began seeing signals that were telling me that if there were going to be more layoffs, I was probably a target,” said Ms Hetzel, 55, who led the company’s innovation efforts.
So she and her husband made some changes. They began tracking every expense, challenging themselves to spend less each month on discretionary items like eating out, and contacting their cellphone and cable providers to find ways to reduce their bills.
“We were educating ourselves on where our money was going and reflecting on our behaviours so that we could be ready to modify them if we were forced to,” said Ms Hetzel, who lives in Myrtle Beach, South Carolina, the US.
In May, Ms Hetzel was laid off, joining a group that now totals nearly 900,000 US private sector employees who have lost their jobs in 2025, more than the number laid off through all of 2024.
The US federal government recently estimated it would end the year with 300,000 fewer workers. Many of these people are late-career employees and not willing or financially able to retire.
Yet, finding a new job after age 50 can take months, especially as the labour market tightens.
Employers added a mere 22,000 jobs in August, according to the US Bureau of Labour Statistics, fewer than what economists expected. The unemployment rate also rose to 4.3 per cent, from 4.1 per cent in June.
When you are laid off later in your career, financial priorities shift sharply – you are no longer focused on building retirement savings but on maintaining enough cash flow to cover expenses, said Mr Christopher Stroup, founder and president of Silicon Beach Financial in Santa Monica, California.
Your first step should be figuring out how to use the money you have as a bridge to pay living expenses while you look for a job, he said.
Here are some ways to secure your finances while you search for a new job.
Manage any severance package carefully
If you are lucky enough to receive a severance package, experts agree it is important to treat it as an asset, not as a windfall.
Severance packages are typically equivalent to one week of salary for each year of employment, so, depending on how long you have worked at the company, you could receive up to half a year’s salary, or more.
For many people, that could be the most money they have ever received at once.
“You may feel rich, but that feeling can lead to problems if there’s a lack of financial discipline,” said Mr Josh Andrews, advice director at USAA, a firm that offers insurance, banking and retirement services to the military community. That money, he said, is not for a vacation or for retail therapy but to cover your expenses while you look for another job.
Mr David Haas, president of Cereus Financial Advisors, in Franklin Lakes, New Jersey, recalled a co-worker who was laid off and used his severance to take a month-long vacation.
When the co-worker returned, he had trouble finding work. Because he had spent his severance, he liquidated most of his retirement accounts to pay his living expenses, resulting in a huge tax bill and penalties for early withdrawals, said Mr Haas.
“Fortunately, he was able to find a job by the time the tax bill was due, but he still had a lot of trouble rebuilding his retirement savings in his 50s,” Mr Haas said.
Mr Andrews said that if your employer gives you the choice to receive your severance in one lump sum or as biweekly payments, consider the latter, to make it easier to budget and less of a temptation to spend.
Avoid taking money from accounts for retirement
Before taking money from your retirement account, use any other funds you have, including your severance, emergency fund and savings, Mr Andrews said.
If you have taxable investments, such as a typical brokerage account with stocks and mutual funds, consider selling those before using your retirement fund, despite the potential loss of investment gains.
Your retirement accounts should be your last resort, particularly if you are younger than 59½, Mr Andrews said.
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Keep an eye on your investment and debt
If you have taxable investments and your income drops substantially because you’re not working, consider liquidating some holdings.
“While you’re in a lower tax bracket, it may be an opportune time to sell some taxable investments and not pay as much tax,” Mr Andrews said.
An asset such as a stock, bond or mutual fund held for longer than a year is subject to a long-term capital gains tax. The rates are zero per cent, 15 per cent or 20 per cent, depending on your income – a higher income results in a higher tax rate.
Call your creditors to tell them about your job loss and ask about reducing or deferring payments while you look for work.
Don’t fret about pausing saving for retirement
Financial experts agree that it is okay to stop putting money into a retirement savings account while you are unemployed, because it is more important to focus on paying your bills and finding a stable job.
Mr Stroup said: “If saving to a retirement account is on the back burner for a year, it’s unlikely to derail your ability to retire in the future.”
If you have any income from any consulting or freelance work, make sure you have the cash flow to pay bills. Mr Stroup recommends putting any income into a savings or checking account.
“When you find that stable job, then let’s get back on that retirement journey,” he said. NYTIMES
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