Posted on 15 January 2013
By Mark Miller
Unemployment can throw a wrench into even the best retirement plan — especially for older workers in their peak earning and retirement saving years.
Now that the employment picture finally is starting to improve, older workers who have been through the wringer of joblessness face the task of getting those plans back on track.
More older workers are back on the job. The percentage of 55-plus Americans out of work for 27 weeks or more fell to 48.7 percent in December, down from 53.5 percent in November. The unemployment rate for workers over 55 stood at 5.9 percent in December, considerably below the 7.8 percent for all workers.
Near-retirees struggling to recover from a bout of joblessness may be better off than they think. Their retirement account balance is likely near its lifetime peak and probably has grown modestly while they were out of work — unless they had to make costly withdrawals for expenses.
There are two other important levers that can be pulled: working longer and shaving projected retirement spending.
“Don’t despair if you’ve been through a job loss in your late fifties or early sixties,” says Christine Fahlund, a senior financial planner and vice president at T. Rowe Price.
Instead, it’s a good time to find a sharp pencil — or even better, a well-built online retirement planning calculator — and do some what-if projections. Recalibrate those big three variables that can help get you back on track: saving rates, retirement dates and your spending needs in retirement. And be as specific as possible.
Learn more in today’s Reuters Money column.