Archives for retirement

Good News or Bad: Longer life > Longer career?

group of happy business people clapping by Tec Estromberg of Flickr

 

Trend alert: Employment for workers 55-74 is rising faster than any other age group.

Are you alarmed or encouraged by this news?

You might be alarmed if you were thinking that retirement was on the horizon. On the other hand, you could be encouraged if you already realized that retirement is years away and were concerned that you could face age discrimination.

I say, either way, if you are in either camp and no matter what age you are, it is time to decide. You are going to live a longer life. Are you going to live it led by passion or are you going to continue on with a career that pays your bills, but leaves you wanting more?

There are many great examples of people who have reinvented themselves late in life to achieve greatness.

Here are just a few:

Colonel Sanders, 65, was motivated to hone his recipe and franchise his restaurant by a new highway that had drawn customers away from his single store.

Laura Ingles Wilder, 65, put pen to paper and published Little House on the Prairie.

Grandma Moses, 76, created her first canvas painting when her arthritis prevented her from enjoying embroidery.

 

Consider this:

  • A majority of people dedicate their youth to careers that offer financial security.
  • 70% of these workers are disengaged in their work.
  • Having had dedicated decades to building a life and supposedly saving for retirement, they are finding that the lifestyle they imagined when they signed up for “corporate servitude” is not actually attainable with what they were able to save, if anything.

Or we could imagine a different scenario.

After retiring from the career that they dedicated decades and their youth to, they find they are still able-bodied and able-minded and want to spend the rest of those years, with kids grown and hopefully living life well for themselves, delving into their passions and finding new ways to make money pursuing those passions.

Some of them are finding more passion driven careers than they did as a corporate servant. That makes them wonder, “Why did I spend so many years consumed by consumerism?”

I’m not suggesting that having a corporate career is a waste of your life. I have many clients who feel completely fulfilled, are at the top of their game, enjoy going to work and get to enjoy their lives outside of work as well.

What I am saying is, if you are biding your time in a corporate career that you do not feel fully engaged in, why aren’t you reaching for something better? Better is possible.

In fact, my experience teaches me that so many do not reach for something better because there is so much doubt that something better is possible, or if something better is possible for THEM.

Before you can go from impossible to actual, you have to realize that what you suspect is impossible is possible. So, I am providing evidence to you that it is possible. If it was possible for some, than why would it not be possible for you?

Are you thinking it could be possible yet?

Okay. The next step is to make what is possible probable.  That is where we come in. This takes more than just influential content and a pragmatic plan of action. You may be in the “possible zone” now, but you have been in the “impossible” zone for quite some time, if not all your life.

You need tools, tricks and techniques, aka HACKS, to shift yourself to where you are in the possible/probable zone MORE of the time, and then MOST of the time. This is why our coaching, group coaching, and one-on-one programs are so much more than how-to-job-search programs. If you have been reading up on the best ways to find a job, attending seminars, watching videos, etc., and still have not been able to see a big difference in what you do and/or what results you get, or you have not been able to sustain those results, we know exactly how to help you!

You may inquire as to one-on-one coaching programs at any time, but why wait? Fill out a Needs Assessment form and have a free 30-minute consultation with us.

Or, RIGHT NOW you can still get into our six-week Epic Career Fast Track group coaching program. We’re getting started soon, though, so don’t wait!

 

3 Ways Being Unemployed, Underemployed and Underpaid Derail Your Retirement Plans

Happy_Retirement by Thomas8047 on Flickr

Happy_Retirement by Thomas8047 on Flickr

No one wants to find oneself unemployed and without a steady salary. The lack of gainful employment is a frightening scenario. How long will unemployment last? How much money is there in savings? What about the bills? What will be paid and what will fall to the wayside? What luxuries have to be cut from the budget? All of these concerns can come rushing at you like a tidal wave threatening to drown you. The consequences of being unemployed, whether it is for the short-term or the long-term can impact your financial future. The same is true of underemployment and under-compensation.

I’ve heard this story too many times, and I’m sure you’ve heard it, too. A woman was denied unemployment benefits and it took her nearly a year to land a job. When she did land, she settled for part-time work while she continued to search for a full-time position. To get by, she dipped into her savings accounts and borrowed money from her 401(k). At first she tried to keep up with her debt, but as the months passed, it became harder to make ends meet. Her house went into foreclosure because she stopped paying her mortgage, she let her credit card bills go, and eventually she had to ask her adult children for financial help. Her situation gradually improved as she found full-time work and made arrangements to save her home and repay her debt. That said, her financial future has gone awry, and it will take a lot of work to recover what was lost. Is there a way she could have avoided her unfortunate situation?

Yes, there are consequences to being unemployed, but there is also a solution. First, let’s dive into how unemployment can affect your finances and your future. Then I’ll discuss the solution and why an investment in your job search can save you tens of thousands of dollars.

 

  1. The short and long-term financial impacts of being unemployed without a salary:

 

When you’re unemployed, you may receive unemployment benefits. These benefits help stave off the immediate concerns of your day-to-day expenses. You temporarily have enough cash to keep the lights on and put food on the table. While you’re out of a job, you can focus on making ends meet. This means you’re no longer contributing to your savings and retirement accounts. Worse, if you’ve run out of unemployment benefits (or you were denied them), you may have to draw upon your personal savings and retirement accounts. If you spend savings before landing a new job, it may be tempting to live on credit. As time passes, the consequences become more severe.

The long-term effects of unemployment can be devastating to your psyche and self-confidence. The toll on mental health are particularly notable. A sustained loss of income can create stress, anxiety, and depression as a person moves from a higher socioeconomic status to a lower status. Depression can also make you physically sicker by increasing the chance of a heart attack or stroke. Furthermore, job seekers suffering from an increased toll on mental health who had been unemployed for more than 12 weeks had a 70% reduction in their chances of finding a job, versus job seekers who weren’t suffering mentally. Long-term unemployment can also mean that you slowly drift away from your former co-workers and others in your personal and professional networks. A weak network makes it harder to find employment.

On the financial front, long-term unemployment can decimate your retirement funds and send you into a debt spiral. It isn’t uncommon for unemployed older job seekers to borrow against their 401(k) plans to make ends meet. Borrowing against a savings plan, or drawing from your personal savings means you’re pitting your present against your future. In other words, you feed your family today, but your ability to retire comfortably, or at all, is greatly diminished. The longer you’re unemployed and in debt, the harder it is to escape. As some bills are left by the wayside and go into collection, credit scores can drop, unpaid debt goes into collections, and lawsuits are filed. When someone in debt finally obtains gainful employment, they may find their wages garnished by creditors. Some may also discover it is harder to find a job because some background checks include credit checks.

 

No matter what unemployment situation you find yourself in, the anxiety can be overwhelming and lead to decisions based on fear. That leads to my next point…

 

  1. Opting for underemployment:

 

When we are staring into the abyss, there is a powerful temptation to latch on to the closest lifeline. A temporary job, a part-time job, and even accepting a pay cut may provide you with immediate income, but these employment decisions can be harmful in the long run. I wrote about it in my article “How Fear Limits Careers.” Not only are you accepting fewer dollars and benefits than what you previously earned, but it becomes harder to catch up on your salary, savings and retirement. Being underpaid means the majority of your income is going toward paying your current bills and keeping your head above water. There may not be enough money left over in your budget to consider fully investing in your future at the levels you need in order to retire when you want to retire with the quality of life that you’d expect, want and deserve. If you’re a few years away from retirement, it may even be tempting to retire early at the cost of receiving lowered social security benefits. It may seem counterintuitive to wait on a higher paying job if you can immediately land a job that will bring in income, but you are better off waiting for higher pay. Don’t settle for less than what you previously earned.

Once you do secure a job that provides you with your net worth, you can focus on paying your bills, getting out of any debt you may have accumulated and planning for retirement. And, there are ways that you can catch up for the times that you were not able to save, but it isn’t easy.

 

  1. Your financial plans for retirement:

 

If you’ve experienced a bout of short-term or long-term unemployment, the year you plan to retire has to be readjusted based what you can contribute. Most people haven’t planned far enough ahead to consider at what age they’ll retire and how much money they will need. In fact, ignorance seems like bliss—until you find yourself a few short years away from retirement. You realize you want to spend more time with your grandchildren, or you may want to travel. Not being prepared for retirement means you’ll have to spend longer working or get by with less income. Before the day of retirement comes it is worth your time and effort to consult a financial planner. Ask yourself a few questions:

 

A.  How has being unemployed affected my retirement funds?

If you take money out of your 401(k) before the age of 59, you’ll have to pay taxes and penalties on the amount withdrawn. You’ll also miss out on tax-deferred growth you could have been earning.

 

B. What strategy do I need to utilize to get my retirement funds back on track?

Once you do successfully land a job, you’ll need to recover the retirement funds you lost. That means calculating your expenses ahead of your retirement years, putting away as much money as you can from each paycheck, depositing more money in your retirement accounts and scaling back on expenses. MoneyRates.com has an excellent six-step plan for workers over 40.

 

C. Will I be able to retire at the age I want when that time comes?

If you take the time to calculate how much money you need to retire and the age at which you’d like to retire, you may have to rethink your plans. It may not be feasible to retire at 62 based on your funds. Instead, you may have to wait until 65 or older.

 

A financial planner can help you work out a new retirement year based on what you can contribute. But they can also help you determine how much income you really need in order to catch up or retire on time. This is a critical number to have! I don’t know how or why people ever make career moves without it.

Once you have a retirement plan in place that accounts for your lost income, you can go forward with those plans. You may discover you have to make a few short-term sacrifices such as buying a new car, going on vacation every year or even delaying a few home upgrades. (Just make sure you set some money aside for emergencies.) The temporary pain of having to cut back will be worth it when you can afford the retirement you want.

Now that we’ve raised your blood pressure giving you the scary truth, let’s talk about what is in your power to do about it. Hiring a career coach can help yield results from your job search much faster than searching alone. Think of a career coach as an investment and landing a job that pays you what you’re worth as a return on your investment. There is an accepted theory in the field, and I’ve never been able to locate the source, that calculates that job seekers can expect to be in transition one month for every $10,000 worth of salary. Based on this formula, we have helped our clients cut the length of their searches by 50% on average. With a focused campaign that is built upon a powerful personal brand and fortified with an effective social media strategy and activity campaign, you can regain control of your job search. That means creating bidding wars where employers fight for your talent, choosing your employers, earning what you’re worth, and accelerating your income. Our ROI calculator can help determine if you can afford to use our services.

Even if you ultimately don’t use our services, I still strongly suggest working with a career coach. You may have to put money upfront to give your job search the momentum it needs, but it is an investment that pays off in the long run, as long as you choose the right one! If you know of someone who landed swiftly, ask him or her if they used a career coach they can refer. Otherwise, do your due diligence.

Using the services of job search professionals may also be tax deductible, meaning you could regain some of the money you spent on those services. (Check with your CPA to verify. Certain conditions need to exist.)

There are consequences to being unemployed, underemployed and/or underpaid but don’t let fear and desperation guide your actions. An investment in your job search will pay off in the long run when it is invested wisely. Just imagine triumphantly returning to work earning the same salary as before you were let go, or an even higher salary. Imagine being so desirable that employers bid on your talent and you can work at your company of choice. You may have lost some ground on your retirement and savings, but with an accelerated income, you can recover.

 

We’re here for you if you want to sample our services with a free résumé and campaign evaluation: info@epiccareering.com

 

Executives: Downgrading your career? Consider…

Will your former executive title keep you from landing jobs with less responsibility?

 

Shelf Road Climbing by AMagill on Flickr

Shelf Road Climbing by AMagill on Flickr

In my winter newsletter one of the myths that I asked you to leave in 2013 was that you can accelerate your job transition by pursuing positions with requirements beneath your qualifications. (Subscribe below to receive our newsletter). The truth is…

  

…you can likely prolong your transition and create challenges that need not exist.

 

For some executives, however the pressure, travel, and hours of an executive position are no longer viable for their well-being. Genuinely, they would like to take a step back and just be a cog in the machine and maintain some value to a company, or for monetary reasons they must continue to work. In either case, they are not be ready to hang their hat and be put out to pasture, which does seem like a morbid way of looking at retirement. There are certainly better ways to look at retirement. However, people derive a lot of their self-worth from their job. It can be very difficult to define yourself after the prospect of any future potential career growth is eliminated. You might have good reasons to take the position that is beneath your qualifications, but you will face the same challenges in landing these jobs as the individuals who are pursuing jobs beneath their qualifications because I think it’s the faster way to get hired. Either of these types of candidates are huge potential risks for the employer.

 

Yes, age discrimination does happen, and many people assume that it has to do mostly with health care costs or the risk of short or long-term disability or a company doesn’t want to pay top dollar for experience when they can hire someone young and cheap.  Often, there is a lot more to it than that. Besides the fact that great companies want to give new employees positions that enable them to grow, the morale of a company can be depleted when you have a senior professional reporting to a more junior professional. You may expect that you will be okay with this, but too often senior folks do find themselves at odds with a supervisor they perceive as making rookie mistakes. Let’s face it; your years of experience certainly taught you things that this junior person has yet to learn. How do you NOT voice your opinion and can you possibly accept the wrong decision of your supervisor? This is another stressor in and of itself.

 

From a risk perspective, if an employer has been down that road before and experienced the repercussions of reverse generational reporting firsthand, they will be hard-pressed to be convinced that the reward is worth the risk, though it is possible. To do this, however, your brand and every encounter that you have has to consistently ooze humility. We all know that actions speak louder than words, so what is more humble than volunteering? Volunteering to help out a young company, not strategically, but with the administrative, customer service and execution details that sometimes get overlooked when a company is small and has few resources, is way to prove that you can simply do rather than lead, if in fact you can.

If, however, you have spent the majority of your career honing your leadership skills, it can be difficult to stifle. In fact, it can be so against the grain of your being that it, too, can cause more stress than it alleviates. You may want to consider lending your leadership or business acumen through an SBA, venture capital or startup incubation program instead where you are not accountable for results, but, rather, can enjoy being the impetus for a young company’s success. This, too, has a caveat that many consultants and coaches have to broach – when the client doesn’t follow through. You may be so accustomed to making things happen that it can be difficult to be compassionate to a young leader who has not yet found a way to change old habits, put in the effort, and deliver results. In fact, it can be frustrating.

 

A mistake people often make when they want to downgrade their careers is underestimating the amount of stress associated with a job. People often turn to retail or customer service positions, which really can require a lot of conflict resolution.  Stress is inherent in conflict. Sometimes they land in companies with high attrition, where stress is part of the culture. Another mistake is forgetting how under-appreciated these jobs can be. When you are the top, you are visible and your accomplishments are lauded. At the bottom, you can be practically invisible, and that can be a hard difference to reconcile.

 

At this time I really should introduce you to a new way of looking at stress as helpful. Kelly McGonigal, a Ted speaker and psychologist, has made a confession in a recent TED talk. She admitted that she might have been causing more harm than good by making stress the enemy. As it turns out, the belief that stress is harmful is more harmful than stress itself. She shares a way to look at stress that can save or prolong your life. This actually could mean that you can continue to work in the same capacity of your professional experience and talents, but with a more helpful, healthful perspective. It also suggests that extending compassion and comfort to others will make you healthier. So, perhaps if you were hesitant to end your career because of the self-worth you derived from your work, you can find new ways to be of service to others.

 

If you really need or want retire your brain but not your whole self, data entry, assembly line and inventory jobs still exist. It’s best for your well-being to be around things you love and enjoy. Look for companies aligned with your hobbies and interests in your favorite local trade magazine or niche publication. Check out what meetups exist to mingle among people who share your interests and can point you to companies associated with them. Of course, you can search trusty Google and enter the name of your town + the interest. Those sponsored ads are good for something!  Also, there are some niche recruiting firms that specialize in baby boomer placement. One such local (Philly) organization is The Carney Group. And, now more than ever before, there are legitimate remote, work-at-home positions where you can make your own hours.

 

Nothing you decide you want is wrong. That being said, we sometimes decide we want something without fully evaluating the reality of it. Hopefully with this insight you can make a fully educated decision that leads to greater fulfillment and quality of life, whether you chose to make this decision now or conditions outside of your control necessitated it.