Losing a job is always a stressful event, particularly for mid-career professionals with significant financial responsibilities.
In a recent Reddit post, a 47-year-old director-level professional who was let go in a tough job market went online, looking for advice on how to make ends meet until they could find a job.
The post from username Powerful_planning details a financial snapshot that includes about $10,000 in cash, a $21,000 Roth IRA, a $249,000 traditional IRA and a $245,000 401(k).
Don’t Miss:
The professional, who has a partner with additional cash reserves and shared financial responsibility, said they spend about $7,000 per month.
“The job market looks tough out there, so I’m trying to figure out what is going to be my best income gap options,” they wrote.
The professional who has a $1,000 per month car payment and spousal maintenance of $2,200 per month, wondered whether tapping into the Roth IRA is a viable option.
One responder warned that a Roth is not an emergency fund and not to raid the retirement account without exhausting all other options first.
“You need to double down on cutting expenses starting with transportation costs,” Successful_Hold_9048 wrote. “Cut down on eating out and entertainment. Consider getting a side job while you’re looking for a full-time position.
Other Reddit users latched onto the $ 1,000-per-month car payment.
“I’m so tired of people with absolutely zero financial literacy justifying their ridiculous car payments,” Galak-z wrote. “He got fleeced by the automotive industry like every other wannabe CEO sucker with decent credit.”
Trending: Backed by $300M+ in Assets and Microsoft’s Climate Fund, Farmland LP Opens Vital Farmland III to Accredited Investors
Most comments suggested Powerful_planning should sell the car: “Gotta drop the car. $1k a month with only $10k in savings is just a bad idea even with a job,” user RocMerc wrote. But others suggested strategies to navigate their financial situation.
“Time to write down every dollar you spend and see if you can trim ASAP (if they are WANTS, they need to be cut immediately,” No-Loquat_183 wrote. “Also file for unemployment. Does the $1k in car payment also include insurance? That’s incredibly expensive for no reason, esp if your monthly expenses are 3500.”
User Original_Way_7481 also suggested filing for unemployment benefits.
“Then look for freelance work. LinkedIn is a great place to start. Upwork and all are oversaturated so can be tough to get into,” they wrote. “Get LinkedIn premium and put all the keywords relative to your field. Be elaborate in the experience section.”
Powerful_planning’s situation reflects a broader trend of mid-career professionals facing economic uncertainty.
While the employment market is projected to be stable, adding 5.2 million jobs by 2034, finding a new position at the director level can still take time.
See Also: The ECG Hasn’t Changed in 100 Years — This AI Upgrade Could Help Detect Heart Disease Years Earlier
The Consumer Financial Protection Bureau advises a multi-pronged approach to managing job loss, including:
- File for unemployment: People who have been laid off or whose jobs were eliminated usually qualify for unemployment benefits. If you resigned voluntarily or were fired for misconduct, you typically don’t qualify.
- Take care of health insurance: Under federal law, most people can continue their health coverage after a job loss through COBRA. You must pay the full premium yourself, including the portion your employer used to cover, plus a small administrative fee.
- Take care of housing costs: If you’re struggling with housing payments, contact your mortgage servicer or landlord immediately. Homeowners can ask about options like forbearance or loan modifications. Renters should look for assistance programs and discuss payment plans with their landlords.
- Manage your bills: Reach out to creditors and financial companies to ask for options like a payment extension or a waived late fee. Review your budget to see how much you can realistically pay. If you can’t make a credit card or loan payment, contact the company to ask about more affordable repayment plans.
- Keep spending in check: Review all your debts, savings and severance to understand your financial standing. Look at recurring services and subscriptions. You can cut costs by canceling things you don’t need like gym memberships or streaming services.
Losing a job at age 47 is a daunting prospect. While the road ahead will require tough choices, like scrutinizing a large car payment, the professional has a solid network of support and significant retirement savings to fall back on.
As they move through this period of uncertainty, their situation is a reminder to prepare for the unexpected by building an emergency fund, managing debt wisely and knowing which resources to tap into when income suddenly disappears.
Read Next: $100k+ in investable assets? Match with a fiduciary advisor for free to learn how you can maximize your retirement and save on taxes – no cost, no obligation.
Image: Shutterstock