Reflecting on Layoffs and Retirement

When I lost my job in November, I was already more than halfway into my company’s Employee Stock Ownership Plan (ESOP). I had this notion that just a couple more years of work could allow me to leave the traditional job scene behind and dive full-time into my passion project.

For a long time, I believed I had to reach a certain financial benchmark to retire comfortably. I’d heard that Fidelity suggests having ten times your salary saved by age 67, which felt like an unattainable goal.

Facing my first layoff at age 58 really made me reconsider what a comfortable retirement means for me personally. It’s not just about a number anymore. That “10x salary” guideline had actually held me back from seeking promotions for too long. I realized I’d been thinking about things all wrong.

Choosing a Safer Path

In a way, I’ve always leaned toward playing it safe. That instinct kept me in a steady job, but after a while, it just stopped feeling right.

I kept telling myself I needed to wait until I felt financially secure before seriously pursuing any creative endeavors. But then, once the job was gone, so was my excuse for delaying the start of what I truly wanted to do.

I began by focusing on my current situation. I reminded myself that I’m naturally entrepreneurial, with an LLC set up and several side projects already on the go.

Retirement in the traditional sense was never really my goal. Writing has always been part of my vision for the future, and I’ve become increasingly committed to developing a space where rescued Quarter Horses, exhausted healthcare workers, and first responders can come together for healing through community and writing.

The layoff also brought a hard truth to light: time isn’t something I can negotiate.

Understanding Cash Flow

What I realized after being laid off is that planning for a successful retirement should be less about reaching a magical number and more about grasping how cash flow works.

People retiring daily feels like some sort of urban legend. Financial planner Joe Schmitz Jr. highlights that needs differ dramatically based on lifestyle, location, housing considerations, and health. For instance, homeowners who’ve lived in their properties for years will have different expenses from lifelong renters. Understanding what your life truly costs and grasping your financial position will help you determine your own numbers.

With this knowledge, I shifted my perspective. Instead of stressing about future savings, I began to focus on what I require each month to live comfortably. While traditional income matters, it’s crucial to also consider other sources, like Social Security, existing retirement accounts, rental income, and side jobs.

I also had to take a hard look at my spending habits and devise a plan to handle immediate needs without regular paychecks.

Beyond savings, there are withdrawals options for those wanting to access their retirement funds before reaching 59½. One method involves periodically taking what’s known as SoSEPP from your retirement account, which allows for regular early withdrawals, with some restrictions. If you’re 55 or older, you might also be able to withdraw from your 401(k) without penalty if it’s from the employer that let you go or from your new job. Consulting with a financial advisor is crucial to find what works best for you.

Ultimately, the idea that simply saving early and consistently is all you need for a comfortable retirement is only part of the equation. Fidelity’s guidelines assume individuals begin saving at age 25 and consistently contribute 15% of their income. This can be daunting for those who didn’t start saving early in their careers. Compound interest is powerful, and time works in your favor, so even small savings today—like skipping a coffee or a night out—can really add up.

It’s never too early or too late to start getting serious about planning for retirement.