Exiled at 50? While searching the net recently on an unrelated subject I came across a forum for job searchers over 50 that really bothered me.
Some of the posts were of course older folks looking for jobs and looking for help, but some were just jerks who apparently thought that everyone should have been born with a silver spoon up their ass and magically have the world at their feet when they turned fifty. Not only an unrealistic view of life, but also pretty unkind to people who have worked their butts off all their lives only to have the rug pulled out from under them for one reason or another.
Here are some facts that may bother some of you, or if not then at least give you a little food for thought:
- In the generation following WWII the average worker could expect to work his/her entire career (20 years or more) for the same company. Thus earning their pension and or gold watch when they reached retirement age.
- Workers in the generation following WWII (so called baby-boomers) have been increasingly subject to fewer and fewer years of "projected" service with the same company.
- The current projected turnover for any given job position in general is about five years. This means that anyone who starts a job today better start thinking about their next position and or company within five years because chances are they will lose their current position.
Under the above circumstances how will anyone who is hired in today’s market or within the past few years "earn" any kind of pension or retirement?
To anyone keeping track of the job market in the past 20 years or so all this information is old news. The solution for protecting ourselves and reaching retirement age with a "nest egg" is to not depend on a company pension but rather savings, money markets, stocks, retirement plans, etc. Save money when you can, and keep job-hopping every five years or so in front of any layoffs until you reach retirement age. Don"t fool yourself; this also includes doctors, lawyers, nurses, etc. Unless they’re independent they are also subject to downsizing. Legal firms and hospitals both go under daily.
Sounds like a good plan but for a few bugs.
There is a little thing called job stability that employers look for in a prospective employee.
There are a finite number of positions available in any given profession.
What about "reputable" companies who are on top of the world one day and lay off half their employees the next without warning? How long will it take thousands of employees suddenly dumped on the job market to again find work competing not only against each other but also against those already looking for work?
Let’s look for a minute at a hypothetical example of a guy I’ll call Joe Senior since Joe is over fifty:
Joe has a modest home in the burbs for which he pays a mortgage of $1,000 per month.
Joe has a wife and 2.2 kids (we’ll round it up to three for Joe). Since kids like to eat, we’ll give Joe $700 a month for food for his family and another $150 so he can put clothes on them.
Joe’s current company pays Joes medical, but not the family, so we’ll say another $300 for insurance so his kids can get their teeth cleaned.
Joes oldest is just about to enter college so lets give Joe another $300 a month to cover the kids school and hope that Joe can get grants for the rest.
To help Joe pay his utilities, phone, etc, we’ll add in another $300 per month.
Joe and his wife both drive used cars they somehow managed to pay for, but they still need car insurance so we’ll give them a low $150 a month for that.
Joe’s wife would like to work and has taken the time to attend some college courses, but after years of raising a family and getting ready to turn fifty, herself (no experience), her prospects for finding work are probably not very good.
So, with no frills Joe’s take home pay needs to be about $2900 a month or a gross of about $34,800 per year just to make ends meet. No savings, no stocks and bonds, nothing held back for emergencies. Joe is just trying to "live within his means". For Joe to do this, since Uncle Sam is going to take his approximately 25%, Joe will need to be paid about $43,500.
Not bad you say? Consider that the average mean salary in the United States is about $50,000 per year. Joe is therefore making a modest salary and living modestly. Go back to school you say so he can make more money? Joe is fifty. Where will Joe get the money or the time to dedicate to a degree? How many "degreed" professionals are there in the job market currently?
Ok, so Joe is doing his best to make ends meet and feed his family.
When Joe arrives at work he receives a notice along with others in his department that there will be a meeting just before quitting time. Yep, you guessed it. Joe and his department have just been downsized due to "corporate restructuring".
No big deal right? Joe is a hard worker, he has skills and experience, and of course the company has generously paid him a severance package of a months pay. On top of that, Joe will collect unemployment amounting to about $1500 a month until he can find another position& as long as it doesn’t take him more than a year to find that is. The average time for a person over fifty to find another position is about 18 months.
Remember that Joe’s bills are about $2900 per month? Let’s see, do we not feed the kids, not send the oldest to school, sell the house? What choices would YOU make?
Joe gradually built up his lifestyle to what it is today. He didn’t buy a house 30 years ago because he obviously couldn’t afford it then. As his family and his salary increased, he was able to move into a better house a few years ago. Not much equity there in other words.
Jump forwards six months now.
Joe has been on several interviews but the feedback has been that he’s "overqualified". Joe wants and needs to work but the only positions that may have been available paid even less than unemployment, and unemployment itself won’t even pay his bills.
Joe has had to sell one of his cars to help with expenses and cut down on insurance. His house is on the market for much less than it’s worth, but he held onto it hoping he would find work in time. The bank is threatening foreclosure because he’s late on payments. He has no idea where moving expenses will come from, or where they will be able to afford to move to.
Eventually Joe will end up filing bankruptcy and moving in with family because there are just no positions available which will pay enough to end the downwards spiral of Joe’s finances.
Like most employees out there, Joe has been a good spouse, a good parent, a good provider, and a good employee all his life. To those of you out there who are tsk tsking because Joe "failed to plan" better, remember that Joe spent his time supporting his family the best he could. He was building equity in a house as an investment to help provide for the future, but that future was jerked out from under him before its time. Any savings or investment went right out the window and was eaten up by bills he simply could not pay because he couldn’t find a job to help him support his family. Now Joe has lost everything and probably will never recover but will work until the day he dies just to survive.
A pretty grim story? Maybe. Unrealistic or exaggerated? Not at all. It happens every day to the family down the street in nearly every major city in the United States.
To all the sanctimonious jerks out there heading for the golf course right now because you were lucky enough to have avoided the above scenario but still want to kick others who weren’t quite so lucky, you might want to remember that your own children and grandchildren may not be so lucky. The same situation was and could have been yours had you had the bad luck to have invested your retirement savings in Enron, or planned on getting a pension from one of the huge corporations who have laid off thousands of people in recent years.
Publication: MBC (www and/or print)
Publication Date: 09/20/2004
