FIRE as a safety net
I was reading a ProPublica study recently about age discrimination in the workplace and learned that more than half of those over 50 were laid off or otherwise pushed out of their jobs un-voluntarily. That alone is pretty grim, but what’s worse is this part:
“Only one in 10 of these workers ever again earns as much as they did before their employment setbacks. Even years afterward, the household incomes of over half of those who experience such work disruptions remain substantially below those of workers who don’t. For the majority of older Americans, working after 50 is considerably riskier and more turbulent than we previously thought.”
This kind of hits home for me, after being laid off myself in my mid-50s. I did some temporary contract work, but it took me over a year to find another proper permanent job in my field. This is longer than it has ever taken me to find a job. It pays 15% less than I was earning previously, yet I’m wicked thankful to have it, especially now with all the coronavirus-related layoffs. My employer is currently stable, but all bets are off with the current economic disruption. I am easily the oldest person in my group, and as the last in the door I could be the first one out. If that happens, and if it takes a year or more to find another job…it’s occurred to me that at a certain point, I might need to go from layoff to unintentional early retirement. We could deal with that in a number of ways, but it would undoubtedly require getting more frugal over the long term.
This subject came up at work recently, and almost everyone had seen layoffs or “early retirement” alternatives in previous jobs. I survived a hellacious round of layoffs in 2014 that began with a pretty lucrative buyout offered to about 500 employees over age 55 with 10+ years of service. Some of my coworkers were happy to accept it, envisioning an extended sabbatical or a year of double income after getting a new job. A few of them came back later as contractors, having been unable to land another fulltime gig despite years of experience. More from the aforementioned article, which is worth reading in its entirety:
“There was a time when older workers thought they could use early retirements as a stepping stone, locking in years of payments for leaving and then adding income from new jobs on top of that. But many have discovered they can’t land comparable new jobs, or, in many cases, any jobs at all.”
As disturbing as that thought is, if we weren’t practicing FIRE strategies, it would worry me a lot more. Obviously I would prefer to choose when to retire rather than have it imposed, and would like to have at least a few more years of really strong savings before doing so. The entire point of FIRE is giving yourself choices, but I like that it also gives me options if my choices are limited by circumstances beyond my control.