Laid off at 50: How some bridge the retirement gap

They're too young to retire and have trouble getting rehired. Still, many facing a midlife career crisis find ways to get by.

Minna Vallentine never expected to change careers in her 50s. But when her software firm downsized in 2003, Ms. Vallentine lost her executive position. Despite decades of marketing experience, she couldn't find an appealing position in her field. Finally, encouraged by a vocational coach, she decided to follow her dream and open a business to teach English to immigrants. "I've gone from a six- figure job to barely paying the mortgage every month," says Vallentine, of Mountain View, Calif.

This kind of dramatic midlife shift is becoming more common - and necessary. As employers reduce the ranks of mature workers, euphemisms such as golden handshake, early retirement, buyout, and "early out" mask a sobering reality: Most laid-off workers over 50 cannot afford to retire and yet search unsuccessfully for jobs.

"What you find pretty universally is, for the person over 50 who loses a job, whether it's an executive or a factory-floor worker, their new job is not as good as [the one] they used to have," says Carrie Leana, a professor of management at the University of Pittsburgh who studies job loss.

Some turn to self-employment; others take low-wage jobs to pay the bills until they can collect Social Security and pensions.

Claudine Jones of Dallas, a former customer-service manager, faced her first layoff three months before turning 50, when her employer went bankrupt in 2001. She had to hire a lawyer to get more than the two weeks of severance pay the company offered. She also sold her house in an upscale neighborhood and moved to a more modest address. A subsequent technology job paid much less and lasted only a year.

After five months of unemployment, Ms. Jones accepted a job two weeks ago with a franchise tax service at $8 an hour. She is testing the waters as she considers opening her own tax office next year.

For some laid-off employees, pride is a stumbling block. "Older workers often say, 'I've had a great title, my work is good, and therefore I shouldn't have to take something lesser,' " says Fred Nothnagel, director of WIND, a networking group for out-of-work professionals in Massachusetts.

One former IT manager in the group, Jim Morris, took a job at Staples two years ago after searching unsuccessfully in his field. He has been promoted to copy-center supervisor.

"You've got to do what you need to do," says Mr. Morris of Woburn, Mass. "They give me benefits, and it's a nice work environment with nice people. I just need more money. I don't need a six-figure job, but I need enough to stop the savings bleed." His net pay barely covers his mortgage and condo fee, he says.

Those most successful at transitioning to something new are often the ones who "turn their focus from their past and let go of what they have done and the companies they have worked for," Mr. Nothnagel says. "You need to become open to the possibilities of what is out there. If a person turns that corner, some of them get really energized."

That describes Vallentine. "It dawned on me, when people would say, 'If money were no object, what would you do if you could do anything?' I would reply, 'Teach people to read,' " she recalls.

To pay her bills while she starts her business, The Reading Doctor, she teaches English to Asians and Hispanics through school systems. She trims expenses by wearing simpler clothes, eating out less often, forgoing shopping, and enjoying free activities.

"I wouldn't be honest if I said the money doesn't bother me," Vallentine says, but she adds that she finds her new work deeply satisfying.

As life spans and working lives lengthen, Craig Nathanson, a vocational coach in Danville, Calif., encourages those in midlife to find ways to combine their interests with their work. "People who can visualize what their perfect vocational day would be like are those who can move toward it," he says.

For job-seekers who must postpone such idealism because they need a paycheck, fast, workplace experts offer other ideas.

Linda Leake, who led a weekly outreach ministry for unemployed professionals at St. Andrews Presbyterian Church in Raleigh, N.C., encourages job seekers to volunteer as a way of remaining part of the community. She also suggests using part-time work as a financial bridge.

"Women often find it easier to take a lesser-level position to make ends meet than men do," she says. "Women will go and clerk in a retail store just to have some money coming in."

That's what a California woman in her 50s did after her career as a sales representative ended. Interviews and outplacement services yielded nothing. When an acquaintance offered her a retail job, she discovered that it was "a very good match," adding, "I could act as if this was my business." She also serves as a consultant to writers. Even so, her combined income is less than a third of her former salary.

"As much as I hate the idea of piecing together a lifestyle from multiple sources of income, I'm doing just that, and it's not so bad," says the woman, a mother of two adolescents, who asked not to be identified. "It's a subsistence lifestyle, but it'll be OK." The family's economizing has included eating Crock-Pot dinners, shopping at 99-cent stores, and taking her children to matinee movies.

They "don't have a lot of things their friends have, but they get by," she says. "I'm a happy person and they're happier. That's the best thing I could give my kids." She adds, "You have to get away from your feelings of anger and resentment after a layoff. If you want revenge, you're wasting your time."

Another woman in her 50s on the West Coast was laid off after a long career as a publicist. After initial fears that she would never work again, she started her own public-relations firm. "I didn't expect to do it," she recalls. "I didn't want to be a freelancer, but it just happened."

Although satisfied with her income, she must deal with what she calls classic work-at-home problems: "You're constantly checking your e-mail, and you're working late hours and weekends. You can never leave the work and go home. You have to set boundaries."

She also laments other losses: "No one is matching your 401(k), and you no longer have benefits, which are really, really expensive." She pays nearly $1,000 every two months for a $2,500 deductible health-insurance policy for herself and her two children.

But "in some ways, I'm more secure than I ever was," she adds. "When you run your own business, no one can ever lay you off again, because you are the boss."

Older workers who do not aspire to be their own boss will need other options. In Boston, Operation ABLE - Ability Based on Long Experience - has received a grant to train older workers in customer service at call centers and as bank tellers. Starting salaries range only from the high $20,000s to low $30,000s, but benefits are "excellent," says Joan Cirillo, the group's executive director.

"Older workers are going to be a natural for customer service," she adds. "They know how to speak courteously. They're also receptive to part-time work."

Yet low salaries and part-time jobs will not meet the needs of many laid-off employees in middle age. What is necessary, Professor Leana says, is a fundamental change in corporate attitudes, getting managers to recognize the value of older workers on their staff.

"To me the issue is not so much not hiring older people, but letting them go in the first place," she says. "You have all this human capital, particularly people who have been with you a long time. It should be a very, very serious decision to let them go."

For those already sending out résumés, workplace advisers offer encouragement. "People need to break out of the mental box that the only good job is a W-2 job - regular employment, as opposed to a contract," Nothnagel says. "A W-2 job is not the be-all or end-all."

Adds Ms. Leake, "You must be using all channels to find that next opportunity. You never know where the next position is coming from. Don't ever give up."

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