Late-Career Job Losses Are Affecting Retirement in America

Losing a job is never easy—but it can be particularly overwhelming in your 50s or 60s. At that stage, many individuals are juggling significant financial commitments such as mortgage payments, supporting children in college, or assisting aging relatives. And landing a new role with comparable pay and benefits can be tough. As layoffs continue to affect both public and private sectors, this challenge is becoming increasingly widespread—and more troubling.

Why It’s Especially Difficult

When people in their mid-50s to early 60s are let go, the path to reemployment is often slower. Data from the U.S. Bureau of Labor Statistics shows that job hunters aged 55 to 64 typically spend around 26 weeks seeking new employment—almost two months longer than their counterparts in their late 20s and early 30s.

Older workers who are laid off also tend to struggle more when pivoting to different industries, particularly compared to those who choose to leave their positions. As a result, some may need to tap into their retirement funds early or begin collecting Social Security sooner than planned—decisions that can reduce their future income. They\’re also missing out on critical contributions to retirement plans like IRAs and 401(k)s, including valuable \”catch-up\” contributions available to those over 50.

Why Finding a Job Takes Longer

Age-related bias in hiring still lingers. Some employers wrongly assume that older applicants lack tech skills or won’t stick around for long. Yet in truth, many seasoned professionals are both eager and financially motivated to remain employed into their 60s and beyond.

Still, landing a new job often takes time. Pay expectations can pose an additional hurdle—experienced professionals frequently anticipate higher compensation, which some employers may be reluctant to provide.

There’s also a structural issue: senior-level positions—like director, manager, or executive roles—are simply less common than mid-level or entry-level openings. To increase their odds, older candidates should stay active in industry communities, strengthen their LinkedIn presence, and lean on their professional networks.

Average Retirement Age

Losing a job later in life can feel like falling behind—especially when more Americans are working longer. Since 1991, the typical retirement age has risen by about three years. With people living longer, staying healthier, and doing less physically demanding work, many are choosing—or needing—to stay employed.

Meanwhile, traditional pensions have largely been replaced by 401(k)-style retirement accounts, placing more responsibility on individuals to fund their own retirements. That’s left many feeling less confident about their long-term security. Americans are also claiming Social Security later, with the average age increasing from 63 to 65 over the last 20 years. Waiting has its perks: the Social Security Administration says benefits grow by up to 8% for each year you delay claiming, from age 62 through 70.

Retirement Expectations Vs Reality

To strengthen their financial footing, many older adults opt to work longer—whether that means staying in their current position or taking on part-time or freelance roles. These more flexible jobs offer income without the demands of full-time employment.

However, such opportunities often favor individuals with specific expertise or skill sets. For some, the effort of finding short-term work may not seem worthwhile—especially if retirement is just a few years away.

That’s why planning ahead matters. If there’s a possibility of job loss later in your career, it’s wise to maximize your savings now. Need help navigating retirement planning? We’re here to support you. Exploring guaranteed income options (backed by the claims-paying ability of the carrier) could be a smart move. Get in touch to learn more.

Source: The Wall Street Journal (1), The Wall Street Journal (2)