Ask an Advisor: I am a 62-year-old single woman making six figures as an executive but there’s a lot of restructuring in our company. How can I make sure I am financially secure even in the event of potential layoffs?

Ask an Advisor: I am a 62-year-old single woman making six figures as an executive woman but there’s a lot of restructuring in our company. How can I make sure I am financially secure even in the event of potential layoffs?

With significant restructuring occurring across corporate America, many highly compensated executives are experiencing anxiety and uncertainty about their financial futures. Those who anticipated remaining with their companies until retirement within the next 3-5 years might find this situation especially overwhelming. The burden becomes even heavier when you’re the sole earner in the family, with no one to depend on or fall back on, understandably.

To ensure you stay on track despite the ups and downs of your career, there are several steps you can take. While we can’t predict the future of the job market or the economy, we need to focus on what we can control. This proactive approach allows you to remain productive rather than feeling disheartened or hopeless.

Firstly, I recommend assessing your emergency fund status. Evaluate the amount you currently have in cash and cash-equivalent accounts to ensure you have immediate access to funds without dipping into retirement or long-term savings. You should aim to have at least six months’ worth of living expenses set aside. This is a slightly more conservative approach, considering the ongoing corporate restructuring.

With potential layoffs looming, it’s important not to settle for just any job out of desperation for income. Take the time to carefully choose your next career move, considering the next 3-5 years. If necessary, prioritize increasing your emergency fund over maximizing contributions to retirement savings. Aim to just contribute the minimum required to receive your employer’s matching contribution, if necessary. This way, you’re focusing on adequately funding your emergency fund as the top priority.

Secondly, you might be considering early Social Security income distribution since you’ve just turned 62. However, before you start withdrawing Social Security income, consider your overall financial situation, including your current income, savings, and retirement account balance. Waiting until your full retirement age or even until age 70 could result in significantly more money over your lifetime—potentially hundreds of thousands of dollars more.

Even though you may feel nervous about a potential layoff, it’s wise to consider other sources of income you can access before turning to Social Security. If you don’t urgently need Social Security income, take the time to evaluate your needs and the overall financial implications before making any hasty decisions. Keep in mind that as someone currently employed and earning six figures, your Social Security income will be taxable, so it’s important to factor that into your decision-making process.

Thirdly, avoid making hasty moves in the market out of fear of a potential layoff and the need to adopt a more conservative approach. Instead, discuss your concerns with a financial advisor or financial planner who specializes in working with executives. By examining your overall financial situation and portfolio comprehensively, you can make more informed decisions rather than reacting emotionally to temporary circumstances. Working with a professional will benefit you for rational decision-making and optimize your wealth-building strategies.

I hope this information has been helpful in guiding your decisions during this challenging time. Being the sole earner can be particularly difficult, especially when faced with uncertainty. It’s crucial to have someone to talk to and seek advice from, as making informed decisions now can have a significant impact on your financial future. Remember, while this may be a temporary challenge, the consequences of poor decisions can be long-lasting. I wish you the best of luck!

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This article was originally published on Wealthtender and is intended for informational purposes only and should not be considered financial advice. You should consult a financial professional before making any major financial decisions. Wealthtender earns money from financial professionals, which creates a conflict of interest when these professionals are featured in articles over others. Read the Wealthtender editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.

About the Author

Hazel Secco, CFP, CDFA

With over a decade of experience in the financial industry, Hazel Secco is a qualified and experienced financial planner with Align Financial Solutions LLC. She is a Certified Financial Planner professional, a designation that requires a rigorous course of study and ongoing professional education. Additionally, it demonstrates her commitment to the highest standards of integrity, professionalism, and client service. Hazel attended the University at Buffalo and earned a Bachelor of Arts – BA, Psychology and studied International Business at Ritsumeikan Asia Pacific University.