Article Review: Personal Finance
Case, I. (2020, May 25). 6 Smart Moves if You Get Laid Off Before You Were Planning to Retire. Retrieved from Money: https://money.com/laid-off-before-retirement/
In this article, Ingrid Case highlights the actions which workers can embrace to help plan for their retirement. Case argues that the COVID-19 pandemic has thrown many older workers’ plans into disarray, as they’ve lost their employment before they’d planned to retire. Besides, people of all age groups have been affected by the pandemic. To support this argument, Case uses data from the AARP Public Policy Institute. According to the AARP Public Policy Institute, at least 20.5 million people lost their jobs between March and April, with unemployment rate surging to 14.7%, the highest since the Great Depression. With unemployment having hit people hard, (Case, 2020) explains the measures that people can take to cope if they get laid off before their retirement.
To address this argument, Case enlists six smart moves if people get laid off before having planned for retirement. These six steps include applying for unemployment, cutting expenses, expanding job search, tapping investments, considering reverse mortgages, and delaying to take social security whenever possible. Case provides an excellent explanation over how people can achieve the benefits of these moves. I agree with Case’s argument that laid-off workers should apply for unemployment. As part of the $2.2 trillion federal CARES Act, people who are out of work are provided with economic relief during the COVID-19 pandemic. People who have lost salaried and full-time employment are entitled to receive unemployment benefits through their state’s unemployment benefit. Besides, self-employed, gig, contract, and freelance workers are also eligible for state unemployment benefits through July 31.
According to (Case, 2020), it is wise for people to cut their expenses to cope during these hard times. I understand that the government has eliminated some budget items – restaurant meals, theatre tickets, and gym membership. However, other budget items require discernment. I agree with Case that items like online streaming services, alcohol, and take-away meals are expendable based on one’s judgment. If people are unable to afford rent, utilities, or mortgage payment, it is advisable to contact the landlord, bank, or utility firm to work with them. Case’s other point is that people must expand their job search. Getting a side gig or part-time job prepares people fully for retirement, even if it comes as an emergency. I agree with Case that most Americans are unprepared to retire at 62, thus expanding job search is very important.
Case explains clearly how people can tap their investments. According to (Case, 2020), there is an automatic gap between an individual’s bills and their resources. In such a case, people should take Money from long-term investments in a taxable brokerage account. Case is right to argue that people should not be afraid of using their qualified assets earlier in retirement to try and get the best tax treatment possible. In addition, Case suggests that people should consider a reverse mortgage. People having substantial equity in their houses have the option to tap that equity in the form or a reverse mortgage. Further, Case argues that delaying to take social security before reaching retirement age allows worker’s monthly check to get fatter. Coronavirus is temporary, but a person’s Social Security decisions are permanent. Thus, it is wise to lock in the highest payment a worker can.
Case’s arguments are excellent and can help workers cushion the adverse effects of getting laid off before having planned for retirement. Nobody is immune to becoming unemployed; people must take the right measures to lower the severity of losing their jobs.