Most of the clients I serve in my financial planning practice are either in the midst of a career transition or planning ahead for one. The transition may be retirement, a second career, or a job transition due to downsizing. As a result, I have spent time over the last couple of years at job networking groups. What has really struck me is that nearly everyone attending these groups are in their fifties and early sixties. Rarely do you encounter anyone in their forties or younger. I have also noticed that the flow of new people attending these groups never ceases. Corporate restructurings are a constant no matter how strong the underlying job market, and those restructurings disproportionally impact people in the later stages of their careers.
One of the questions I ask many of my clients is what is their plan if their job is eliminated or if they simply do not want to work in that role any longer. I believe that planning to work in your current role until your early sixties and then retiring completely can be a risky strategy. So what we do is run alternative scenarios. What if they work in the current role until their late fifties and then do something else with less income but schedule flexibility for ten additional years? There are lots of potential iterations.
When my corporate job was eliminated three years ago I chose to build my own financial planning business instead of trying to land another corporate job. Being a financial planner is something I have tremendous passion for, and I love having a flexible schedule and being my own boss. I can easily see myself doing this for another 15 to 20 years. For these reasons, and the fact that I get to determine when to stop working (or dial it back), I consider it a less risky plan in the long run than had I ventured back into the corporate world.
Even if you really enjoy what you are doing and consider your role to be secure, it still makes sense to think about a Plan B. You never know what the future will bring. What allowed me to make the transition I did was that back in 2009, while still working in my corporate job, I completed training on Saturday mornings necessary as the first step to becoming a Certified Financial Planner. This put me in the position, when the time was right, to pull the trigger and get going quickly on my Plan B.
Determining your Plan B is, of course, the hard part. People who are working full time and raising a family find it difficult to take the time to step back and reflect on alternative career options. Even people who end up in transition find this kind of reflection difficult. In many cases, after losing a job, people immediately dive into the job search without taking the time to assess what would really make sense as a next step. Some people, of course, are in dire financial situations and have no choice. But when I actually sit down with clients and crunch the numbers, many of my clients going through a transition discover that they are in better financial shape then they thought they were. They don’t necessarily need to find a corporate job similar in compensation (and demands) to the one they just left. Most still want to work since they are not yet ready for full retirement, but it is very different looking for a job because you want to work and have the luxury to consider alternatives versus searching for a job because you need to work for financial reasons alone.
If you have been downsized, I think it is important to keep an open mind as to what a future job for you might look like. The instinct of people who have spent the bulk of their career working in the large company is to immediately target other large companies in their industry. But in most instances a large company will be a difficult place to land if you are late in your career. Large companies, often concerned with developing future leaders in addition to filling a specific need, can be particularly biased towards younger employees with longer runways. Smaller companies, in contrast, may not have much of a hierarchy to worry about filling and are more likely to be primarily concerned with finding someone with the skills and experience necessary to fulfill an immediate need.
It is also important to not get locked into a search for a job as a full-time W2 employee. In many cases, a company’s need (particularly that of a small company) may not be long term, and a contractor or consulting position might make the most sense. Flexibility is key.
Taking the time to consider career alternatives is important whether you are currently employed or in transition. I fully realize that for many, thinking through all this is daunting, and it easy to procrastinate on this kind of planning. But as those who have taken to time to put together a plan would attest, it is an exercise that is well worth it.
Let me know if I can be of any help.