Losing a job in your late 50s or early 60s can feel like the rug has been pulled from under your retirement plans. Income drops, markets feel uncertain and long-planned timelines suddenly look fragile. The goal now is not perfection, but stabilizing your cash flow and protecting decades of hard work.

With a clear checklist and calm decisions, it is possible to stay on track or adjust your retirement path without panic. Benjamin Graham, an investor and author, writes, “The individual investor should act consistently as an investor and not as a speculator.” That mindset matters even more when you are under stress and tempted to make rushed, emotional money decisions.

File For Benefits

The first step after a layoff is usually applying for unemployment benefits through your state. These payments often replace a portion of your previous income and can be available whether you lost your job entirely or had your hours significantly cut.

Rules vary by state, so apply as soon as possible and answer every question accurately. In past downturns, special programs have temporarily expanded eligibility to self-employed and contract workers and extended benefit weeks. If similar measures exist now, they can provide crucial breathing room while you regroup.

Trim Major Costs

Once income changes, your spending plan must change with it. Some costs may already be reduced, like commuting or frequent outings. Others need an intentional review: subscriptions, meal delivery, shopping habits and other “nice-to-have” items.

Next, scrutinize large recurring bills. If a big trip was planned, consider postponing. Review auto insurance if a car is rarely used; in some cases coverage can be adjusted to save money. If housing payments or utilities feel tight, contact your lender, landlord or providers early to ask about temporary hardship arrangements or payment plans.

Broaden Job Search

Many people picture retirement as a clean break from work, so taking a part-time role or side gig can feel like failure. It is not. A “bridge job” is common and can actually strengthen your long-term finances. Consider work you might genuinely enjoy: consulting, project work, seasonal roles, tutoring or part-time positions in fields that interest you. Even modest income reduces the pressure on your savings and may allow you to delay tapping retirement accounts or claiming Social Security too early. It can also keep skills fresh and provide structure during a stressful transition.

Tap Investments Wisely

If benefits and spending cuts still leave a gap, investments may need to fill it—but the order in which you draw from them matters. Taxable brokerage accounts are often the first place to look, especially in a year when your total income is unusually low.

Long-term capital gains may fall into a 0% bracket for people with modest taxable income. That creates an opportunity to realize gains with little or no federal tax. You can also sell losing positions to offset gains and reduce your tax bill further. A tax-aware advisor or tax professional can help you run the numbers.

Pre-tax retirement accounts like traditional 401(k)s and IRAs are another source. Withdrawals are taxed as ordinary income, but if you are in a lower tax bracket because of unemployment, using some of those funds earlier can be more efficient than waiting until required distributions begin at older ages. The usual 10% early-withdrawal penalty generally applies before 59½, but hardship or disaster rules sometimes offer exceptions, so always check current regulations before acting.

Consider Home Equity

For homeowners 62 and older, the property itself can be a financial resource. A reverse mortgage allows you to turn home equity into cash, monthly income or a line of credit while remaining in the house. Instead of you sending payments to the lender, the balance grows over time and is repaid when the home is sold or your estate settles.

Reverse mortgages can offer flexibility, but they are not simple. Closing costs and interest tend to be higher than for standard mortgages, and you must still pay property taxes, insurance and upkeep. In some cases, heirs may need to sell the home to pay off the loan. Anyone considering this route should review the terms carefully and compare other options first.

Time Social Security

The timing of Social Security benefits is one of the most powerful levers you control. Claiming early permanently reduces your monthly payment, while waiting past full retirement age boosts it for life, up to age 70. The difference between starting at 62 and 70 can be roughly a quarter to a third more income each month.

Being laid off can tempt you to claim as soon as you are eligible, but if other resources can cover the near-term gap, delaying often pays off. Decisions are largely permanent, yet there are limited do-overs: you can withdraw an application within 12 months, repay what you received and restart later, or suspend benefits after full retirement age if you return to work and want your future payment to grow.

Conclusion

A forced early exit from the workforce is unsettling, but it does not have to derail your retirement. Acting quickly to secure benefits, trimming expenses, exploring flexible work, tapping investments in a tax-aware order, weighing home-equity tools cautiously, and timing retirement benefits thoughtfully can turn a crisis into a manageable course correction. You are not starting from scratch—you are adjusting a plan with the experience you have already earned.