There is always a certain degree of shock when some get laid off from a job, whether they see it coming or not.

Although the actual layoff may not in itself be shocking — especially if the company had already announced planned consolidation —the first day out of work is a shock to the system.

You no longer have a schedule. You no longer have somewhere to go during the day. There are no more deadlines to meet. But most importantly, outside of unemployment benefits there is no longer any income coming in.

Many of us now have transient careers in which we work somewhere for several years before jumping to a new opportunity. Being unemployed, although difficult, is something that is manageable. But imagine that you had started with a company right out of college, worked there for over 30 years and are now essentially facing unemployment for the first time in your life.

This is a difficult reality many baby boomers are facing, especially as unemployment has skyrocketed over the past two years.

“It’s a huge shock. It’s really a big deal,” said J. Graydon Coghlan, president and chief executive officer of Coghlan Financial Group in San Diego. “They have not even had to fill out a resume for 30 years. Their pension has stopped growing.”

The Coghlan Group specializes in this area. It works with several companies in California where an employee with decades-long tenure is not uncommon. Major layoffs during the recession have also not been uncommon. If there is a buyout offer on the table, Coghlan will advise a client on whether or not it’s big enough to take, or what the risk could be if he or she declines it. What if the client turns down the buyout and is laid off shortly thereafter?  

“They are faced with a lot of decisions to be made,” Coghlan said. “Recreating their paycheck and how they will get money out are important. They had never really invested outside their company plan.”

Once a person is unemployed, there is even the very simple task of writing a resume. For many boomers, this is something they haven’t had to do in more than 30 years. They are now faced with the daunting task of trying to get their resume at the top of a potentially thick pile of resumes when looking for a new job.

But the biggest issue is finding income now that they no longer have a regular paycheck. Fifteen years ago Coghlan wrote a program called The Retirement Planning Review, which is a 35-page analysis. It calculates retirement income, looks at pension options, rules and regulations, cash flow and takes into consideration both spouses’ income and retirement resources. Coghlan updated the program for changes in the rules, like those found in the Pension protection Act of 2006.

“It is specifically written for the individual and company they work,” Coghlan said.  “It looks at how much they will meet or beat their income needs with the rate of return on investments. If it looks good we then have them fill out a risk tolerance questionnaire. That will help them understand how much income they can get with the risk they’re willing to take.”

If the returns a client needs aren’t realistic with the risk he or she is willing to take, Coghlan will let the client know. For those unwilling to move their risk tolerance up, the reality is that they will likely have to get a new job sooner rather than later.

“A lot of times they get into retirement mode and they start draining their IRA and don’t want to go back to work,” Coghlan said. “But you have to be able to go out and get a job and cover this shortfall. It’s a tough situation to be in because there are a lot of people in the same situation.” 

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