Feeling blindsided by a layoff in your 50s? You’re not alone—many Americans are forced to retire earlier than planned. But this moment can be a fork in the road. In this episode of Next Act Ninjas, Rachael Van Pelt shows you how to turn job loss into opportunity. Weigh whether to return to full-time work, part-time work, or pivot toward early retirement. Map out strategies to bridge the gap years before Social Security and Medicare. Discover how to align your wealthspan with your healthspan and avoid wasting your best decade.
Feeling blindsided by a layoff in your 50s? You’re not alone—many Americans are forced to retire earlier than planned. But this moment can be a fork in the road. In this episode of Next Act Ninjas, Rachael Van Pelt shows you how to turn job loss into opportunity. Weigh whether to return to full-time work, part-time work, or pivot toward early retirement. Map out strategies to bridge the gap years before Social Security and Medicare. Discover how to align your wealthspan with your healthspan and avoid wasting your best decade.
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Chapters
00:00 Laid Off in Your 50s? Why It Could Be Your Best Opportunity Yet
02:45 Early Retirement vs. Going Back to Work: How to Decide Wisely
06:47 Why Your Healthspan Matters More Than Your 401K Balance
09:05 Bridging the Gap Years: Healthcare, Income, and Smart Withdrawal Strategies
13:22 Maximizing Your Go-Strong Decade: Aligning Wealthspan and Healthspan
Hey, hey, welcome back, Ninjas. If you've been let go from a job five, maybe 10 years before you were planning to retire, first, let me just say you're not alone. It might feel isolating, like you're the only one in this position, but the reality is than half of Americans retire earlier than they planned. And for most, that exit isn't voluntary, it's layoffs, age discrimination, health scares, or family caregiving that force the early departure. So if you're sitting there thinking, "why me, why now"? It's not a personal failure. It's actually the norm.
But here's the part that doesn't get talked about enough. This moment, as scary and uncertain as it feels, is an opportunity to create your best Next Act. It's a fork in the road, of course, but you do have options. You can update your LinkedIn profile, pound the pavement for another paycheck, double down on the full-time grind. Many do just that. But I want you to ask yourself, "at what cost"? More stress, more hours at the desk, less time for pursuing a healthy active retirement?
The other path, the one we don't always give ourselves permission to consider, is to pivot. To see the layoff not as a setback, but as a hidden opportunity. It's the chance to ask, "Do I keep running or is it time to design a new lifestyle"? One that invests more in my healthspan, leverages the wealth I've already created, and sets me up to enjoy my strongest decade rather than missing it altogether.
Now I want to be clear, this won't be the same decision for everyone. Some people truly have no choice but to go back to full-time work because the financial cushion just isn't there. But others, others could thrive with a hybrid approach, maybe part-time work or consulting, perhaps dialing down expenses to subsidize retirement rather than delay. And a few of you, if you've planned and saved well, you may discover that you already have enough to retire fully and that going back to work would actually rob you of your best years. So before you make a move out of fear or on autopilot, I want you to stop and ask, "Which fork in the road am I going to take? Will I continue on the work-as-long-as-possible road or can I afford to pivot? What are my options"?
This is where we need to move past fear and look at the numbers with clear eyes. Start by taking inventory. What is your total net worth? Tally up what you currently have in all of your retirement accounts, 401Ks, IRAs, Roths, then add up any other stocks, bonds, gold, cash, whatever you have that isn't in those traditional retirement accounts. And don't forget any real estate you own. Calculate the equity you have in those properties based on what you think you can sell the property for today, minus any mortgage payoff or closing fees.
Once you've tallied all of that up, take a look at all your expenses. Break them down into two buckets. The first bucket are your fixed expenses. That includes the non-negotiables like mortgage, utilities, insurance, groceries. The second bucket are your discretionary expenses. These are the nice-to-haves like travel, dining out, the second car in the driveway, that sort of thing. Get crystal clear on what it really costs you to live your lifestyle because that's the baseline you're solving for.
Then once you know how much you need per year to live on, just multiply that number by 25. That's going to give you a good ballpark for how much money you need to retire. For example, if your living expenses are around $80K per year, then you're going to need roughly $2M saved for retirement. Do the math. Do you have that net worth that you need after tallying up all your investments?
And we can't forget to factor in the gap years, those years between now and when benefits like Social Security and Medicare kick in. The gap to Medicare is where many people get stuck because healthcare is expensive. If you leave work at age 55, you could be looking at 10 years of coverage before Medicare kicks in at age 65. And then there's the income gap. If you're not yet 59 and a half, you can't tap into your 401K or IRA without incurring early withdrawal penalties. And Social Security isn't on the table until 62, is it? So the question you have to ask is, can I fund these gap years with other investments? Maybe you have other stocks and bonds outside of your 401K, or you have a property that you can sell. It's important to look at what options you have for pulling money forward to cover the gaps without shortchanging your 70s or 80s.
And look, I realize this isn't a fun exercise for most people. Not everyone is a numbers geek like I am. An accurate financial picture takes time and effort. In fact, it took me a day or two just to do this for me and my husband. And even if you have the help of a financial planner, it takes time because you have to pull much of the data for them. That said, if you want to make an informed decision about whether you can afford to retire early, this is time well spent.
Because once you run the numbers and factor in the gaps, you'll usually find yourself in one of three categories. Some people discover they have no choice. The savings just aren't there yet and that they're going to need to return to full-time work at least for a few more years. Others realize that they can make it work by subsidizing retirement with part-time, maybe consulting or teaching or another side income, enough to cover the basics while freeing up time to protect healthspan. And a fortunate few find out that they're already set, that they can pivot fully and confidently into early retirement without jeopardizing their future. The key is that you don't just impulsively react while you're in a daze from being laid off unexpectedly. You model it out, you get clarity. Because once you know your numbers, you can make a better decision.
But wait, deciding to retire isn't all about the numbers, is it? Your wealthspan is only half the picture. What about your healthspan? As I often talk about on this podcast, your 50s and early 60s are a pivotal biological window. If you don't invest wisely during this window, your Go-Strong years can evaporate just as quickly as your severance package. Strength, fitness, balance, even cognitive still tangible assets, but only if you keep investing in them. When you really invest time in your health, you get to delay age-related declines for maybe a decade or more. But when you neglect your health, those declines accelerate.
So the question is, what's better for your healthspan, working longer or retiring sooner? For many, the answer is obvious. Retiring sooner will clearly open up time to invest in your strength and fitness and overall wellness. It's also going to free up time for pursuing other life experiences, which means more time to create memories while you still have the energy and vitality for adventurous vacations and active family trips. Or you have more time to start that part-time business you always dreamed of while you still have the energy for it.
Regardless, it's a balancing act, isn't it? You are simultaneously trying to keep growing your wealth while at the same time you're racing the clock of aging. Those Go-Strong years from age 55 to 65 are limited. Sure, you can power through the next 10 years to save as much as possible for maximal financial security. But at what cost? Is that extra money you save going to offset the cost of declining health and missed years of fun? It's doubtful.
Clearly, your readiness to retire isn't just about wealthspan. It's about healthspan. Every workout, every healthy meal, every night of restorative sleep, that's a strategy just like financial investment. If you pivot now, you won't just extend your years, you'll extend the quality of those years. And that's the real prize, isn't it?
But let's get back to how to fund those years wisely. This is where a lot of people make one of two mistakes. Either they panic and hoard, refusing to spend a dime for fear of running out, or they throw caution to the wind and drain accounts too fast. The real answer lies in precision. It's about bridging your wealthspan strategically so that it lines up with your healthspan.
The first bridge is healthcare. If you step away from full-time work before the age of 65, you're facing that Medicare gap we talked about. This is a big stumbling block for people who want to retire early, but it's not an unsolvable problem. You have a few options. You can of course, extend your employer coverage with COBRA, at least temporarily. You can shop the ACA marketplace. Subsidies there are often better than people expect, especially if your income dips those early retirement years. Some people even stitch together coverage through part-time work that offers benefits, or they join a health-sharing co-op. None of these are perfect, but all of them are tools to bridge the gap without draining your savings.
The second bridge is income. Your retirement accounts are like a row of dominoes. Which one you tap first makes a huge difference down the line. If you're under 59 and a half, don't touch your tax-deferred 401K or IRA if you can help it. Use other taxable investment accounts first to cover those gap years. You'll still be taxed on the capital gains when you sell those investments, but at least you're not paying any extra penalties for early withdrawal. That said, if you happen to be laid off at age 55, you can start withdrawing from your 401K penalty free. So keep that in mind. Also, there are other strategies like the 72(t) SEPP that allow you to withdraw from your 401K early without penalty. I highly recommend that you talk to a tax strategist about how to best keep growing your wealth while managing your tax brackets effectively. For some, this is a great time for a Roth conversion. If you're in a lower income phase of retirement, you can shift money from your 401K to a Roth IRA at a lower tax rate. That way when required minimum distributions (RMD) kick in at age 75, you're not going to be blindsided with a huge tax bill.
And let's not forget real estate. I've seen clients unlock enormous flexibility by downsizing or right-sizing into a more efficient home or by adopting a sunbird lifestyle where they split time between a higher-cost and lower-cost location. Sometimes bridging a gap is as simple as selling a rental that's more headache than income and reinvesting the equity into something that actually supports your lifestyle. Remember, real estate isn't just an asset, it's a lever. Use it.
And once you figure out how you might pull income forward to bridge the gap years, think about creating two buckets for those funds. One is your Baseline fund and the other is your Go-Strong Fund. The Baseline fund is for your steady expenses, housing, food, utilities. Those are the things that you need every year, whether you're 55 or 85. The Go-Strong Fund is discretionary, but also front-loaded. It's your bucket for high-energy experiences like international travel, adventurous hobbies, maybe even that dream RV trip across the country. Use it while your body can still cash the check. If you keep those buckets separate, it's going to help you spend confidently.
The point is this, optimizing your wealthspan isn't about deprivation and it isn't about reckless spending. It's about sequencing, precision and creativity. You're trying to match your spend rate to your energy and health. Because the truth is, money is energy. It took energy to accrue it and it will take energy to spend it. So it's not about how much you have squirreled away for a rainy day, it's about whether you can actually enjoy it while your body and mind are still rocking and rolling.
Bottom line, going back to full-time work in your 50s after a layoff might feel like the safest choice. But in many ways, it's the riskiest. Why? Because it trades away the one resource you can't replenish, your Go-Strong years, your power decade.
Financial advisors love to show you the math on working a few extra years, bigger 401K balance, higher Social Security check, fewer years of withdrawals. On paper, it's elegant. But biology doesn't care about spreadsheets. If you keep working longer, you'll have more money, of course, but you'll also have fewer healthy years to spend it. You'll be starting retirement with less strength, less fitness, less mobility, less energy, less cognitive function, which means many activities and adventures will be off the table. So the real risk isn't running out of money, it's running out of healthspan. It's missing your best years because you were stuck behind a desk, believing that working longer was the only responsible choice.
Sure, there are people who truly need to go back to work full-time. But if you're someone who could make early retirement or part-time work feasible, then delaying out of fear or because you're on autopilot is actually a reckless move. Because the returns on healthspan are not linear. Wait too long and the window slams shut. No amount of extra money in your retirement account at age 70 will buy back the vitality that you had at age 58.
So here's my challenge to you. If you're facing this fork in the road, don't drift back into the grind by default. Decide from a place of clarity. Being laid off in your 50s could be a massive opportunity. Run the numbers, assess your health, formulate a strategy. Better yet, hop on a call and I'll help you get started. You'll find a link to my calendar in the show notes. I'll help you map out a strategy for maximizing healthspan and wealthspan so you don't mindlessly miss your power decade. Remember, your Go-Strong years are not a luxury, they're the foundation for your best Next Act. Use them well and you won't regret it.
Until next time, my friends, live well, love more, age less.