My DH is facing taking early retirement aka a layoff, although we won't know for sure for a while, and he's managed to dodge several in the past 23 years with the same company. He's 61 and although articles we've read said companies are looking for software engineers, I'm betting they're not looking for those in their 60s. Hopefully I'm wrong. We were right in the middle of buying a short sale to use as a rental with a nice projected income stream. Now I don't know whether we should continue. The cash outlay would be about $30-$35K. We have another rental that needs a bit of fixing. We have a primary residence that we don't plan to stay in, and we owe about as much as it's worth. We have enough cash to last a couple of years if we don't buy the potential rental. So my questions are:

1. Do we continue with the short sale purchase? We wanted some extra income in retirement.
2. Do we fix up the other rental so that we can ask more rent? Currently, we can cover costs.
3. Do we sell our primary house and move into the rental, which is what we'd planned to do in the next few years? The payment is less--we were planning to pay the rental off soon. But we may have to come to the table with cash if we sell the primary now.
4. Do we refinance the primary using HARP, which would save us $80 per month with a 26 month payback of the closing costs and wait to see if we could sell for more in 3 years?

Thank you for any and all advice!

Other than the properties and emergency fund, do you have retirement savings? Will your husband get an early pension payout? Severance, or unemployment? How close are you to having enough income to live off of? Would taking early social security when DH turns 62 be enough to cover that gap?

What kind of CS work does your husband do? Has he been keeping up with his skills or are they 23 years old? I can't argue that ageism doesn't exist, but don't surrender to it preemptively. There are plenty of places that hire on skill and not age. Or perhaps he could start his own little startup?

It's very hard to offer any comment without a lot more information.

What sources of income do you have?
What are your expenses?
How much savings do you have?
Will your husband be getting any kind of severance or early retirement incentives? If he works for the big company that just announced massive layoffs then I think I'd try to hold on until I know if they are going to offer any kind of incentives.

23 years of service and 61 yrs of age. hire an employment lawyer. typically the company will pay off older employees when they show them the door. in exchange, you sign a piece of paper saying you won't sue them for discrimination. if everyone's head rolls, you'll have a problem. and any payout is negotiable.

also, i would think twice about the rentals. 1) they are a lot of work. 2) they are a lot of work.

you'll also need to a get a SS security strategy together. are you working? will you be collecting on your husband's record? how much does he get?

time to figure out what your actual expenses are, how much money you have and start crunching numbers. that will answer a lot of the other questions...

To answer some questions:

What sources of income do you have? Without a paycheck, we have Social Security for me, rental income = $1575
What are your expenses? About $3,500, although we can reduce that
How much savings do you have? Non retirement of about $95K
Will your husband be getting any kind of severance or early retirement incentives? 14 months base pay added to the pension, not given as a lump sum. If we start accessing retirement accounts, I think we'll run out of $, but we have an appointment with the financial advisor.

I contacted the unemployment office to see if unemployment is on the table--maybe, maybe not.

He will be looking for another job, but finding one at the payscale is going to be impossible, but that's okay--we just want to keep on contributing to retirement accounts and being able to pay expenses. Regarding social security, we'd prefer that he not start collecting at 62.

Thank you.

Have him look for contract work. Its always available(at least where I am), and I think they would be less likely to consider his age if they only want 6 months of work.

I get calls at least once a week asking about my availability.

After that, you could sell the rental you were about to pay off, and maybe that, combined with the 14 months base pay could bridge you into retirement.

I definitely wouldnt go through with the short sale unless you were certain it was going to pay off quickly.

Ok, it does not sound like you are in terrible shape. This just changes your plans. I suggest you get on the early retirement forums at early-retirement.org. I read a very similar story just the other day. There might be some people there that are more familiar with the details of what is going on because I suspect it is the same company.

Thank you. I did go to that website and see the post by the person who works for the same co.

I will add one comment to this thread that a lot of Boomers have gotten tripped up on.

Do NOT, under any circumstances, touch your retirement accounts for emergency funding!!

Not only is it unlikely at your ages that you could easily (within 2 yrs max) re-fund the account up to and past the original drawdown amount ($xxxx plus whatever compounded returns you might have earned, however small), but let's look at the sad possibility that nothing works out as you hoped: you're socked with higher-than-anticipated rental expenses, a serious medical emergency takes one of you down and bills start pouring in, no prospects for even part-time work.

Bankruptcy looms its scary head.

IRAs and 401k accounts are generally protected in bankruptcy. The legally tested limits are about $1M - past that, the bankruptcy judge might take the excess but right now there's no precedent and no IRS rulings either way.

So keep debts as debts, and don't muddy the waters by trying to use retirement funds to stay afloat.