Younger people may have time to return to saving, paying down debt and investing after being made redundant, but older workers have a tighter timeframe to work with. File photo. Photo: 123rf
Katie, 60, has just been told her job is likely to go.
"We are still in the consultation and submission phase," she says, "which is an absolute joke because they decided this months ago and even effected a good bait-and-switch move to shift everyone into a new team and now said the team is too big and unwieldy and needs to get trimmed."
Unemployment forecast to keep rising
She said she felt the decision to axe her role was ageist because she is the oldest person in the team.
"I'm going to ask for all material concerning the disestablishment of my post - because three of us are being let go and we are the hardest-working members of the team so I would like to know the reason."
But Katie - who RNZ has agreed not to identify because of that ongoing process - said the fact she was now facing such uncertainty, relatively close to when she might have thought about retiring, made her realise she should have been more responsible with her financial decisions in her 50s when she was earning "quite good money".
"There is lots of advice and help out there but I think I'm like a lot of people who don't really think time is coming for you as quickly as it does.
"I can't blame anyone but myself for not being better set up financially in the face of an emergency situation."
She said she had previously run a contracting business and was planning to try to return to that.
As unemployment increases, so too does the number of people losing their jobs in what have historically been the pre-retirement years.
That can have major implications for their financial lives post-65, too.
The unemployment rate for people aged 55 and over increased from 1.9 percent in June last year, to 2.8 percent in the most recent data.
That represents an additional 6400 people unemployed.
That is broadly in line with overall unemployment increases, but that overall figure is skewed by how little people in the 30 to 44-year-old age bracket have been affected.
But while younger people may have time to return to saving, paying down debt and investing, older workers have a tighter timeframe to work with.
Someone who is 60 and earning $120,000 a year with $70,000 already in KiwiSaver, contributing 3 percent plus an employer's 3 percent might be on track for about $110,000 at retirement in a balanced fund at 65.
If they took a four-month break it would reduce their savings by a couple of thousand dollars. One year off contributions could reduce it by almost $12,000 and not returning to KiwiSaver contributions at all could cut their final balance by $25,000.
Ed McKnight, an economist at Opes Partners, said 50s and 60s tended to be the time in which people saved the most money.
"They are still on high incomes and their expenses tend to decrease. They become empty nesters as their children become independent. Usually, they are mortgage-free or have very low mortgages," he said.
"On top of this, when people are young they don't think about retirement. But as you get to your late 50s, retirement becomes top-of-mind. It's your last dash to pay off the final part of the mortgage or bolster your retirement savings.
"This combination of motivation and lower expenses helps people in their early 60s save more. However, if they lose their job, that puts their plans in jeopardy."
He said it could be a major problem if someone was paying off the last of a mortgage.
"Let's say a 60-year-old still has a $100,000 mortgage and they want to pay it off by the time they turn 65. They'll pay $445 a week to the bank.
But what happens if they lose their job and don't earn an income for a year? They might decide to pay interest-only for a year while they find a new job.
"Now they only have four years to pay off the mortgage. So, their mortgage repayment increases by almost $100 a week. They now pay $541 a week to the bank. That's an extra $96 a week they could have saved."
He said if that nearly $100 a week had been able to be invested instead, it would have netted $22,000 over four years in a balanced fund.
David Boyle, former general manager of investor education at the Retirement Commission said it was potentially more challenging for women.
"Because they will most likely have less saved, their incomes tend to be less so their next role is even more likely to be lower paid than what they are earning now."
People could opt for a part-time job, he said, if nothing full-time was suitable.
"I think we all will need to adjust our retirement dreams to start a little later in most cases. 65 is just a number not the finish line to working life.
"Those in their early 60s who have lost their jobs and wanted to retire at 65 will need to move this out a bit. Think about 68 as a more realistic retirement age. This has significant benefits not only financial but their overall well-being. Retiring later means that, once they get a new job, they won't be eating their retirement savings.
"They will be spending less and earning more while topping up their retirement nest egg for later in life. They will also get an additional income that could be put forward to savings as well being their national superannuation... Still this is not an easy time."
He said while employment opportunities might look limited in the short-term, they should improve.
Council of Trade Unions policy director and economist Craig Renney said the number of "elderly adjacent" people, aged 55 to 65, in the workforce had increased a lot, which meant more people were exposed to potential job loss later in life, too.
Their participation rate had lifted from 50 percent in the 1980s to 80 percent. The percentage of people over 65 working had lifted from 8 percent in 1986 to 26 percent.
Many people felt they had to work, he said. "For many people it will be a financial choice. The welfare state works as long as you own your own home... ageism and age discrimination for the senior workforce can become more of an issue.
"The key thing is this is likely to become more of an issue because there are simply more people in work."
Ian Fraser, who founded the Seniors at Work recruitment platform, said he was getting 25-30 percent more people coming to him for help.
"A number of older people who have made redundant or who need to work all of a sudden, those numbers have increased quite significantly."
He said he advised people to brush up their CVs to make them more concise. "Brutally, they are only interested in your last 10 to 12 years of work experience. I know I was quite proud of some of the stuff I did in the 70s and I would put that in the CV until someone said 'not interested', simple as that."