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You've Lost Your Job. What's Next?

Take stock of your assets, regroup and focus on finding employment

Sudden job loss can leave you reeling. You’re overwhelmed, wondering, “What do I do? What about my family?”

See also: 5 great part-time jobs.

This is a devastating reality for many workers particularly in uncertain economic times, especially older employees who currently average 54.2 weeks of unemployment before finding another job.

Everyone’s circumstances are different. If you’ve been a long-standing employee earning a progressive salary and benefits, you may be eligible for a severance package, health insurance under COBRA (the Consolidated Omnibus Budget Reconciliation Act) if your former employer offers it and you can afford it, and unemployment insurance (These days, you can file online and avoid waiting and longelines). Together, these might give you the time and financial resources to stay on top of your bills until you land your next job.

If you’ve established an emergency fund covering at least six months of regular expenses, you may feel less anxious if you become unemployed. But for most, panic, understandably, is the obvious response to job loss.

A recent study, "Temporary Derailment or the End of the Line? Managers Coping With Unemployment at 50," looked at coping strategies of people whose identities were wrapped up in position, status and achievements, and who were laid off late in their careers.

The study identified three types of mindset common to those who had suffered job loss:

  1. Temporary derailment: These people were unwilling to concede their careers had ended and feverishly looked for employment.
  2. End of the line: These people felt hopeless and bitter. They believed their careers were finished and didn’t look for employment or only looked erratically.
  3. Moratorium: These people accepted their job loss as beyond their control. They separated their identities from their jobs and pursued positive options such as temporary positions, education and volunteering.

The study focused on managers and other professionals, but just about everyone would most likely respond in one of these ways after losing a job.

Once you get past the initial shock of unemployment, it's important to keep a positive frame of mind, even during such a stressful time. It's also important to acknowledge and grieve job loss as a major life trauma, especially if you've invested years in a company. But it's crucial to look at things rationally and begin to make a new career plan. Doing some form of exercise is a great way to channel your emotions.

One woman wrote an article about her husband's layoff, describing how they'd seen "the writing on the wall" ahead of time. The husband had worked more than 20 years for the same company. Although it was painful, the couple started strategizing before the pink slip arrived.

Like this couple, if you know the layoff is coming, do your best to prepare in advance. Update your résumé now. Think about future work opportunities within and outside your current field. What's the growing industry in your area – do you have related skills or can you develop them? What about networking?

Don't wait until you're laid off to connect with potential links to your next job, and make sure to investigate the myriad approaches to job searches.

Also examine your bills and spending habits. Find ways to cut back and pay off as many debts as possible. If your children are grown and gone, consider downsizing and spending less on rent or mortgage. This may free up money to help with current expenses or future needs.

There's no "easy" button or guaranteed formula for recovering from job loss. Dealing with job loss, or planning for the possibility, calls for staying calm and focused while maintaining true grit and determination. These are critical factors for weathering the current tide of unemployment. AARP is here to help with several resources for older workers. Life Reimagined for Work connects jobseekers with employers who are hiring. These employers have signed a pledge to treat older job seekers fairly, in the recruitment process You can also join the Life Reimagined for Work discussion group to get questions answered about your job search. 

Jon Dauphiné is a senior vice president at AARP.

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