En español | I've been reflecting on what you might call "the uncertainty principle" of midlife. These are the years when you pull together your ideas about how you're going to live in older age. There's no perfect plan, only everyday good sense (Plan A) and a fallback position (Plan B). (Plan C is total denial, but you don't need a money columnist to help you with that.)
See also: How to fix your 401(k).
Some of you will make it through successfully with your Plan A, which I'll sum up as "save money, work as long as you can, hang on to health insurance, then live on Social Security and personal assets."
But others will fall short. Many lost critical savings during the 2008 financial collapse, or were forced to retire before they were ready, financially or emotionally. Or they were laid off (or nudged into a "voluntary" buyout), laid low by an illness or disability, or they have to care for an ailing spouse.
I've seen shocks like these hit some of my own friends. There's the deputy editor, 58, with a child still in college, who worries his job is in danger because a new (and younger) editor was just hired. There's the once-wealthy real estate investor who got caught in the credit collapse and, at 72, filed for personal bankruptcy. The Great Recession buried the business of a third friend who installs solar panels. He's starting over, without savings, at 49.
Plan B addresses the question, "What would I do if something like that happened to me?" The answer comes in two parts — just-in-case preparation (which serves Plan A as well as Plan B) and execution.
Preparation: This is where the "good sense" part comes in. Well before you're 55, start prepaying your mortgage and wiping out your consumer debt. Those monthly costs can be tough to meet when your paycheck stops.
Save more money — it's never too late. If you have a 401(k)-type retirement plan at work and are contributing only 5 percent or so, bump it up, even if you think you can't afford the increase. It can't hurt to try, and odds are, you'll succeed.
Women especially should make the attempt — research shows they often have less retirement savings than men, due mainly to lower pay. Workers without 401(k)s should start an individual retirement account at a bank or mutual fund.
Those whose modest earnings limit how much they can save should prepare to tailor their expenses to the income they can expect from Social Security (plus pension, if they're lucky).
Assess your job security. (My personal rule of thumb: You're vulnerable if you're 20 years older than your boss, despite age discrimination laws.) Start improving your competencies — community colleges offer courses to help you upgrade your skills or change careers. Job searches are harder for older people, but it helps to show flexibility and willingness to learn.