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My wife and I are almost 50 and just started working again after being out of the job market for two years. Basically we have nothing left. How do we start to build again? -- Tony, Allentown, Penn.
Given that the unemployment rate for people age 45 to 54 soared to more than 8% in 2010 (and still hovers above 6% now) and that the unemployed in that age group have been out of work for almost a year on average, many people face the same daunting task you do: rebuilding their finances late in their career after a devastating setback.
I know I don't have to tell you how tough that can be. You're living it.
Clearly, the extent to which you can recover from a major setback depends on what kind of financial shape you were in beforehand and how much you had to drain your resources while unemployed. It's also true that you stand a much better chance of improving your future prospects by coming up with a rebuilding plan and sticking to it as much as you can.
Here's what you can do to get back on track:
1. Get your debt under control. During prolonged bouts of unemployment many people are forced to fall back on credit cards, home equity lines of credit or other forms of borrowing to survive.
If you've had to resort to such tactics to get by, now's the time to assess where you stand.
Your first step is to assure you're making at least the minimum payments required to stay current, especially on any housing debt. The last thing you want is to see your financial recovery derailed because of late fees and penalties or, even worse, a foreclosure or other attempt by a lender to call in a loan.
Laid off and making the retirement savings last
Once you're sure you're meeting the...