By John W. Schoen Senior Producer
msnbc.com
COMMENTARY

Many older workers who get laid off face a tough time replacing their salary, and Michael in California is wondering just what is happening to workers who lose their jobs as they near retirement. Meanwhile, J.T. in Ohio is trying to figure out just how banks can offer "free checking" and still make money. (Hint: read the fine print of the fee schedule.)

I read about Ford, GM, Boeing ... laying off in the thousands but never of any company hiring thousands. What percentage of laid-off, unemployed 50- to 65-year-olds are able to increase their incomes when they do land a job? The years before retirement should be the highest earnings for Social Security benefits and retirement investment.
-- Michael K. Long Beach, Calif.

There's no question that some people in their 50s and early 60s who are laid off from high-paying jobs can have an extremely tough time finding a new job at the same salary. This is especially true for those who’ve worked for the same company or industry for their entire careers — and have built up experience, wisdom or a full Rolodex of contacts that may not translate to a new company or industry.

We were unable to find specific statistics on income gains or losses for workers over 50 who were laid off. (If you know of any, please let us know and we’ll follow up next week.) But older workers are clearly making up a bigger share of the so-called “mass layoffs” tracked by the U.S. Bureau of Labor Statistics. In the second quarter of this year, workers 55 and older made up 22.5 percent of the large-scale layoffs tracked by the BLS — nearly double the first quarter of 2001.

And your chances of finding a comparable job decrease the longer you’re out of work. Four years after losing a job at age 55, “the employment rate of displaced workers was 20 percentage points below the employment rate of similar nondisplaced workers,” according to a 2001 report in the Journal of Labor Economics by Sewin Chan and Ann Huff Stevens

Some of those “displaced” workers may become “discouraged” workers, and officially fall off the government’s statistical radar. When the government tallies the monthly employment report, it only counts those who are actively looking for work in the total workforce. So you can be out of a job but not show up in the labor force numbers used to calculate unemployment rate. And there's less data available on those workers who tell the Labor Department survey that they've given up looking for a job.

Still, it’s clear that many older workers are finding good jobs — especially as more and more baby boomers say they plan to stay in the workforce past the traditional retirement age of 65. Though big companies in older, mature industries may be making big layoffs — and getting the big headlines when they do — the overall U.S. job pool keeps expanding at a healthy clip. Since 2003, some 7 million more new jobs have been created than old jobs were lost. But “GM lays off 1,000” is news; “Advanced Bionetics hires three new workers” isn’t.

On average, wages for those new jobs are rising. Yes, there are many low-wage jobs being created. But earlier this week, the Labor Department reported that wages and benefits for the entire workforce, on average, rose faster this summer than they have in the past two years.

So the outlook isn’t all that bleak. And there’s some evidence that older workers are beginning to cut a wider swath in the workforce than ever before.

“Older workers more and more are in much higher demand,” said John Challenger, whose company helps laid-off workers find new jobs. While “certainly (age) discrimination hasn’t disappeared,” he said, “for those who want to work the market is opening up to them.”

As a result, the unemployment rate for people over 55 is just 2.9 percent — compared to 4.6 percent for the total population, said Challenger. (Again, people who've given up looking for work — or have been forced into retirement — don't count as "unemployed.") As of August, some 24 million workers were 55 or older — the highest level ever. And 5.2 million were over 65 — a gain of 45 percent since 1996.

As for your Social Security payments, the loss of a high-paying job doesn’t help, but it doesn’t hurt nearly as much as, say, a private pension that’s based on your last year’s earnings. That's because Social Security benefits are based on your total earnings history.

For example, a baby boomer born in 1950 now earning $65,000 a year can expect a monthly check of $1,756 a month in 2016. But if that person lost their job in 2006 — and didn’t earn another penny — they’d still be entitled to $1,746 a month in 2016 — a loss of just $10 in monthly benefits.

To estimate your benefits, check out the Social Security Web site.

About 10-15 years ago, I remember when banks charged its customers small monthly fees to maintain savings and checking accounts. Today, my bank charges me nothing to maintain my accounts as long as I have direct deposit. How can banks, today, service checking and savings accounts for free?  
-- J.T.,  Columbus, Ohio

When was the last time you reordered fresh checks?

My bank charges $25 for a pack of 150 (plus shipping and handling), which works out to nearly 20 cents a check — for a "free checking" account. And if one of those checks is presented for payment before the bank decides the clear a deposit, the bank charges $30 — per check. For the virtually costless service of accepting a wire transfer, expect to pay another $25. And don’t forget the $1.50 you get clipped every time you use an ATM machine — a device that saves the bank money by reducing the need for tellers.

Though they may call it “free checking” when you sign up, there are plenty of fees out there and they're getting bigger all the time. Bankrate.com — which tracks a wide variety of consumer interest rates — recently found that the average fee for a bounced check is now a record $27.40, up from $27.04 last spring. ATM fees are up to a record $1.64, on average, from $1.60 in the spring and $1.54 a year ago.

Some banks will also tout their “interest-bearing” checking accounts that pay a dividend on money left in the account — as long as you maintain a minimum balance. (That minimum rose 43 percent in the latest survey — to about $615.)

But, according to Bankrate, that interest rate averages just 0.34 percent. By comparison, the so-called federal funds rate that banks charge each other is 5.25 percent.  So, by lending your money around, your banker can make nearly a nickel on every dollar you leave in the account.

Here’s more on what you’re paying in checking fees .

I'm a third-year college student and am a little confused about which way I should go regarding investments. I work for a company that offers a 401(k), but I do not plan to be with the company long I plan on leaving when I graduate. However, I was thinking about setting up a Roth IRA. Is this the road to take, or am I making the wrong decision to not take advantage of the 401(k)?
Kay, Chicago, Ill.

For someone just getting started — especially if you’re in a low tax bracket — the Roth IRA is a good way to go. The main difference is that while a traditional IRA lets you take a tax deduction for money you contribute, you’ll pay taxes on the money when you withdraw it. With a Roth IRA, you pay tax before you put it in the account, but you won’t owe taxes when you withdraw it. Since you’ll have a lot more money to withdraw when you retire — and could be in a higher tax bracket — you end up paying less tax in the long run.

As for the 401(k), that's a no brainer. Even if you’re there for a short time, you can always roll it over into an IRA when you leave. And you should always take advantage of any employer matching of your contributions — to the fullest.

Think of it as your boss leaving $20 bills lying around on the floor — but the only way you can pick them up is by sticking a $20 bill of your own onto each one.

That’s pretty easy money.

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