One big reason people plan to work later in life, including in retirement, is that they have not saved enough for retirement. (Maximkostenko /iStock)

A friend recently called to tell me he had been laid off from a company where he worked for more than a decade. He’s 60 years old and not ready to retire, either financially or emotionally.

He is, however, prepared for the reality of the situation. He recognizes that he has a tough road ahead. He knows he probably won’t ever earn the salary he had. And even for a much lower-paying job, he’ll be competing with people half his age.

Need proof of that? A GAO report in 2012, the most recent available, said unemployed workers 55 and older were the least likely to find another job.

“I speak to a lot of big audiences of people over 50 looking for jobs,” says Kerry Hannon, career expert and author of “Getting the Job You Want After 50 for Dummies.” “I feel and I see the palpable fear. The job market has not improved for this set of people.”

“It’s not a pretty scene,” she says. “What happens is people say they will keep working, but for various reasons, including health, they don’t keep working.”

Employment consultant Sara Rix says surveys show that up to 80 percent of people think they will work in retirement. A much lower percentage of people actually do (19 percent, according to the AARP).

People don’t continue working for many reasons: layoffs, health and unexpectedly becoming a caregiver are just a few.

Those still able to work can face tremendous difficulties finding a new job. The elephant in the room is age discrimination.

“We are struck by the data that show it takes an awful long time for older workers to find new employment after losing a job, over 40 weeks,” says Daniel Kohrman, senior attorney with AARP Foundation Litigation, “and that’s consistent with our experience from working in legal cases over many years. Part of the challenge is that there are a lot of stereotypes out there about older workers.”

One big reason people plan to work later in life, including in retirement, is that they have not saved enough for retirement.

Fifty-seven percent of retirees reported having less than $25,000 in savings and investments, not counting their homes or traditional pensions. Twenty-eight percent said they have less than $1,000, according to a survey by the Employee Benefit Research Institute and Greenwald and Associates.

So they think they will keep working to help make up for the money they did not save. It just doesn’t work out that way.

And because they are so unprepared financially, many forced into an early retirement are taking Social Security earlier than planned. That can cost them thousands of dollars over a lifetime. If you apply for benefits at 62, your benefit will be 25 percent less than had you waited until full retirement age.

“If they get laid off in their late 50s or early 60s, the odds of finding a job paying what that existing job did are slim,” says Timothy McGrath, managing partner at Riverpoint Wealth Management in Chicago. “It would not be unusual for a client making a half-million a year to have to find a job making $100,000.

“We can’t plan that we are going to always work or work till 65,” he says. “There is a good chance they will not work where they want to. They may find a lower-paying job, but that might meet their retirement objective.”

Television personality Rene Syler, former co-host of The Early Show on CBS from 2002 to 2006, lost her job when the show was revamped.

“You are either being forced out or you leave on your own volition,” says Syler, 54, now an author and founder of “I think those numbers are really growing. What is happening to people like me? It’s not like we will be able to have a job and career that we retire from, and have a pension and live happily ever after. I never had a pension. I expected to do it longer than I did.

“The older the population gets, their careers may be over, but they have to continue with their lifestyle,” says Marty Welch of the Legacy Franchise Group. “It can be a challenge with people who are not able to live off their Social Security or a pension. This generation is living longer, into their 80s, so a lot of times they will need income.”

McGrath says people always think they want to work, but when they get older, they often want to do it on their own terms.

“I have clients who love their jobs in their 40s and hate it in their 50s,” he says. It’s an adviser’s job to bring up things that a client can’t imagine.

“Most people who are making good money, there is a reason,” he says. “When you get in your late 50s and 60s, it’s usually not fun. They get laid off or can’t take it anymore, and then they want to something different.”

Rix, meanwhile, says people often leave voluntarily, thinking they will easily find another job.

“If you are planning on working in retirement, having something lined up before you submit your papers to your employer is a good idea,” she says. “Not only is it easier to keep a job than to find a job, it’s easier to find a job if you have a job.

Planning will play a big part in preparing you for life after a forced or unexpected retirement. “You’ve got to start planning at 55 what you want to do at 60,” Hannon says. “People don’t. They don’t think that far down the line.”

Next week: Planning your second act.