Dealing with Job Loss
Early key moves and decisions can make the difference between surviving financially until you're successfully employed again and making financial mistakes that could jeopardize your financial well-being for years to come. Whether you are recently unemployed or if you have been out of work for a while, below are suggestions to take while looking for work, as well as when you return to work.
• Don't panic
• Don't make any hasty financial decisions
• File for unemployment insurance
• Start looking for work soon
• Reassess your career
• Tap everyone you know for job leads - Network, network, network
• Handle severance package offer with care – read what you are giving up in return for the severance payments.
• Maintain health insurance – One relatively minor claim could wipe you out without coverage
• Continue life and disability insurance - If you let the policy lapse and reapply after finding a new job (assuming the worst does not happen and you die during your unemployment), your policy cost will likely rise, particularly if time has passed or your health condition has changed.
• Start an emergency spending plan – prioritize non essential spending and be prepared to continue to pare back expenses if your unemployment continues for a longer period of time
• Talk to your family
• Consider government or private assistance
• Make retirement plan decisions – look closely at your retirement plan holdings. If they are concentrated in company stock or a small number of underperforming mutual funds, you need to diversify. Rollover the investments into an IRA account
• Avoid ill-advised short-term investment decisions - Avoid tapping your retirement accounts, there are significant tax implications.
• Minimize debt burden - don’t use credit cards to maintain the lifestyle you had when fully employed. Make spending cuts necessary to live within your current means.
• Avoid filing for bankruptcy
• Gather all information available on your previous retirement savings plan(s) – 401K, pensions, etc
• See a financial planner - They can help make sure your investments match your risk tolerance and time horizon, as well as what changes you can make if your period of unemployment drags on.
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• Don't panic
• Don't make any hasty financial decisions
• File for unemployment insurance
• Start looking for work soon
• Reassess your career
• Tap everyone you know for job leads - Network, network, network
• Handle severance package offer with care – read what you are giving up in return for the severance payments.
• Maintain health insurance – One relatively minor claim could wipe you out without coverage
• Continue life and disability insurance - If you let the policy lapse and reapply after finding a new job (assuming the worst does not happen and you die during your unemployment), your policy cost will likely rise, particularly if time has passed or your health condition has changed.
• Start an emergency spending plan – prioritize non essential spending and be prepared to continue to pare back expenses if your unemployment continues for a longer period of time
• Talk to your family
• Consider government or private assistance
• Make retirement plan decisions – look closely at your retirement plan holdings. If they are concentrated in company stock or a small number of underperforming mutual funds, you need to diversify. Rollover the investments into an IRA account
• Avoid ill-advised short-term investment decisions - Avoid tapping your retirement accounts, there are significant tax implications.
• Minimize debt burden - don’t use credit cards to maintain the lifestyle you had when fully employed. Make spending cuts necessary to live within your current means.
• Avoid filing for bankruptcy
• Gather all information available on your previous retirement savings plan(s) – 401K, pensions, etc
• See a financial planner - They can help make sure your investments match your risk tolerance and time horizon, as well as what changes you can make if your period of unemployment drags on.
Return to News Home