What to Do Financially After Getting Laid Off

If you were laid off, here are key financial steps to take right away, including reviewing health insurance, applying for unemployment, updating your budget, and deciding what to do with your 401(k).

We are hearing about massive layoffs from Microsoft, Meta, Amazon, and other companies.
Finding out you are laid off is like a bomb shell that just hit our lives. We have all types of
thoughts. How are we going to pay the mortgage? What about my health insurance? What will
my wife and friends think about being laid off? Will I ever find another job? We are so stressed
out about so many thoughts in our heads.So, for today’s blog and on KTVU tomorrow morning,
we are going to discuss a few simple tips to help you if you have been laid off.

First and Foremost Understand Your Benefits

When you get laid off notices first and foremost understand your benefits. Figure out how long
your current health insurance will last. Do you need to get the last refill of your prescription? Do
you need to schedule doctor appointments, kids braces appointments before your employer
benefits end?

Once your employer benefits end what happens to your health insurance? Look at whether you
should get the COBRA health plan your employer offers or whether you should apply for
Covered California. Where it might supplement your health insurance cost?

Review Your Numbers.

Update your monthly budget and expenses at home. You are no longer commuting to work or
eating out for lunch. Check out your numbers. Once you do that, figure out how much money
you have on hand. Look at your bank accounts, brokerage accounts and C.D.’s. At that point,
you can see how long your financial runway is before you need to make major lifestyle changes.
One backup plan is to set up a Home Equity Line of Credit, also known as a HELOC, before
getting laid off. This can be backup emergency money if finding a job is taking long than
anticipated.

Unemployment

Applying for unemployment after a layoff should be one of your first financial steps. Many people
don’t know this but; here in California you can apply for unemployment even if you have a
severance package. So, First and foremost apply for unemployment the day you get laid off. We
want to have as much continued cash flow as possible. Sometimes it might take weeks if not
months to start receiving benefits. So, the sooner the better.

Figure out Your Retirement Plan

Figure out what you should do with your employer retirement plan. Do you have a loan with your
employer retirement plan? Find out the plan rules? Can you continue to payback the loan on
your own so it doesn’t become a taxable event? Or do you have so many days to pay the loan
before it becomes taxes and penalties.

Now that you are no longer working at the employer, should you roll over those funds into an
IRA or Roth IRA? Should you keep the funds at your former employer retirement plan? My rule
is if they are not good enough for me to work there. They are not good enough for me to
keep my money there.

This is where having a financial advisor on your team helps. They help you bounce around
ideas and thoughts. Help you during this tough turbulent stressful time. Making sure you don’t
make mistakes on the way. This can cost you thousands of dollars and add additional working
years to recover from it.

If you were recently laid off or are worried about job security, schedule a consultation with
Matthews Financial & Insurance Solutions. We can help you review your benefits, health
insurance options, emergency fund, retirement plan, and next financial steps.