Six Steps to Navigating a Job Loss
Six Steps to Navigating a Job Loss (4:12)
In this video, Herr Capital Management's Managing Partner, Terry Herr, CFP®, CLU dives into 6 steps when facing a job loss, layoff or transition.
Hi this is Terry. Welcome to the prosperity blog cast. Today, I am going to give you the six steps if you've just lost your job. The Six financial steps you've got to take today.
Apply for Unemployment
Apply for unemployment right away every state's a little bit different most days you go online and there can be a little bit of a waiting period so you don't want to delay on getting that done.
Negotiate your Severance
Number Two, You want to negotiate your severance package. If you sit down with your employer and they announce the layoff or that you're going to be losing your job, they may present you with a package. You don't want to sign it right there. You want to take it home think about it. Reference your employee handbook and then maybe come back and negotiate things - So if the job required you to move to get there, maybe there's some packages, some assistance to help you move back home or anything like that.
Evaluate Your Retirement Plan
You might have a 401k or a 403b plan. Once you've lost your job, you can no longer take a loan against that plan so you're going to have to look at it and see if the balance is below. They're probably going to ask you or probably make you roll it over to an IRA. Iif it's more than five thousand you have a couple of options - You can leave it in the plan, you could roll it to an IRA, you could roll it to an IRA with the idea that you'll roll it into your next employer's 401k plan. However if you do that, you got to be careful and make sure you don't mix it with another IRA account. Once you mix IRA accounts with the 401k rollover, you can't put that money into the next 401k plan. So it's really important that you do it right.
Create a Spending Plan
Create a spending plan. Look at your expenses. Maybe get your credit cards, your debit cards - See what you've been spending your money on. It's important that you really look at what's essential. So that's going to be your groceries, your shelter - that's your rent, your mortgage, those things you want to make sure that you have covered. Hopefully you've got a little bit of an emergency fund built up but you don't want to have to tap into it unless you have to but really look at your spending see what you can cut back how you can save.
Get a Side Hustle
See if you can get a side hustle. Look for things that you're interested in. Maybe you can drive for Uber; Maybe there's other ways that you can generate some income; Maybe your employer will hire you back as a consultant on a part-time basis. Anything you can do to just try to help avoid having to tap into your savings accounts.
Avoid Making Drastic Changes.
Finally, avoid making drastic changes. Most likely your emotions are high, you're upset. You're not sure what you're going to do because you just lost your job and that sucks. But remember that's an emotion. Most job transitions, most layoffs tend to be shorter duration. It's a bump in the road so you don't want to make drastic changes that will impact your long-term financial health. Just to give you a little bit of comfort and peace of mind today, so really you need to look at that. Balance and decide that your retirement accounts are going to be one of the last place you want to touch because that money is really designed to be your long-term money.
So we'd also encourage you to contact us. We're happy to walk you through some of the steps and look at your situation a little bit more in detail and that is unique to you. That's what we do here at Herr Capital Management. We're all about customization - Making sure that we give you the right plan for You. To help you live a life of prosperity. Thanks for tuning in. We appreciate you taking the time.
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