Mass layoffs in the tech industry are becoming a regular occurrence and if you’ve experienced a recent layoff, you might not be as prepared as you thought. Now, what do you do? Below are some simple steps you can take today and start preparing for the future you want.
First, file for unemployment; this will give you some room in your budget. People being laid off are often eligible for unemployment when your position is not being replaced. Each state agency is different but some common examples are the Employment Security Department, Workforce Commission, or Employment Development Department. The eligibility for unemployment varies by state, but typically requires that you worked a specific amount of hours over a set time period.
Second, it’s necessary to get your financial bearings. Start by creating a budget and reviewing your assets and liabilities. These figures will be a compass on how to move forward. As you analyze your financials, try to shave off any unnecessary expenses which may include: dining out, subscriptions, and personal care.
Third, do you have enough savings to make up for the deficit in your budget? If so, make sure your savings accounts are optimized and in high yield savings accounts. The national average annual percentage yield (APY) on savings accounts is at 0.33 percent; however, online banks often offer a higher rate. I like using Investopedia’s list of the “Best High-Yield Savings” to compare the different product offers. If you struggle with savings, it’s time to evaluate your budget and find the best solutions with the fewest tax implications - this might be an in-depth look at investment accounts and cash value life insurance.
Finally, if you had a 401k with your previous employer, look into moving it to a self-directed IRA. Employers are often limited on the securities you can invest in and this will give you a much wider range of options. A simple call or submitting paperwork to your new custodian can help establish your account. Although, keep in mind, some firms will send the check directly to you and it is imperative you deposit the funds within 60 days to avoid major tax penalties.
Being laid off is plenty stressful but I’ve outlined a few steps above to help you get started. As a Master Registered Financial Consultant (MRFC®), I can assist you in analyzing your finances and implementing the right strategy to navigate unexpected life events. Take a moment to book an appointment with me to understand your options and make the best decision for your future.