Laid Off? Consider these 4 Action Steps

Peter, very good to see you. Welcome back, everyone. This video is for everyone or anyone who has been laid off recently or who's afraid they might be laid off.

We have four action steps. As of April, about 60,000 workers have been laid off or fired, including thousands more at U.S. health agencies. With the markets rattled and a potential recession on the way, a lot of people are worried about their jobs right now.

Being laid off, of course, is terrible. Having an action plan can help. Before we get into the action steps though, Peter, this is a good time to remind everyone to shore up your emergency fund.

How much cash should we have on hand? Generally, the recommendation is three to six months. If you feel like your job may be in jeopardy, you may want to be closer to the six months or even pad that a little bit more, especially if you're a single income household. You want to be at the upper end of that, maybe six to nine months even because, unfortunately, when there are turbulences in the job market, it's not just your job. It is also harder to go out there and find a job. By the way, not just government agencies or health care agencies. I've talked to a number of people who feel like their job may be in jeopardy or are in potentially tariff impacted small businesses.

Any of those things, it really is kind of a nervous time. Now I know that this is no solace or condolence if it is your job, but in the grand scheme of things, 60,000 jobs is not huge, huge shifts in the larger unemployment numbers, but a lot of people are pretty, and I feel reasonably worried about their jobs right now. That is, again, probably no comfort if it is your job that this probably won't move the needle by large percentages with our national unemployment numbers.

All right. Well, speaking of somebody who's been laid off, sometimes it does put you in a better position, but of course taking action now can help you if and when that does happen. So let's get into those action steps, Peter. Number one, of course, is file for unemployment. Yeah. Unless you have a very immediate fallback plan B for your employment situation, this is probably your first step to continue that income coming in and just taking those steps and then understanding what it takes to continue to qualify as far as putting applications in and having activity. But this is probably, I think, kind of a blow to the pride and people don't want to do this, but unfortunately when you're backed into a corner, your options are what your options are, and this is one of the first steps you take.

Oh my gosh. Can I then just encourage people? We pay in for a reason.

I had no shame when I was filing for unemployment. No, I agree. I agree completely, but I've also talked firsthand with people who were in this situation or felt like, and there was this hesitancy. Well, I don't want to do this.

Well, I get that too, but that is the option and we do pay into it. All right. Number two, of course, update your resume. Good advice no matter where you feel or how confident you are about your job.

Yeah. I've talked with a number of people recently. In fact, I went into high schools and I had career conversations with high schoolers and I said, your resume is not a one and done kind of thing. It is an ongoing process. You keep your resume updated. Maybe it's that kind of thing that you do once a year around tax time or something like that.

Right. But, but keep it ongoing and up to date with your list of experiences. And then when you're applying for a position, that's when you take that longer resume and edit down the content for that specific position that you are applying for, make it as relevant as possible, but keep a running list because there's always those things that we forget.

Oh yeah, I did that for a while. Oh yeah, I had that kind of relevant experience that would be good resume builders, but might slip our mind at the time that we need to be thinking about that or remember it for this particular position where that experience was relevant. So again, keep it as a running tally of kind of your life's work and accomplishments and experiences.

And then when it it's time to, to use it, to pull it out, edit it down to make that content relevant for the position that you are applying for. Right, right. Of course, while you are still employed, it's a good time to ask about your severance, final paycheck or unpaid PTO. Make sure you bring up those unused PTO days and have an accurate count of how many you still have left so you can get the money added to your final paycheck. This is where Peter, I think it's important of course, to keep your own records at home, but check with HR as well to make sure you guys have the same numbers.

Yeah. And I guess, you know, just in phrasing how, how, how, how you position this question, don't make it seem like, Hey, I'm, I'm leaving this place tomorrow, right? If you want to keep your job, just make sure that you are asking about those records and those tallies in a way that indicates you are fully intending to keep this job unless you are feeling like your job is or have been told your job is being cut. And then you get the very specifics will give me the details on, on this part of my compensation package that I know I am entitled to. And yeah, I've seen situations where people had sick days and paid time off that amounted to, you know, six months up to several years worth of time.

Now this was, you know, state and government employees that had just basically never called in sick and never took vacations, but this could be a large amount of fallback for those that might be most impacted by exactly the, the, the subject that we're talking about here, which is shake up in, in some of these government positions. So, um, you know, be, be cognizant of your company's policies on these things. How many days do you get per year?

Do they carry over? If they carry over, is there a maximum limit, but the severance pay that sometimes is negotiable and the paid time off, just make sure that you're keeping track of that. And hopefully that is accurately reflected at some, some reference point like in your HR hub or, or on your pay stub or something like that. Next you say review your 401k. What does that mean exactly?

Yeah, well, I mean, I think this is kind of an ongoing thing as well, right? This is not something that you only do once when that 401k comes into question or when you are severed, uh, severed from service. Your 401k is a tool that should be monitored on an ongoing basis and should be rebalanced. Now, when you feel that you could be in jeopardy of, of not having that job anymore or, or have been told so, I think it's definitely a cue to go in and really assess the investments that are in that 401k, the portability of that 401k, the accessibility to that 401k. If you're 55 or older, there are ways that you can actually utilize some of that 401k without the 10% penalty. It's kind of the little known secret section of the tax code. It's called a 72 T nine times.

I would say 99 times out of 109 times out of 10. However you want to do the math. When you leave a job, you should take your 401k with you and generally also not roll it into the new employer's 401k. But there are some exceptions to that and you should sort of take, take a step back and assess because if you roll it out of that 401k, that 72 T ability to access it between 55 and 59 may, may not be there for you. So you've got to look at your individual set of circumstances to make choices on this. But as far as like when, when the economy is kind of in turbulence, when the job is uncertain, it also may be a time to back up and take a degree or two less of risk with the investments themselves.

And that's where you want, want to talk with your professional about that. Well, and that does bring us to our last point, which is of course, tap your support system. This is such a difficult time. And of course that should be family and friends, but it should also probably include a financial advisor.

Why is that? Hey, and, and, and coworkers and former coworkers, like again, in the career connections conversations I was having with these high schoolers, the one thing I told them was leverage your support system and your connections, the people that you know, can help you have a foot up into new or better or next opportunities. I am a member of several different financial advisor kind of group chat discussion forums. And I recently saw where a financial advisor was commenting his comment was make it make sense. And the comment from a potential client was we are going to hold off on our planning because our job might not be secure. And I get it that when your job is in question, your employment, your financial security and stability, that you think about holding off on making large scale changes, but that is absolutely the time to go speak with a financial advisor.

And I really felt this, this advisor's sediment there in, in posting this and airing it out to make it make sense. That is not the time to shy away from having conversations with a financial professional. That's the time to like dive in and get your fingernails dirty and dig into the dirt of your financial situation and make sure that your foundation is stable and secure as possible in the midst of what can be a chaotic turbulent kind of change of lifestyle. You've got to make sure that your, your boxes are checked and squared away and that you've got a plan to survive for what can be an unknown period of time.

Now, I will also say that there's a large percentage of the American population that did not necessarily retire on their own terms, a surprise retirement, unintended retirement, a reduction in force may have pushed them into retirement, not of their own accord or timeline. And so preparation for this is an ongoing process. It's why we don't begin planning for retirement the day before we retire.

That process should begin years, decades, even before you intend to retire. So you are in a perpetual state of preparedness and making progress toward that goal. Well, and if I can add one thing as well, when you are laid off everything, like I said, is so emotional, it's difficult to see things in black and white. And I feel strongly that HR is not always your friend and they're probably overwhelmed. But so having another advocate in your corner is always something that helps.

Yeah. The, the HR is at that point in time, they are, they are a cold unaffiliated third party. And by the way, they work for the company, not for you. So that, that they are, they're dealing not just with you when there's large scales reductions in force, they are dealing with all of the multitude of people with their questions. They are going to give you the shortest, curtest answer possible of just the facts and, and not be there as a, well, what about this?

What about that? What's your opinion on, how can I get the most out of those questions are not going to be answered by the HR person or resource. That is something to consult with your financial advisor, others in your, in your company or in your field that have, are going through the same thing. So like use your resources, use your connections, use your friends, use your coworkers, use your network and speak with a financial advisor certainly is, is going to be something that provides some insight and hopefully some confidence in what can be a very unconfident time.

Right. Well, Peter, if somebody would like to have that conversation with you either to get their ducks in a row, or if they have been laid off and they'd like to talk through how to make sure that they're making the right decisions during this emotional time, what's the best way to reach you? Give me a call at Rashaan Planning, 919-300-5886, 919-300-5886. And remember, you know, retirement is 30 years or so of unemployment that we intend on happening and, and want to be successful through. We've got to plan for that. We've got to plan very carefully. You know, when, when we see these potential layoffs or layoffs happening, we, we only want that to be as short a period of time as possible.

And yet still, it feels very, very tight and unnerving. We want retirement to be as long as possible. We've got to plan for that very carefully. So regardless of whether it's an intended or unintended unemployment, give me a call.

We can, we can help plan for that and, and get you in the best mental, emotional, psychological place possible, 919-300-5886 or online. It looks like richonplanning.com, Rashaanplanning.com. Great. Peter, thank you. Thank you, Erin.

Hey folks, Peter Rashaan here with Rashaan Planning. So glad that you are enjoying the podcast, Planning Matters Radio. You know, one of the tools that we've put out there that people really seem to appreciate and really are our finding of value is at 919retired.com. It is your retirement tax bill calculator. If you've got any kind of retirement account, your tax deferred 401k or IRA, this is the website.

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