Return to flip book view

Layoff survival guide

Page 1

10 Step Layoff Survival Guide Have you been laid off close to retirement ________ These 10 steps can help you decide your next move

Page 2

GOING THROUGH A LAYOFF CAN BE A STRESSFUL AND EMOTIONAL TIME ADD THE STRESS OF A GLOBAL PANDEMIC AND IT CAN FEEL DOWNRIGHT OVERWHELMING ________ If you ve been laid off you re not alone Shelter at home orders stemming from the COVID 19 pandemic created panic for businesses across the country forcing many to shut their doors and lay off workers In fact for the week ending March 28 2020 a record breaking 6 6 million Americans applied for unemployment benefits caused by the virtual shutdown of our nation 1 The previous record just under 700 000 claims filed in a single week in October 1982 While the country copes with the unprecedented effects of COVID 19 unemployment is projected to remain high for the next several years In April 2020 the unemployment rate hit 14 7 Federal Reserve Chairman Jerome Powell predicted unemployment numbers will remain above precoronavirus levels through at least 2022 While the uncertainty of a layoff can feel like you ve suddenly been saddled with an enormous burden you can take measures that could help reduce stress and get you back on course And if you re close enough to retirement you might even be able to say goodbye to the working world and enjoy an early retirement So before you let the stresses of the COVID 19 shockwaves get you down consider the 10 steps in this guide to help you survive a layoff They can help you determine if you need to find another job or if you can take this scary situation and turn it into a blessing in disguise

Page 3

STEP 03 STEP 01 KEEP CALM AND TAKE IT ONE STEP AT A TIME Whatever you do don t freak out A layoff can be scary but you have options Leave your current job with grace and respect your employer Realize that your former boss is also having a hard time with this decision From bigbox companies all the way down to small momand pop shops no business seems to be immune from the effects of the COVID 19 pandemic Many will be forced to close their doors forever as a result of these difficult economic conditions Anything you can do to make sure you re leaving on good terms is always a sound idea especially if your former business is able to reopen its doors and you wish to be rehired STEP 02 DETERMINE YOUR LIVING EXPENSES When a layoff strikes you need to know the facts Before you start believing that the world as you know it has ended simply figure out how much income you need to survive for a while Very few people really know how much they spend each month Once you identify the income you need to survive you can establish a useful baseline Begin by gathering all of your financial information This baseline will help you determine if you need to land another job or if you even need to bother CREATE AN INVENTORY OF YOUR RESOURCES Next create an inventory of the assets you have available to help you meet your baseline expenses Make sure to include savings checking 401 k all other investment accounts and any additional assets such as real estate or royalties Keep in mind that through the CARES Act economic relief plan you can withdraw up to 100 000 out of an IRA or workplace retirement plan in 2020 without the usual 10 penalty if you a spouse or a dependent tested positive for COVID 19 or experienced a variety of other negative economic consequences related to the pandemic such as unemployment STEP 04 ADD IN SEVERANCE PAY Severance pay is not mandatory in the U S and many employers do not offer such compensation Severance pay is usually outlined in an employment contract if you have one Severance packages usually include compensation equal to a stipulated length of service typically measured in weeks or months This payment could potentially provide depending on your circumstances six to 12 months of income to meet baseline expenses while you figure out your next move If you receive a severance package this can be a valuable time to make decisions about what kind of transition you want to make Unfortunately if your former company closes severance payments may never arrive

Page 4

STEP 05 UNDERSTAND HOW UNEMPLOYMENT BENEFITS WORK You may be eligible for unemployment benefits if you lose your job by no fault of your own such as through a layoff The amount that workers can receive from unemployment insurance programs depends on the state in which you worked On average unemployment benefits will replace roughly 40 to 45 of your weekly income The maximum number of weeks you can receive payments also depends on your state with the range varying from 12 weeks to 26 weeks Under the CARES Act individuals who qualify for Pandemic Unemployment Assistance PUA will also receive an extra 600 per week in addition to their state benefit until July 31 2020 Visit https www careeronestop org WorkerReEmployment Unemployment Benefits how do i apply aspx for more information on how to file unemployment benefits STEP 06 LEARN ABOUT YOUR HEALTH INSURANCE OPTIONS If you are laid off you will likely lose your health insurance You may be eligible for COBRA benefits COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act which provides eligible employees and their dependents the option of continued health insurance coverage following the loss of a job COBRA coverage extends for a limited period of 18 or 36 months depending upon various circumstances The cost of COBRA coverage is usually high because you ll be responsible for the entire cost of the insurance employers usually pay a considerable portion of the premiums while you re employed However through the CARES Act those who have lost health insurance due to job loss during the 2020 coronavirus pandemic will qualify for a special enrollment period available through the federal health care exchange website www healthcare gov

Page 5

This will give you 60 days to enroll possibly allowing you to find a cheaper health insurance option We see people in the office every week who could retire were it not for the need to keep medical coverage If your company plan isn t providing any continuing coverage health insurance coverage can be expensive during the gap in time until you are eligible to receive Medicare at age 65 Once you determine different levels of income benefits based on age another issue to consider is that you may only need to pull money from savings for a few years If you know your baseline income needs then finding the best solution is much simpler Knowing the best solution tremendously lowers the stress of a layoff considering much of the stress stems from unknown or undetermined variables STEP 07 STEP GET A NEW SOCIAL SECURITY ESTIMATE If you re in your 60s we suggest you get an update from the Social Security Administration about your potential retirement benefits Most people begin taking Social Security benefits at age 62 This is often the wrong decision The difference between taking benefits at age 62 or 66 is an additional 25 more income If you wait until age 70 you can receive 32 more than at age 66 Too many people make the decision based on one variable How many years of income later will it take to make up for starting benefits at age 62 Instead comprehensive planning can help you make an efficient overall decision 08 CONSIDER A LUMP SUM PAYMENT Do you have a pension that you can roll over or take as a lump sum payment Make sure to note when you can start receiving your pension and the income it will provide Although you may have already considered this in your baseline inventory it s noteworthy that your pension could be taken as a lump sum now through a rollover to an IRA Instead of waiting a few years to receive a future pension the lump sum may provide more benefit if rolled over and accessible Unfortunately there s not a one size fits all standard solution and there may be tax implications to consider Obtaining a professional opinion on this issue is highly recommended __ On average unemployment benefits will only replace roughly 40 to 45 of your weekly income

Page 6

10 Step Layoff Survival Guide Have you been laid off close to retirement ________ These 10 steps can help you decide your next move

Page 7

We can help If you find yourself facing a layoff give us a call to talk through your strategy today ____________ We ll help you create a written income strategy to determine how far off you are from retirement or if you re closer than you think 1 Carmen Reinicke Business Insider April 2 2020 US jobless claims skyrocket to 6 6 million doubling last week s record as coronavirus layoffs persist https www businessinsider com us weekly jobless claims unemployment filings record labormarket coronavirus 2020 4 Accessed May 20 2020 2 Jeff Cox CNBC com March 26 2020 Jobless claims soar past 3 million to record high https www cnbc com 2020 03 26 weekly jobless claims html Accessed June 22 2020 3 Megan Henney FoxBusiness com June 10 2020 Fed s Powell warns significant number of Americans could remain unemployed during coronavirus recovery https www foxbusiness com economy feds powell warns significant number ofamericans could remain unemployed during coronavirus recovery Accessed June 22 2020 4 Vanguard April 24 2020 What the CARES Act means for you https investornews vanguard what the cares act meansfor you Accessed May 20 2020 5 FileUnemployment org April 30 2020 Unemployment Benefits Comparison by State https fileunemployment org unemployment benefits unemployment benefits comparison by state Accessed May 20 2020 6 Tami Luhby CNN com April 10 2020 Extra 600 unemployment benefits will start flowing as early as this week for a lucky few https www cnn com 2020 04 07 politics unemployment benefits cares act covid pandemic Accessed May 13 2020 7 Kristin McKenna Forbes May 19 2019 Retire Early With Health Insurance Closing The Coverage Gap https www forbes com sites kristinmcfarland 2019 05 19 retire early with health insurance closing the coverage gap Accessed May 13 2020 8 Amy Fontinelle Nov 24 2019 Investopedia com When to Take Social Security The Complete Guide https www investopedia com retirement when take social security complete guide Accessed May 13 2020

Page 8

Prepared on behalf of Our Locations Corporate Office 14155 N 83rd Ave Suite 144 Peoria AZ 85381 Phone 623 974 0300 Fax 623 974 0330 Tempe Office 600 E Rio Salado Pkwy Suite 102 Tempe AZ 85281 Phone 480 912 4500 fullertonfp com Fullerton Financial Planning FFP is an independent financial services firm and uses a variety of different investment methods Investing involves risk including the potential loss of principal By contacting FFP you may be provided strategies that utilize insurance products those guarantees are backed by the financial strength and claims paying ability of the issuing insurance company Investment advisory services are offered through Kingdom Financial Group LLC KFG an SEC Registered Investment Advisor KFG maintains a co advisory relationship with AE Wealth Management Neither the firm nor its agents provide tax or legal advice The information contained is for educational purposes only and does not intend to make an offer or solicitation None of the information contained on this document shall constitute an offer to sell or solicit any offer to buy a security or any insurance product 5 20 1187806C