Key Takeaways
A layoff can create both immediate financial challenges and an opportunity to reconsider your next career move. Reviewing cash flow, benefits, retirement accounts and long-term goals can help you make informed financial decisions during a job transition.
Last year, employers reported more than 21 million layoffs and discharges across the United States.
That number doesn’t make job loss any less difficult. But it does offer some perspective: Millions of workers experience a job transition each year.
So, what comes next?
The first instinct after a layoff may be to update a resume, search for openings and start interviewing. Getting back to work may be exactly what someone wants and needs.
But a layoff can also create something that isn’t always available during a busy career: time to think about what comes next.
Without the meetings, messages and daily demands of a previous job, there may be an opportunity to ask a bigger question: What do I really want to do next?
Maybe there’s an idea that has been in the back of your mind for years. Maybe there’s a skill or passion you’ve considered turning into a business. Or maybe you’ve simply wondered what working for yourself could look like.
A layoff doesn’t mean entrepreneurship is the right next step. But it could provide an opportunity to explore the possibility.
Before making a major career change, it’s important to consider what that decision could mean financially. Starting a business, for example, can affect cash flow, taxes, retirement savings, insurance and other long-term financial goals.
There are also more immediate financial questions that can come with a job transition, including:
- Health insurance considerations
- Severance and tax questions
- Short-term budgeting
- Retirement accounts
- Stock options and other employer benefits
Taking time to understand these decisions can help provide a clearer picture of the options available.
A layoff can bring plenty of uncertainty. It can also create space to think carefully about what you want your next chapter of work to look like.
Whether the next step is another job, a career change or exploring entrepreneurship, looking at the financial implications can help you move forward with a better understanding of your options.
If you’re navigating a job transition and aren’t sure how it could affect your broader financial plan, our team of financial advisors can help you evaluate your options. Schedule a call with our team to talk through your situation and determine what steps may make sense for your financial goals.
Financial Questions to Consider After a Job Loss
What should I do financially after a layoff?
After a layoff, review your health insurance, severance, cash flow, retirement accounts, stock options and other employer benefits. It can also be helpful to reassess your financial goals and determine how a period without employment income affects your overall financial plan.
Should I talk to a financial advisor after losing my job?
A financial advisor can help you evaluate the financial decisions that come with a job transition, including managing short-term cash flow, reviewing retirement accounts, evaluating severance and benefits, and adjusting your broader financial plan.
What should I do with my 401(k) after a layoff?
Your options may include leaving the money in your former employer’s plan, rolling it into an IRA or another employer plan, depending on your circumstances and available options. Consider the investment choices, fees, tax implication and other features before making a decision.
How can a playoff affect my financial plan?
A layoff can affect cash flow, taxes, insurance, retirement savings and other financial goals. The impact will depend on factors such as the length of unemployment, severance, available savings and your household’s overall financial situation.
Should I start a business after a layoff?
A layoff can provide an opportunity to explore entrepreneurship, but starting a business isn’t necessarily the right next step for everyone. Before making the transition, consider how it could affect your cash flow, taxes, insurance, retirement savings and other financial goals.
A financial advisor can help you evaluate the potential impact of starting a business and determine how it fits into your broader financial plan.
How a Financial Advisor Can Help During a Job Transition
A job transition can involve several financial decisions at once. A financial advisor can help you look at those decisions within the context of your complete financial picture.
At Bautis Financial, our team works with individuals and families on financial planning and investment management, including planning around retirement, taxes, insurance, cash flow and other financial goals. If you’re navigating a job transition, we can help you evaluate how the change may affect your financial plan and what adjustments may be appropriate.
Related Bautis Financial Resources
- Your 401(k) Options During or After a Job Transition
- Don’t Forget Your Old 401(k) When You Change Jobs
- Financial Planning Checklist: What to Consider During a Job Loss
- Financial Planning Checklist: What to Consider When Starting a New Job
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Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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