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The labor market remains strong, but layoffs are on the rise.
This year, Peloton, Netflix, Shopify, Lyft and most recently Twitter announced significant job cuts. Meanwhile, executive outplacement firm Challenger, Gray & Christmas, reported this week that layoffs will rise even more, with October job cut announcements up 48% year-over-year.
Getting fired can be traumatic and cause a myriad of financial problems.
Taking certain steps sooner or later can reduce chaos and increase the chances of a positive next chapter, experts say.
1. File to collect unemployment benefits ASAP
People should apply for unemployment benefits as soon as possible after layoffs, said Andrew Stettner, senior fellow and director of workforce policy at the Century Foundation.
If you received unemployment benefits early in the pandemic and are facing unemployment again, you may still be eligible for more help.
Rules vary by state, but generally, as long as you’ve worked at least 15 weeks since you last received unemployment benefits, you’re eligible to open a new claim for partial payment, Stettner said. Most people must have worked for at least six months to be eligible to receive full benefits again.
If you’ve been employed for over a year, your benefits should come fairly quickly.
2. Consider health insurance options
Losing your job often means losing your health insurance.
After layoffs, “It may be overwhelming, but it’s important to seek coverage quickly,” said a spokesperson for the National Patient Advocacy Foundation, a nonprofit that helps individuals access and pay for medical care. Kaitlyn Donovan, the person in charge, said.
The first step is to talk to someone in your company’s human resources department to understand when your coverage technically ends.
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“There is no one-size-fits-all rule here. “In any case, we should start planning the transition to the new plan soon.”
Navigating health insurance situations on your own can be stressful and confusing.
There are resources you can ask for help. If you have a diagnosed condition such as cancer, lupus, or diabetes, you may be able to get support to plan and enroll with the National Patient Advocacy Foundation. You can also consult with
In general, newly laid-off and uninsured people can choose from three insurance coverage routes: COBRA, the Affordable Care Act subsidized marketplace, or public plans such as Medicaid and Medicare.
COBRA offers people who have left the company the option to continue their previous employer’s insurance plans, but they are usually very expensive. That’s because people have to keep paying part of the premiums they were responsible for when they worked, and the rest covered by their previous employers.
Medicaid typically has zero or low monthly premiums, and Marketplace plans are the cheapest yet for many thanks to relief legislation passed in the pandemic.
3. Protect your retirement savings
Many people save money for retirement through work. If he was given access to a 401(k) plan at the company where he was terminated, he must decide what to do with that account.
You might not want to do anything, said Rita Asaf, vice president of retirement leadership at Fidelity.
Most employers allow people to keep their plans after they retire, Asaf said. (However, she added that if the account has less than her $5,000 balance, it could be transferred to her personal retirement account.)
However, you cannot continue to contribute to the plan at the company you left. There may also be limits on the amount you can receive as a loan or withdraw from your account.
Always research rates and costs when choosing an IRA provider.
Rita Assaf
Vice President of Retirement Leadership at Fidelity
Another option is to rollover your account to an IRA, which you can open with a bank or brokerage firm. This allows you to keep saving. According to Asaf, if you’re under the age of 59½, you can also withdraw money from this account if you’re using it for your first home purchase or higher education expenses.
“Be sure to research when choosing an IRA provider as their rates and costs can actually vary,” Assaf said.
If you’re moving to another job soon, you may have the option of consolidating your old 401(k) plan with one of your new employers. He may feel more manageable if he only has one savings retirement account.
“It’s important to note that not all employers will accept rollovers from previous employers’ plans, so you should check with your new employer before making a decision,” Asaf said. has said.
What you don’t want to do is cash out your account if you can, she said. You may face penalties.
