Facing A Layoff

Few events create as much financial uncertainty as a potential layoff. Even high earners and long tenured professionals can feel unsettled when job security suddenly comes into question. While you cannot always control the timing or outcome, you can control how prepared you are and how thoughtfully you respond.

If you believe a layoff may be coming, or if you have already received notice, the steps you take in the first weeks can make a meaningful difference to your financial stability and long-term plan.

Start by stabilizing your cash flow

Your first priority is liquidity. Cash buys time, flexibility, and peace of mind.

Take an inventory of how much cash you have available across checking, savings, and money market accounts. Then compare that to your monthly spending. Be honest about what is essential versus discretionary. Housing, insurance, utilities, food, and healthcare come first. Travel, dining out, and large purchases can wait.

If you have variable income or bonuses that were expected later in the year, remove them from your short-term assumptions. Planning conservatively helps avoid stress and poor decisions later.

A common rule of thumb is to have several months of essential expenses in readily accessible cash. The right amount depends on your role, industry, and how quickly you expect to find new employment.

Understand your severance and benefits in detail

Severance packages often include more than just a final paycheck. They may include continued health coverage, retirement plan options, stock compensation details, or restrictions tied to non-compete or non-solicitation agreements.

Review the documents carefully. Pay attention to:

• How long severance payments last and how they are taxed
• When health insurance ends and whether COBRA is available
• Deadlines for exercising stock options or restricted shares
• What happens to retirement plan contributions and matching

This is an area where mistakes can be costly. Decisions around benefits and equity compensation often have tax and planning implications that extend well beyond the layoff period.

Be thoughtful before tapping retirement accounts

It can be tempting to view retirement accounts as a financial backstop. In most cases, accessing them early should be a last resort.

Withdrawals may trigger taxes and penalties, and they permanently reduce the assets working toward your long-term goals. Even loans from retirement plans can create problems if employment ends sooner than expected.

Before making any moves, explore alternatives such as adjusting spending, using taxable savings, or coordinating the timing of severance payments and unemployment benefits.

Reevaluate insurance and risk exposure

A layoff often changes how risks show up in your life. Health insurance is usually the most immediate concern, but it is not the only one.

If you carry life or disability insurance through your employer, confirm what happens when employment ends. Some policies can be converted or replaced, others simply stop.

This is also a good time to review deductibles, coverage limits, and beneficiaries. When income becomes uncertain, protecting against large, unexpected expenses becomes even more important.

Avoid reactive investment decisions

Market volatility combined with employment uncertainty can be emotionally challenging. Selling investments or making large portfolio changes during a stressful period often leads to regret later.

Your investment strategy should reflect your long-term goals, not short-term headlines. If cash needs are increasing, it may make sense to rebalance or raise liquidity in a measured way. That is very different from abandoning a plan entirely.

A clear framework helps separate what needs to change now from what should remain intact.

Use this moment to realign your broader plan

While no one welcomes a layoff, it can create space to reassess priorities. Some people use the transition to shift roles, reduce stress, or move closer to retirement than originally planned.

This is where thoughtful planning adds real value. Coordinating cash flow, investments, taxes, insurance, and long-term goals creates clarity when things feel uncertain.

The goal is not just to get through the next few months, but to make decisions that support where you want to be several years from now.

A steady hand matters most during transitions

Periods of change often reveal whether your financial plan is truly built for real life. Having an experienced advisor to help you think through tradeoffs, timing, and priorities can bring confidence when emotions are running high.

If you are facing a possible layoff or navigating one already, this is not the time for guesswork. It is the time for clear thinking, careful planning, and measured action.

If you would like to talk through your situation and understand your options, a conversation can help bring structure and perspective when you need it most.