The Pink Slip. It’s the dreaded official notification from your
employer that they no longer need your services. You’ll often hear the
corporate rumors flowing within your company about the impending layoffs, but
you’ll never suspect that you might be a person on the hit list. We never
imagine that we will be that person who gets called in for dismissal time. While
getting a pink slip is an awful feeling, it’s also a phase in your life where
you need to immediately get your financial act together. Here are my four smart money moves to make
when you get laid off from work.
1. When is your last paycheck? – It’s truly amazing to me how many
people don’t ask the very simple questions when they get the heave ho from
their employer. You will want to ask
specifically when your last day or work is and what the expectations are of you
over the next 30, 60, or 90 days. You
should ask about vacation time or PTO or other types of benefits that may or
may not be converted into money. See if
you are eligible for any type of severance and then gain a full understanding
when your last paycheck will be. Be very
careful that sometimes your employer may want you to sign a release of claims letter
to get some final monies and be sure to have an attorney review that letter
before you sign on the dotted line.
2. Time To See The Doctor – Health insurance is one of the biggest
items for consideration during a layoff.
You should make all doctor visits before you separate from service with
your current employer. You should get
the details of what happens to your health insurance plan if you get laid off.
Are you under COBRA or state continuation?
Do you understand what the cost of COBRA would be to your family? In many cases you will have to pay the full
premium which could be very costly to your family. Should you go to the Obamacare exchange? Can you switch to your spouse’s
insurance? These are important details
to sift through especially if you are half way through your yearly deductibles
and may be switching over to new insurance.
3. Which Insurance Policies
Are Portable? – If you have policies including life insurance or disability
insurance, you should call your benefits or human resources department and find
out which policies are portable. By portability, I mean having the ability to
transfer a group policy into an individual policy. Perhaps your health has changed since you
started with your employer? What will
the costs be for converting the policy? Can group coverages last while you are
receiving a severance check?
4. What Are The Options With Your
Retirement Plans? – Let’s say that you have programs such as stock options or
the company is contributing money into a retirement plan that may be important
to you in this arena. What will happen to all of those programs should you be
laid off? Will your stock options require
you exercise within 90 days? Can you
keep your company stock purchase plan?
How much of your 401(k) is vested?
Should you keep your 401(k) plan at work or move it to an IRA? What will
happen with your company deferred compensation plan if you are an executive? In many cases, you may not have remembered
whether you chose a lump sum, a five-year payout, or a ten-year payout which
could drastically affect your tax situation for the year.
5. Do You Get Job Hunting Support? – You should always be working
on having a fresh resume, even if you aren’t thinking about leaving your
employer. You never know what’s going to happen at your job and having a fresh
resume might help you get started quicker with your job search. Your employer may offer resume writing or job
outplacement services which will be free to you.
Remember, try not to get prior management upset. In the game of
business, it’s always going to be a nine inning game versus a one inning
game. You never know how a former
colleague or boss can help you or hurt you. You want to make sure that you
don’t upset former employers because the merry go round will come around
again. You never know what’s going to
hit you in the future. So just make sure that you leave on positive terms.
Try these four smart money moves when you get a pink slip from work. If you are struggling on your own, then it might be best to get a qualified financial advisor who specializes in job transitions so you can maximize every bit of your transition package from work. Don’t let a pink slip take your finances into the RED!
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
Request a FREE consultation: www.oxygenfinancial.net
Five Money Moves To Make When You Get The Pink Slip