What to do if downsized?
By Justin Bolmgren
It’s been announced and “Downsizing” is ringing in your ears. Whether it is pending layoff, forced retirement, some later inconvenient restructuring or lateral move; all you know it’s not good for you. What to do from here can be daunting.
A few points from our advisors who have helped hundreds of people through this situation:
Take time to clear your head
Opportunities to move within the company may be available. Connections may be able to help. Job hunting today takes sharp skills and being tactful and showing insight will prevail. Further, a layoff might be one of life’s most stressful events. Clearing our heads will help us think and move more clearly.
Don't become accustomed to an ideal lifestyle
Create a budget, best and worst case. Like a corporate income statement, we all have fixed expenses and variable. Be prepared to reduce variable expenses, if possible, and eliminate non-essential fixed expenses. Many expenses such as cell phone, cable, subscriptions, food and entertainment can be easily reduced…even eliminated if you set a goal of at least 10%.
Take an inventory of available cash
What access to retirement accounts, cash or home equity do you have? Having the financial resources to be choosy in your job hunt will help in the long run. Because “bills are coming”, many take the first job that comes their way after a layoff. In the end, pay wasn’t great or working conditions were less than ideal, etc. Patiently evaluating several opportunities takes the ability to tap into reserves while you are waiting. Be careful to tap into the right resources first. Accessing cash has little consequences but some accounts like stock accounts, annuities and retirement accounts may have fees, commissions, or penalties to consider first.
Moving your retirement accounts
Once you have found a new employer, they may allow for you to rollover over an old 401k plan to their plan. Even if not, you have the option of rolling that old plan over to an IRA. Leaving old 401k plans behind often get neglected. Take the time to consider your options and not let this layoff setback de-rail your retirement plans.