Life events · Job loss

Financial checklist after a job loss.

The first 30 days, in the order to do them. Educational only — not financial advice.

A layoff isn't a financial emergency on day one. It's a logistics problem that can become a financial emergency if you skip a deadline or pick the wrong option on a form. This page walks through the moves that have to happen in the first 30 days, and the ones that can wait until the dust settles.

Week 1 — the things with deadlines

1. File for unemployment, the day of. Each state has a different portal, but they all backdate only to your filing date. Do not wait for your final paycheck to clear. (Your state's portal: search "[state] unemployment file claim.")
2. Confirm your health insurance end date in writing. Ask HR: "What's the exact last day I'm covered on the company plan?" Usually it's the last day of the month you're terminated, but not always.
3. Get your severance agreement in writing before you sign. If you're being offered severance, do not sign it the day you get it. You're entitled to time to review (often 21–45 days depending on your age and whether a group is affected). Note any non-compete or release-of-claims language — a one-hour review by an employment attorney is worth the cost.
4. Download your pay stubs, W-2s, and benefits statements. You lose access to the employer portal immediately in most cases. Get everything before your laptop goes back.
5. List all your employer-sponsored accounts. 401(k), HSA, ESPP, FSA, life insurance, disability insurance. Each one needs a decision within the first 30–90 days.

Week 2 — the money math

1. Size your runway. Total cash in checking + HYSA, divided by your actual monthly essential expenses (rent/mortgage, groceries, utilities, insurance, minimum debt payments). That's your runway in months. Below 3 months = tight. Above 6 months = breathing room.
2. Cut only what you won't miss. Subscriptions you haven't used in 60 days. Gym memberships. Food delivery. Do not cut health insurance or disability insurance as a cost-savings move — that's a trap.
3. Pause automatic investment contributions temporarily. Roth IRA auto-transfers, brokerage auto-deposits. You can resume in 90 days. Do not touch the 401(k) balance itself yet.
4. Do not roll over the 401(k) yet. You have time. Many 401(k) plans have institutional-share-class funds you can't access in a retail IRA. Decide in month 2 or 3 after you have a new job (or clarity on what's next).

Week 3 — the health insurance decision

You have three options, and the math varies a lot by state and by family situation:

• COBRA. Continues your employer plan. Typically 2–3× what you paid as an employee because you're now paying the full premium (including the employer's portion). Good if you're mid-treatment or have a specialty provider locked in.
• Healthcare.gov marketplace plan. A layoff is a qualifying event — you get a 60-day special enrollment window. Subsidies are income-based, and your income is probably dropping. Most laid-off households qualify for substantial premium tax credits.
• Spouse's plan. If your spouse has coverage, a layoff is a qualifying event to join their plan mid-year.

Run the numbers on all three. A marketplace plan with premium tax credits is frequently cheaper than COBRA — sometimes by hundreds of dollars a month — and it's newly available because your income just changed.

Month 2 — the retirement account decision

Now you can think about the 401(k). Three options:

1. Leave it with your former employer. Usually allowed if the balance is over $5,000 (plan-specific). Fine for a year while you figure things out.
2. Roll to a Traditional IRA. More investment choices, lower fees at most custodians. But it enables a "pro-rata rule" trap if you later do a backdoor Roth.
3. Roll to your new employer's 401(k). Only if the new plan has good low-cost options. Check expense ratios first.

If the former 401(k) has a company stock position with large unrealized gains, search "Net Unrealized Appreciation (NUA)" before you roll anything — the tax treatment can be meaningfully better than a standard rollover.

What not to do

• Don't cash out the 401(k). You'll owe income tax plus a 10% early withdrawal penalty (if under 59½). It's the single most expensive move available to you right now.
• Don't take a 401(k) loan. If you had one already, it accelerates — you typically have 60 days to repay or it's treated as a distribution (with tax + penalty).
• Don't cancel term life insurance. Premiums don't move because you changed jobs; health history does. A policy you cancel today can cost 2–3× to rewrite when you're 5 years older.
• Don't dip into the Roth IRA. Contributions are withdrawable without penalty, but you can't put them back — you lose the contribution room forever.
• Don't make a big Roth conversion "while income is low." Tempting — and sometimes right — but it's advice-level analysis, not checklist-level. Talk to a tax pro if the opportunity is material.

When to get a human

If any of these apply, a fee-only fiduciary is worth the hour:

• You have $250K+ in retirement accounts and the 401(k) has company stock.
• You're 55 or older and the severance package includes a defined-benefit pension or ESPP payout.
• You're getting a non-trivial severance and want to know whether to take it as a lump sum or spread across two tax years.
• You're considering early retirement instead of job searching.

Find a fee-only advisor →

Park-the-cash vehicles

While you're between jobs, the cash you're holding should earn something. The three usual answers:

• High-yield savings account. 4.0%–4.2% APY currently (Bankrate). FDIC-insured. Withdraw anytime. Best for months 0–6.
• Short-term Treasury bills. State-tax exempt, backed by the US Treasury, 3-month yields tracking Fed funds. TreasuryDirect is free. Best if you know you won't touch the money for 3–6 months.
• Money market fund in a brokerage. Often the highest yield, daily liquidity, but not FDIC-insured (SIPC-covered to $500K). Best if you already have a brokerage open.

Run your numbers through the Refund Router → It's built for routing refund money, but the logic works for severance too.

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This page is educational only and does not constitute personalized financial, tax, legal, or investment advice. Your specific situation may change the right answer — especially on severance, health insurance elections, and 401(k) rollovers. Talk to a licensed professional before making final decisions.