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Top 6 things to focus on if you recently lost your job!

| June 25, 2020
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By: Mark H Woodward


It is an unfortunate truth that many have had their jobs eliminated as a direct result of COVID-19 and are now faced with making decisions that will have a big impact on their financial futures. Here is a list of some of the decisions to consider and in what order you should consider them based on time requirements:


1. Cash is king! If you were on a furlough, then you may already be filing unemployment claims to take advantage of the additional Federal funds. If not, you should consider filing soon as the additional Federal benefits are set to expire at the end of July unless Congress takes further action.
2. For health insurance, your termination will cause you to have to make a decision regarding your coverage almost immediately. Depending on your age and your family’s situation you may have several options for continued health insurance coverage.
3. Deferred Compensation Plans-Employment termination usually triggers an immediate distribution, even if that occurs over several years so you will need to consider the tax impacts of those distributions as well as the cash flow they provide for short-term planning.
4. Stock Options, Stock Grants, Restricted Stock Units-Your employment termination may trigger a defined period for you to exercise these or lose/forfeit them.
5. Severance-If you receive a severance, this should help with short-term cash flow and planning your next steps, but you should also consult your tax professional to understand the tax impact.
6. 401(k)/Pension-Dealing with your 401(k) account or potential pension plan benefit should not be an immediate concern for most. If you have an outstanding loan, then this may accelerate your timeline for action. Recent legislation gives you more flexibility with regards to loans, withdrawals or required minimum distributions (RMD). At some point you should consider whether rolling over your account into an IRA makes sense for you (investment flexibility and control or the ability to generate income are some of the benefits of an IRA) but you should also consider the pros and cons for leaving your funds.

If you have questions regarding your options and/or don’t quite fully understand your benefits and the decisions you need to make now versus the decisions you can wait on, please call me at (703) 888-5581 so I can help you figure out a game plan.

 

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. KANA Private Wealth Group is not affiliated with Kestra IS or Kestra AS.

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