Have you been laid off? Or considering retirement due to the economy?
This 7-Step Guide can help you decide your next move.
GOING THROUGH A LAYOFF OR PREPARING FOR RETIREMENT CAN BE A VERY STRESSFUL, OVERWHELMING, AND EMOTIONAL TIME.
If you've recently experienced a layoff amidst the current economic challenges, know that you're not alone. The uncertainty that comes with a layoff can be overwhelming, but there are seven steps you can take to navigate through this period and perhaps even turn it into an opportunity for growth. These steps will assist you in assessing whether you need to pursue another job opportunity or consider planning for retirement.
Where Do I Begin?
Step 1
KeeP Calm START A PLAN
Don't panic! Layoffs can be scary and the current economic downturn affects everyone.
With many employers closing their doors, you may find yourself at a crossroads. Consider if you're ready to retire or if you need to start looking for a new job.
Ask yourself, "Are you prepared to retire?" Or do you need to find a new job?
Step 2
determine living expenses
In the event of a layoff, it's important to gather information.
Instead of panicking, calculate your living expenses and determine the income required to sustain yourself for 6-9 months.
This will serve as your "baseline" and help you make informed decisions.
A quick method to determine this amount is by reviewing your bank statements.
Step 3
INVENTORY YOUR FINANCIAL ASSETS
Firstly, make a list of the resources you possess that can fulfill the minimum requirements mentioned in Step 2.
Your resources can be categorized into two types: Today and Tomorrow Money.
Today Money includes cash, savings, checking accounts and any severance received.
Tomorrow Money includes 401(k), investments, and assets like real estate.
Step 4
UNEMPLOYMENT BENEFITS
It's possible that you qualify for unemployment benefits.
Nevertheless, the benefits usually cover only 40% to 45% of your weekly earnings.
The duration of the benefits, which varies by state, ranges from 12 to 26 weeks.
Step 5
HEALTH INSURANCe (employer)
In case of job loss, health insurance may also be lost, but you may qualify for COBRA.
This program enables eligible employees and dependents to maintain coverage for 18 to 36 months, although the cost is typically higher.
If you experience qualifying event, such as job loss, income loss, or loss health insurance, you can apply for a health plan outside of open enrollment.
Step 6
HEALTH INSURANCe (private)
An increasing number of individuals wish to retire but desire to maintain their medical coverage.
Unfortunately, individual coverage can be costly for those under 65, until they become eligible for Medicare.
However, those who are 65 or older and qualify for Medicare can retire and begin receiving coverage.
While health insurance is a crucial factor, there are other considerations to keep in mind when contemplating retirement.
Step 7
PENSION & IRA DISTRIBUTIONS
Do you have a retirement plan that can be converted into a lump-sum payment or transferred to another fund?
Keep in mind that there may be limitations on when you can start receiving your pension and its earnings.
Choosing to withdraw a lump sum and transfer it to another may be more beneficial than waiting for future pension payments.
Additionally, there are several retirement distribution options with different tax implications.
Do you truly desire to return to work?
If you're facing a layoff, you can minimize the stress by identifying the optimal solution.
The uncertainty surrounding the situation can be a source of anxiety.
Once you've assessed your healthcare coverage and financial requirements, you can decide whether to seek new employment or retire.
However, there is no one-size-fits-all approach, and tax considerations may need to be factored in.
Click HERE to explore your alternatives.
What's Next?
Take action now! We have assisted numerous individuals in situations similar to yours and can aid you in creating a plan that aligns with your retirement objectives.
IF YOU FIND YOURSELF FACING A LAYOFF, START A CHAT WITH US OR SCHEDULE A COMPLIMENTARY CONSULTATION TO DISCUSS YOUR STRATEGY TODAY.
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