Better Financial Health in 15 Minutes (or less!)

Empower Yourself with Layoff Strategies and Financial Insights

• Stacey Hyde

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Unlock the secrets to navigating layoffs and mastering financial planning with Stacey Hyde. Learn how to stay calm and informed in the face of job loss while gaining practical insights into severance packages, extended health coverage, and pension options. We'll delve into the intricacies of 401k withdrawals, exploring the tax implications and penalties that could impact your financial future. Discover alternative health coverage plans, ensuring you and your loved ones remain safeguarded during transitional phases. Dive into leveraging outplacement services and cutting-edge AI tools like ChatGPT to supercharge your job search and transform your resume into a job-winning document.

Equip yourself with essential skills to stay competitive in today's job market. Stacey highlights the importance of mastering tools like Microsoft Outlook and the Google Suite, essential skills often assessed by modern employers. Explore a wealth of free online resources for self-improvement and learn how to effectively organize your resume, expand your professional network, and secure critical health insurance. Establish a robust financial safety net while gaining the confidence to tackle any career challenge. Tune in for actionable advice and strategies designed to empower you on your career journey, ensuring resilience and readiness for future opportunities.

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis TN 38137. (901) 422-7526, This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Speaker 1:

Hi, I'm Stacey Hyde and I'm back for another episode of Better Financial Health in 15 Minutes or Less, and today I want to talk about something that I hope never happens to you, but it's becoming more and more frequent as large employers, right-size, downsize, and what that is is you become subject to a layoff, most of the time through no fault of your own, but because the company has decided that they need to reduce headcount or something along those lines, or they sell off a division and the people are not moving with them. If that has happened to you or someone close to you, the key thing to do is to not panic. You want to gather the information and see what is being offered to you. In many cases, they will extend how long you can keep your health coverage If you had an old-fashioned pension, sometimes they'll give you extra service on that If you were not vested, and that means that the money that the company put in is your money. If you're subject to any of these layoffs, in almost all cases you will then be vested in the employer contribution, so that's important to look at that.

Speaker 1:

You want to read the fine print there is usually. Usually you will be asked to sign something saying that you will not sue the company in order to get these severance packages. Also, you will often be given some number of weeks of pay. Oftentimes it's a week of pay for your service. Sometimes it can be more than that. So you really want to look at that closely and see how it's can be more than that. So you really want to look at that closely and see how it's going to be paid out. Is it going to continue to be paid out just like your regular payroll is? Is it going to be a lump sum? Can you choose? You know we're getting late in the year. It may be better for you to push some of that income into the next year if you don't already have another job lined up. So there's a couple of things that you've got to look at.

Speaker 1:

If you are losing your position and you provided health care for your family, you want to look at how are you going to replace that. If you're married, can the other spouse get coverage through their employer? November 1st is open enrollment on the exchange. Healthcaregov you could look at that. If you live in Tennessee, farm Bureau through UnitedHealthcare has a very good individual plan, but you do have to answer health questions, whereas healthcaregov you do not. But if you are healthy, oftentimes the coverage through UnitedHealthcare is more affordable than on the exchange, depending on your income. So those are some things to look at and you want to start looking sooner rather than later so you can be prepared and you have a seamless transition, because you don't want to leave yourself uncovered for any period of time. Hr from their benefits team and it has not arrived. Don't be like no, no, no, no, I don't see anything. Reach out to HR, ask them for that, get them to email it to you or follow up with their benefits firm to make sure you get that.

Speaker 1:

The other thing is your 401k. It becomes eligible to be rolled over. That may or may not be a good thing for you. What I would encourage you to do is resist the temptation to grab that money and pull it out of your 401. If you are under 59 1⁄2, you're still going to be subject to that 10% penalty if you take that money and spend it. However, if you are over 55, you'll still pay taxes on the money you withdraw, but you won't pay the penalty if you are 55 when you terminate from service. If you're younger than that, you're going to pay regular income tax plus a 10% penalty, which is pretty awful realistically, because the tax rate on that is 10% plus whatever your marginal tax bracket is. And the way you figure that out is look at what your adjusted gross income, your taxable income, on your last year's tax return. Add to it whatever, pull out $40,000 and that pushes you to the 22% bracket. So your marginal rate on that money is 22% plus 10%. So you're going to give up a third of your retirement savings in taxes.

Speaker 1:

The other thing that is really really going to hurt you is that money is no longer there to keep snowballing and growing for you. So that really really really needs to be a last resort. You do not want to pull your retirement funds out and in most cases you can leave the money there until you find another employment. Don't get in a hurry to roll it over or purchase an annuity or do something like that. Really take your time. That is kind of the last step, because you can leave it there. Certainly if you've got more than five thousand dollars in it, you can just let it sit there and chances are that's going to be your best bet until you figure out where your next employment step is going to be. But you do want to look to see how much money you're going to get in cash, put some of that money aside and oftentimes, if there's a large layoff like we just had announced in Memphis this week or in the last couple of weeks they will also provide outplacement assistance, which means that they will help you find a headhunter. They will have some resume help, they'll have networking groups.

Speaker 1:

But really you want to get out there and this would be a good time, if you've never tried it before, to try ChatGPT. You can upload your resume, pull off any personal identifiable information like your phone number and stuff like that, but put your resume up there and get ChatGPT to help you edit it to screen resumes. So if you can get yours to sort of be blessed and improved by the same artificial intelligence that's going to be scanning them, it'll help you get the right keywords in there, the right ways to phrase it, the right layouts that they're looking for and that can be the difference between getting a job quickly or spending several months looking and looking. So you really want to be proactive with that and that can really really help you do that. You just don't want to put your personal information out there, but putting just a basic resume and these jobs and this is what I did and these were my wins and this is how I closed deals, these are the projects I accomplished that kind of stuff it can really help you make that more polished, professional and help you beat the bots, as they say. So those are some key things to look at.

Speaker 1:

Also, I would encourage you to really look at your budget, since you've had some advance notice that this is coming. You want to be careful about running up credit card debt. Maybe postpone if you're looking at buying a new car. Maybe postpone things like that. That would be a big out-of-pocket cost or add to your monthly bills. You want to be a little more careful and considered until you go ahead and get the new job.

Speaker 1:

I will say in most cases that I've been around not all, of course something like this is a catalyst for people to try something, to take a risk, to maybe make a career pivot. It's not all negative. Sometimes it's the push we need to go, really chase our dreams and to be much happier. You know it's a safe job, it's a good employer, I have good benefits. I'd really like to do X, but you know Y is really comfortable. Well, now you're being kind of forced out.

Speaker 1:

Try it, you know, and see whether that is an option and whether you can do that successfully. And the best way to give yourself options is to minimize your monthly bills, minimize your spending, look for savings where you can and then start networking. Talk to your friends, talk to your coworkers, talk to people at church, talk to people that you run across in your daily life and see what opportunities might be out there. I think you'll be pleasantly surprised. It's not as crazy as it was as far as hiring people to look people as it was right, coming right out of COVID. But there are still a lot of good employers looking for smart people that have a skill set, and so you want to do that.

Speaker 1:

If you're not used to using Microsoft Outlook or the Google Suite, you may want to. You know sort of polish, some of those skills in case an employer wants to test you on those. And there are all kinds of free tools out there free learning that you can do it on your own. So I know it can be overwhelming, it can feel like a lot of pressure, but spend your time getting that resume in order, networking, lining up your health insurance and building that rainy day fund. That is really going to be your best bet to help you move forward. Thanks for tuning in. This has been another episode of Better Financial Health in 15 Minutes or Less.