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5 steps to consider after a layoff

Key takeaways

  • Make the most of employer benefits.
  • File for unemployment benefits.
  • Find health care coverage.
  • Make a plan for your workplace retirement account.

Losing a job stinks. It can be terrifying, disorienting, and demoralizing.

"It's important to acknowledge that even if you saw it coming, it's incredibly shocking to experience this kind of change so quickly," says Meredith Stoddard, experience lead, Life Events Planning at Fidelity Investments. "For many people, their identities are tied up in their work. Talking about getting laid off can be really hard to do at first, but it is immensely helpful in coming to terms with what happened."

In the immediate aftermath of being let go, you may be reeling. Once you've gotten your bearings, consider these steps for what to do after a layoff.

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1. Make the most of employer benefits

Ask your human resources representative, what (if any) benefits you are entitled to after your termination date.

Find out if you have any unused vacation days or paid time off that will be in your final paycheck. Your employer may also provide career counseling, resume help, or other outplacement services to help you find a new job.

"Some companies do provide job placement assistance and resume help as part of their layoff packages. If this is the case with you, take advantage of these resources even if you don't feel ready," Stoddard says.

Before the dust settles, it can also make sense to ask for written references from your boss and/or coworkers. That can help confirm your skills and character in the workplace as you search for a new job.

2. File for unemployment benefits

To receive unemployment insurance benefits, file a claim with the unemployment insurance program in the state where you worked.

Requirements to qualify for unemployment benefits include:

  • You must be physically able to work—not disabled or collecting disability benefits.
  • You must be actively looking for a job.
  • You must have left your prior job involuntarily, without cause, and in good standing.
  • If you've received unemployment benefits within the 6 months prior to filing, your benefits may be reduced.

3. Find health care coverage

If you've lost your job, you can typically keep your employer health plan for up to 18 months, under a federal program known as COBRA, but you pay the entire premium. Ask your human resources contact if your employer is subsidizing COBRA coverage for a period of time. As well, it can make sense to ask how long you and your dependents (qualified beneficiaries) can stay on COBRA. You and your dependents may qualify for extensions beyond the typical 18 months depending on the circumstances. The enrollment period for COBRA is at least 60 days from when you are furnished the election notice or the date you would lose health coverage—whichever is later. If you’re over age 65, it’s a good idea to learn how COBRA will work with Medicare to avoid potential gaps in coverage. Visit for more information.

If you have a health savings account, you can use those funds to pay for COBRA premiums and a broad range of qualified medical expenses like vaccinations, chiropractic services, and diabetes testing supplies.

Of course, not everyone gets health care coverage through their employer but a layoff may impact your ability to afford insurance. If COBRA isn't available to you, you may qualify for special enrollment through the Health Insurance Marketplace. The Affordable Care Act does allow for exceptions to the enrollment window for qualifying life events, like losing a job.

Finally, you may be able to buy a private health plan from an insurance company outside of the Marketplace. Private health insurance is generally expensive and may not provide enough coverage. Also subsidies are not available on private plans.

4. Gather resources to help in the search for your next job

"Take a few moments (or days or weeks) to assess what is important to you and what you're looking for in your next job as well as how your skill sets might align with where you'd like to go. If you don't have unemployment or severance, consider temporary work to fill the financial gap in the meantime," Stoddard suggests.

Before too much time has passed, be sure to document some of your key accomplishments from the job you've left as your memory could fade. "Be sure to update your resume and LinkedIn profile too," Stoddard says.

Don't be afraid to tell people you're looking for work. Consider leveraging friends, family, and your education and career networks to help you get the word out and find potential opportunities.

5. Make a plan for your workplace retirement account

The good news is that you have options for what to do with your retirement account. You need to confirm the terms of your plan but most companies allow past participants to keep their retirement savings in the plan after they've left. One exception: If you have between $1,000 and $7,000 (up from $5,000 in 2023) in the plan, the money may be automatically sent to you (or sent to an IRA for you). If your balance is under $1,000, you may be given a check. If that happens, you have 60 days to deposit the money into an IRA or another workplace savings plan in order to keep your savings tax-deferred.

Read Viewpoints on Considerations for an old 401(k)

Important note: If you hold appreciated company stock in your workplace savings account, consider the potential impact of net unrealized appreciation (NUA) before choosing between staying in the plan, taking the stock in kind, or rolling over the stock to an IRA. Rolling over the stock to an IRA will eliminate any NUA. Consult an attorney or tax professional regarding your specific situation.

Spend wisely and bide your time

Even with bright prospects for the future, it obviously makes sense to take a cautious approach to spending and saving after you've been laid off. Consider temporarily trimming nonessential expenses to help preserve the cash you have. With any luck, the break from gainful employment will be short-lived and you'll be back at it in no time.

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