Financial Planning After a Layoff: Important Steps to Take
Featuring AJ Flores, CFP®
FRESNO, Calif. (KFSN) — Layoffs and company restructuring can happen unexpectedly, even during periods when the broader economy appears stable. Whether caused by organizational changes, cost reductions, or shifts within an industry, losing a job can create both emotional and financial stress.
In a recent ABC30 Watching Your Wallet segment, AJ Flores, CFP®, Lead Financial Advisor at Portfolio Advisors Inc., shared several practical steps individuals can take to better prepare for — and navigate — periods of financial uncertainty.
Start With an Emergency Fund
One of the most important financial safety nets during a layoff is accessible emergency savings.
“The amount you have in emergency cash varies, but common wisdom is somewhere between three and six months,” AJ explained.
Having emergency reserves can help cover essential living expenses while allowing time to evaluate next steps without immediately relying on credit cards or withdrawing from long-term investments.
Building an emergency fund gradually over time can create valuable flexibility during unexpected transitions.
Review Severance and Benefits Carefully
If you are laid off, it is important to fully understand what benefits may still be available to you.
AJ encourages individuals to carefully review:
- Severance packages
- Health insurance options
- Retirement plan information
- Any continuation benefits offered through an employer
“You may still be eligible for some public programs in the months following being laid off,” AJ shared. “It’s important to understand your options for keeping that insurance or transferring it elsewhere.”
Healthcare coverage is often one of the biggest concerns after leaving an employer, especially for families who rely on employer-sponsored plans.
Don’t Forget About Old Retirement Accounts
Another common issue AJ highlighted is forgotten retirement accounts from previous employers.
“Some people have 401(k)s that they forget about that they leave behind,” AJ explained. “It’s just money out there that you’re leaving behind with a prior employer.”
In many cases, retirement accounts can be rolled into a new employer’s plan or another qualified retirement account. Taking care of those transfers while information and account access are still readily available can help simplify future financial planning.
Revisit Your Budget
Periods of uncertainty often create an opportunity to reassess spending habits and prioritize essential expenses.
AJ recommends focusing on:
- Necessary monthly expenses
- Discretionary spending
- Areas where temporary adjustments can be made
“That way, you are prepared,” AJ said. “Maybe you’ve already gotten used to living beneath your means and having an understanding of your discretionary expenses.”
Having clarity around cash flow can make it easier to navigate temporary changes in income while reducing unnecessary financial stress.
Apply for Available Resources Promptly
For California residents, unemployment benefits may be available through the California Employment Development Department.
AJ recommends acting quickly, as benefits can take time to process and begin.
Taking proactive steps early can help avoid delays and provide additional financial support during a transition period.
Preparing Before You Need To
While no one plans for a layoff, preparing ahead of time can make these situations more manageable.
Maintaining emergency savings, understanding your benefits, organizing retirement accounts, and building healthy financial habits all contribute to greater flexibility and resilience during uncertain periods.
At Portfolio Advisors Inc., we believe financial planning is not just about preparing for ideal situations — it’s also about preparing for life’s unexpected moments.
If you would like to review your financial plan or discuss strategies for building financial stability, AJ Flores, CFP®, and the team at Portfolio Advisors Inc. are here to help.
For more financial tips and planning resources, visit our Knowledge Center.
