Getting laid off can be a lot of work

Few things in life are scarier than losing your job. Although many people work their whole lives without getting laid off, over a million people every month lose their jobs. Even if you don’t think you’re at risk, finance writer Tara Siegel Bernard of the New York Times says it’s wise to take a few steps, if only as a precaution.

1. Understand tax implications

“This is a big one, especially if you get a sizable separation package.” said Siegel Bernard, “If you get laid off toward the end of the year, and you collect a lump sum severance, you can easily get pushed into a much higher tax bracket. In order to minimize the impact you might want to increase your 401k savings.”

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2. Health insurance

Needing to visit a doctor during an in-between period worries many people needlessly, explained Siegel Bernard. “If your company offers health insurance, COBRA coverage kicks in right away. And you typically have 60 days to sign up. So even if you have to go to the doctor before you make a COBRA payment, you’re covered. COBRA coverage is retroactive back to the day you lost benefits.”

3. Visit financial planner

Make sure you’re visiting someone who puts your interests first, Siegel Bernard said, but a good financial planner can help you navigate a confusing landscape. “For example, a financial planner can help you with 401k money. A lot of people 55 and older don’t realize there may be ways to access 401k money, without penalty. That’s just one of many provisions that a professional will know about.”

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