It’s a story heard far too often: a company gets acquired and layoffs happen. Even after many years of loyalty, commitment, and skill, you too could be laid off. Unfortunately, situations like this are not uncommon.
Upon leaving the company, you may be provided with the typical types of compensation you’d expect from a layoff. You may receive a vacation payout, coaching, vested stock options, and severance. While the cash might grant you a modicum of control, it’s still very displacing.
So, what should be your first decision, post-layoff? For many, it’s a vacation! But these same people say in hindsight that they should not have prioritized taking a vacation so shortly after being laid off. Here are some actions you can take in order to afford you some control and confidence over your future career.
1. Get Your Financial Planning House in Order
If you’re not generating employment income, you should prioritize speaking to a financial planner to come up with a plan on how to make your money last as long as possible and minimize your tax liability. Come prepared with cash flow and tax projections. Your cash flow has changed as a result of not having employer salary and additional employer incentives. Your money can evaporate quickly if you’re not careful. Your goal should be to find another position in a similar or higher compensation range, but things don’t always go to plan. If you don’t take the step of adjusting your cash flow or tax planning then you may pay the price.
2. Paint a Total Picture of Your Investment Analysis and Strategy
Just rolling over a 401(k) isn’t enough, but on the other end, seeing a commission-based financial advisor can potentially cause more harm than good. That person may be focused primarily on assets that would generate income under his management, and may not be comprehensive enough. Seeing a fee-only, fiduciary financial advisor is often the best step to take.
3. Diversify Your Identity
After spending such a long period of time with a company, part of your identity becomes entangled with your career. After separating, you may feel like a part of your identity has become meaningless.
Tim Ferriss, author of The Four Hour Work Week, says that we must diversify our identity in order to be happy. This means that you don’t have to pigeonhole yourself into one identity, like “Joe, the business development professional”. It can also mean “Joe, the tennis player”, or “Joe, the mentor”. Faceting your identity in this way makes it less impactful if one thing were to change.
4. Focus on Your Value Proposition
Updating your resume only takes you so far. To find the next step in your career, it’s important to focus on your value proposition. What can you bring to a new employer? How can your skills provide a return on investment for a new employer? Focus on your passions, because accepting a job that you’re not passionate about can lead to failure for lack of engagement. It’s also important to network effectively with people in your field, but not having a well fitted value proposition can make the difference between being hired and not.
Roadmap for Success
The month following a layoff is critical to getting your financial life back on track. Take action towards identifying your financial issues, assessing your needs going forward, and analyzing your investments. Contact a CFP®, who will look at your whole financial picture and provide a roadmap for success.
Article source: Modera financial advisors in Boston
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