Losing a Job

Read your separation agreement carefully before signing

You are not required to sign immediately. Most agreements give you 21 days to consider (and 7 days to revoke after signing if you're over 40, under the ADEA). Have an employment attorney review it if severance is substantial or if you're waiving any rights.

File for unemployment insurance immediately

File the same week you lose your job. There is typically a waiting period of one week before benefits begin — the sooner you file, the sooner the clock starts. Benefits are based on your earnings history and vary by state.

Understand your severance package in detail

Clarify: how long severance lasts, whether it's paid as a lump sum or salary continuation, whether benefits continue during severance, and what conditions apply (non-disparagement, non-compete, non-solicitation).

Determine how long your health insurance continues

Employer-sponsored coverage typically ends on your last day or the last day of the month. Know your exact cutoff date so there's no gap in coverage.

Elect COBRA or find replacement health insurance within 60 days

You have 60 days from losing coverage to elect COBRA. Job loss also qualifies as a Special Enrollment Period for marketplace plans (healthcare.gov), which are often cheaper. Compare both before deciding.

Assess your immediate financial runway

Calculate how long your savings, severance, and unemployment benefits will last at your current burn rate. This number — your runway — drives every other decision. Know it by the end of week one.

Reduce discretionary spending immediately

Don't wait to see how the job search goes. Cut non-essential spending now. Subscriptions, dining out, and discretionary purchases all add up quickly when income has stopped. You can always restore spending later.

Contact your lenders if you anticipate difficulty making payments

Mortgage servicers, auto lenders, and credit card companies all have hardship programs — but they require you to contact them proactively. Many will defer payments, reduce interest, or restructure without affecting your credit if you call before you miss a payment.

Update your resume and LinkedIn profile

Refresh your resume with your most recent role and accomplishments. Update your LinkedIn to signal you are open to opportunities (without necessarily broadcasting your job loss). Request recommendations from former colleagues and managers while the relationships are fresh.

Contact your professional network immediately

The majority of jobs are filled through personal connections — not job boards. Reach out to former colleagues, managers, mentors, and professional contacts. Be specific about what you're looking for and how they can help.

Understand your 401(k) options

You can typically leave your 401(k) in your former employer's plan, roll it to an IRA, or roll it to a new employer's plan when you land a job. Never cash it out. Confirm whether your employer match was fully vested.

Investigate whether you qualify for any government assistance programs

Depending on income and family situation, you may qualify for SNAP (food assistance), Medicaid, or utility assistance programs. These are designed exactly for situations like this. There is no penalty for using them temporarily.

Build a structured job search routine

Treat the job search like a job. Set daily hours, track all applications and contacts, and measure activity weekly. A structured search produces results faster than a scattered one.

Target your search — don't apply to everything

Broad, unfocused applications produce low response rates. Identify 20–30 companies you want to work for, research them, and pursue targeted outreach alongside formal applications. Quality of applications matters more than volume.

Prepare for interviews with structured practice

The behavioral interview format ("tell me about a time when…") is standard. Prepare 6–8 strong examples from your career that demonstrate leadership, problem-solving, collaboration, and resilience. Practice out loud — not just in your head.

Consider contract or consulting work to generate income

Freelance or contract work in your field keeps income flowing, maintains your professional network, and fills the resume gap. It sometimes converts to full-time offers.

Track all job search expenses for potential tax deduction

Job search costs — resume services, career coaching, travel to interviews — may be deductible in some circumstances. Keep receipts and consult a CPA.

Negotiate the offer — don't accept the first number

The initial offer is rarely the best offer. Research market rates (Glassdoor, Levels.fyi, LinkedIn Salary, or industry surveys), know your target number, and ask. The worst they can say is no. Salary negotiation at the offer stage is expected.

Review the full compensation package, not just salary

Base salary is one component. Evaluate: bonus structure and targets, equity or stock options, 401(k) match and vesting schedule, health insurance quality and cost, PTO, remote flexibility, and any signing bonus. The complete package often matters more than the headline number.

Cancel COBRA or marketplace coverage when new benefits begin

Once your new employer's health insurance is active, cancel your bridge coverage to stop premium payments. Confirm the exact start date of new benefits — there is sometimes a waiting period of 30–90 days at a new employer.

Enroll in your new 401(k) and consider rolling over your old one

Enroll in your new employer's 401(k) immediately, especially if there's a match — that is free money. Roll your old employer's 401(k) to your new plan or an IRA once you're established.

File your taxes carefully in the year of job loss

You may have multiple W-2s, unemployment income, and severance to report. COBRA premiums paid out-of-pocket may be deductible if you itemize. A CPA can ensure you capture all available deductions in a complex year.