Layoff Financial Checklist for the First 30 Days

The meeting was short, the HR packet was thick, and now you are sitting at your kitchen table with a severance agreement, a laptop return label, and a lot of questions. Whether the layoff was a surprise or you saw the restructuring coming, the first 30 days set the tone for everything that follows. This layoff financial checklist walks through what to do, in order, so you can make calm decisions instead of rushed ones.

High earners often assume a layoff is mostly an emotional event and the money will sort itself out. It will not. Severance, health coverage, unvested equity, retirement accounts, and taxes all have deadlines, and some of them fall inside the first two months. Missing one can cost far more than the lost paycheck.

The good news is that the list is finite. Work through it in the order below and you will have covered the decisions that matter most. Everything here is educational rather than individualized advice, so adapt it with your own advisor, attorney, or tax professional.

Days 1 to 3: Gather the Paperwork and the Numbers

The first three days are about information, not action. Collect every document the company gave you, pull your last few pay stubs, and log in to your benefits portal while you still can. Access to internal systems often ends quickly, so download what you need now.

Make a simple inventory: your final pay date, accrued vacation payout, severance amount and payment schedule, the date your health coverage ends, the vesting status of any equity, and the balance of any 401(k) loan. Put it all on one page. This page becomes the foundation of your cash flow plan.

Read the severance agreement twice before you sign

Severance is almost always paid in exchange for a release of claims, and the agreement may include non-compete, non-solicit, and non-disparagement clauses. If you are over 40, federal law generally gives you at least 21 days to consider the agreement and 7 days to revoke after signing. Use that time.

Common points that can be negotiated include the number of weeks of pay, continued health coverage or a COBRA subsidy, outplacement services, the treatment of unvested equity, the effective termination date, and the language of the reference you will receive. Employment attorneys often review these agreements for a flat fee, and for a six-figure package that review usually pays for itself.

Confirm your final paycheck and unused PTO

Georgia does not require employers to pay out unused vacation unless company policy says so, which makes the handbook worth reading. Confirm the final paycheck date, any earned but unpaid bonus, and expense reimbursements still owed. Get the answers from HR in writing.

Health Insurance Decisions in the First 60 Days

Losing employer coverage is a qualifying life event, which opens two doors at once. You can elect COBRA and continue your current plan, or you can enroll in a marketplace plan through healthcare.gov during a 60-day special enrollment period. Either way, the clock starts when your coverage ends, not when you were notified.

For a fuller comparison of the options, read our guide to health insurance between jobs. The short version is below.

COBRA: same plan, full price

COBRA lets you keep your exact plan for up to 18 months, but you pay the full premium plus up to a 2 percent administrative fee. For a family plan that can run well over $2,000 a month. The advantage is continuity: same doctors, same deductible progress, no new network to learn. You have 60 days to elect, and coverage is retroactive to the day your employer plan ended, so many people wait to elect until they know whether they will need care.

Marketplace and a spouse's plan

A marketplace plan is often cheaper, and if your household income for the year drops enough, premium tax credits can lower the cost further. Note that credits are based on your projected annual income, including the months you worked and any severance, so estimate carefully. If your spouse has employer coverage, their plan usually allows a mid-year enrollment within 30 days of your loss of coverage. That 30-day window is shorter than the COBRA and marketplace windows, so check it first.

Build a Six-Month Cash Flow Plan in Week One

Most professional searches at senior levels take three to six months, and longer in a slow hiring market. Plan for six months even if you expect three. Write down every source of cash you can reach without penalty and every expense that will continue, then look at the gap.

If you kept an emergency fund, this is what it was for. Our article on how much emergency fund you need explains why high earners often need a larger reserve than the standard three months, and a layoff is the moment that logic becomes real.

• Cash you can reach now: checking, savings, money market funds, and any taxable brokerage account.
• Cash arriving soon: severance installments, final paycheck, PTO payout, expense reimbursements, and unemployment benefits.
• Fixed expenses: mortgage or rent, insurance, debt payments, childcare, and tuition.
• Flexible expenses: dining, travel, subscriptions, and anything that can pause for a quarter.

File for unemployment benefits, even if it feels unnecessary

Many high earners skip unemployment because the weekly benefit looks small next to their old salary. File anyway. Georgia's weekly maximum is modest, but over several months it covers real bills, and you paid into the system. Severance may delay or reduce benefits depending on how it is structured, so report it accurately. Benefits are taxable at the federal level, and you can request withholding. The U.S. Department of Labor explains how state programs work and links to each state's agency.

Decide what to cut and what to keep

Cutting everything at once rarely lasts. Instead, pause the expenses that are easiest to restart later, and protect the ones tied to your search: professional memberships, a reliable phone and internet connection, and reasonable networking costs. Keep paying insurance premiums on time. A lapsed disability or life policy during a job gap is a risk that is not worth the small savings.

What to Do With Your 401(k) and Equity Compensation

Retirement accounts and equity are where laid-off employees lose the most money through haste. The rules are not complicated, but the deadlines are firm and the penalties are large.

Your 401(k) options

You generally have four choices: leave the money in the old plan, roll it to an IRA, roll it to a new employer's plan later, or cash it out. Cashing out triggers ordinary income tax plus a 10 percent penalty if you are under 59 and a half, and it removes decades of tax-deferred growth. For almost everyone reading this, it is the wrong answer. The IRS explains the rollover rules and the 60-day deadline for indirect rollovers at irs.gov.

There is no rush to roll over in the first 30 days. Leaving the balance in the old plan while you search is fine, provided the balance is above the plan's small-balance cash-out threshold. If you are 55 or older in the year you separated, keeping money in the plan preserves penalty-free access under the age-55 rule, which a rollover to an IRA would give up. For other common errors, see 401(k) mistakes high earners make.

Outstanding 401(k) loans

An unpaid 401(k) loan becomes a plan loan offset when you leave. You have until your tax filing deadline for that year, including extensions, to deposit the offset amount into an IRA and avoid taxes and penalties. Confirm your plan's exact rule, because some plans still require faster repayment.

Unvested equity and deferred compensation

Unvested RSUs and options usually forfeit on termination unless the severance agreement says otherwise, which is why accelerated vesting is worth raising in negotiation. Vested options often carry a post-termination exercise window, commonly 90 days, and the cash and tax cost of exercising can be significant. Nonqualified deferred compensation typically pays out on a schedule triggered by separation, and that payout is taxable income you cannot postpone.

Taxes After a Layoff

Severance is treated as supplemental wages, so employers withhold federal income tax at a flat rate on lump-sum payments rather than at your normal bracket. For a large package that flat rate may be lower than what you will actually owe, and for a mid-year layoff it may be higher. Either way, run a projection before year end.

A partial year of income can drop you into a lower bracket, and that creates opportunities. A Roth conversion of part of your old 401(k) or IRA can be done at a lower rate than you would face in a full working year. The same logic applies to realizing long-term gains in a taxable account. These are decisions for a tax professional or advisor to model, not guesses, because premium tax credits and other thresholds interact with your income. If later income comes from consulting or contract work, you may also owe quarterly estimated payments.

Protect the Plan: Insurance, Debt, and Credit

Group life and disability coverage end when employment ends. Some group life policies can be converted to individual coverage within 31 days, usually at higher premiums, so check whether you have adequate individual coverage first. An individual disability policy that follows you between jobs is often the stronger foundation.

On debt, call lenders before you miss a payment rather than after. Mortgage servicers, auto lenders, and student loan servicers all have hardship options that are easier to access early. Federal student loan borrowers can look into income-driven repayment recalculation or forbearance through studentaid.gov. Avoid new credit applications during the search unless they are necessary, and keep utilization low so your credit score stays strong.

Days 15 to 30: Turn the Layoff Financial Checklist Into a Rhythm

By mid-month the urgent decisions should be made or scheduled, and your attention can shift to the search. Set a monthly money review with your spouse or partner: update the cash runway, adjust the budget, and note deadlines coming due, such as the COBRA election date.

This is also a good moment to think beyond the next job. A layoff often prompts questions about a career change, consulting, a sabbatical, or an earlier retirement. Whatever the direction, a written plan keeps a stressful season from turning into an expensive one. If you would like a second set of eyes on the numbers, our financial planning team works with professionals through exactly this kind of transition.

A layoff compresses a year's worth of financial decisions into a month. Work the checklist in order: paperwork, health coverage, cash flow, retirement accounts, taxes, and protection. Take the time you are legally allowed to review the severance agreement, keep your 401(k) intact, and build a runway long enough to search well rather than fast. The people who come through a layoff in good shape are rarely the ones who moved quickest. They are the ones who moved in the right order.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, physicians, and business owners. Advisory services are held to a fiduciary standard. More about Attend