What Are the 15 Things You Need to Do When You Get Laid Off?

If you have just been laid off, request a separation letter, review your severance agreement, check your final paycheck and unused PTO, confirm when employer benefits end, compare health insurance options, apply for unemployment benefits, and review your retirement benefits. Then calculate available cash, estimate how long your savings can cover expenses, reduce non-priority spending, review debt payments, update your resume and professional profiles, reconnect with your network, begin your job search, and maintain your physical and mental well-being.

A layoff can suddenly interrupt your regular paycheck while health coverage, household bills, debt payments, and other financial responsibilities continue. These steps address both sides of that transition: managing the immediate financial impact and preparing for new employment. Reviewing benefits, cash flow, expenses, debt, and retirement resources clarifies your current financial position, while updating your professional presence, reconnecting with contacts, and starting a job search moves you toward your next role. The sections below explain each action and the decisions that may require attention.

Below are the main actions to consider after losing your job:

• Request a layoff or separation letter from Human Resources

• Review your severance agreement before signing it

• Check your final paycheck and unused PTO

• Apply for unemployment benefits

• Confirm when employer benefits end 

• Review your health insurance options

• Review your 401(k), pension, and other retirement benefits

• Calculate how much cash you have available

• Estimate how long your savings can cover your expenses

• Reduce non-priority spending

• Review your debt and monthly payment obligations

• Update your resume and professional profiles

• Reconnect with your professional network

• Start your job search

• Take care of your physical and mental well-being

1. Request a Layoff or Separation Letter From Human Resources

Ask Human Resources for written confirmation of your layoff before your final working day or shortly afterward. The letter should state your employment end date and may include the stated reason for separation, severance information, and details about workplace benefits. Keep the letter with your employment records because it can help document your employment end date and separation circumstances when completing unemployment claims, benefits paperwork, or future employment records. 

Review every detail before storing the document. Check your name, job title, final employment date, and stated separation reason against what your employer communicated. Federal law does not generally require employers to provide a discharge notice or reason for discharge, although state requirements may differ. Coordinate with HR on where to send employment-verification requests, and check your state labor agency for any documentation required when filing an unemployment claim.

2. Review Your Severance Agreement Before Signing It

Evaluate every severance term before signing because the agreement can determine not only how much compensation you receive, but also when you receive it, which workplace benefits continue, and what legal or employment-related conditions you accept. Review the severance amount, whether payment comes as a lump sum or salary continuation, the payment schedule, benefit continuation, acceptance deadline, confidentiality terms, release language, and any restrictive covenant affecting future employment. Do not focus only on the dollar amount because other provisions may affect your legal rights, future work, or access to workplace benefits.

Consider how the agreement fits your immediate financial position before deciding. Salary continuation and a lump-sum payment can affect cash flow differently, while severance compensation may also have tax consequences. Federal law does not generally require severance pay under the Fair Labor Standards Act, so availability often depends on an agreement, employer policy, or employment arrangement. If any provision has significant legal or tax consequences, consider having an attorney or tax professional review it before signing.

3. Check Your Final Paycheck and Unused PTO

Compare your final paycheck with your employment records to identify unpaid wages, commissions, expense reimbursements, bonuses (when applicable), deductions, or other compensation tied to your final work period. Review the pay stub line by line against your normal salary or recorded hours. Ask Human Resources when the payment will arrive and whether any remaining compensation will be issued separately from your regular final paycheck.

Also ask how the company will handle unused vacation or PTO under company policy and applicable state law. Federal law does not require an employer to provide a final paycheck immediately after employment ends, although some states impose different payment requirements. PTO payout rules may also vary by state and employer policy. If the regular payday passes and wages remain unpaid, the DOL advises workers to contact its Wage and Hour Division or their state labor department.

4. Apply for Unemployment Benefits

File for unemployment through the state where you worked soon after being laid off. Unemployment insurance provides temporary income to eligible workers who lose employment under qualifying circumstances, but each state sets its own eligibility standards, filing procedures, benefit calculations, certification requirements, and job-search rules. In most situations, claims should be filed in the state where the work was performed rather than automatically in the state where you currently live.

Gather your employment dates, former employer information, wage records, separation details, and layoff documentation before starting the application. Describe the separation accurately because quitting, being dismissed, and being laid off may be treated differently under state rules. After filing, follow the state's certification schedule and any required job-search activity. No single federal unemployment program or universal benefit amount exists, so use your state's unemployment agency for claim-specific requirements and deadlines.

5. Confirm When Employer Benefits End 

Confirm the exact end date of each employer benefit as soon as you are laid off because these dates determine when you may need replacement coverage or must act on time-sensitive benefit options. Ask Human Resources or the plan administrator for the dates in writing. Do not assume your medical, dental, vision, life insurance, disability coverage, employee assistance program, and other benefits all terminate on your final working day. Plan rules can differ, so review any continuation, conversion, or account-use provisions connected to each benefit.

This review matters because workplace benefits can represent a significant part of employee compensation. In March 2026, 72% of private-industry workers had access to retirement benefits, while 59% had access to life insurance and 44% had access to short-term disability plans (U.S. Bureau of Labor Statistics [BLS], 2026). Check what happens to FSA funds, HSA access, disability benefits, life insurance, and EAP services so you can factor upcoming costs and coverage changes into your financial plan.

6. Review Your Health Insurance Options

Compare health coverage options before your employer plan ends. Depending on eligibility, choices may include COBRA continuation coverage, an ACA Marketplace plan, coverage through a spouse or partner, Medicaid, or another available plan. Compare premiums, deductibles, prescription coverage, provider networks, out-of-pocket costs, enrollment deadlines, and coverage start dates so you understand both the monthly cost and what you may pay when receiving care.

Cost comparisons matter because employer-sponsored coverage can represent a substantial household expense. In 2025, average annual family premiums reached $26,993, up 6% from 2024, while workers contributed an average of $6,850 toward family coverage. Among covered workers enrolled in plans with a general annual deductible, the average deductible for single coverage was $1,886 (KFF, 2025). Use these figures as context when comparing COBRA, Marketplace, and other available coverage after a layoff.

7. Review Your 401(k), Pension, and Other Retirement Benefits

Review every retirement benefit connected to your former employer before moving or withdrawing funds. Ask for your current account statement and Summary Plan Description so you can check balances, vesting, pension rights, beneficiaries, plan loans, and distribution options. Retirement benefits are common among U.S. workers. In March 2026, 72% of private-industry workers had access to retirement benefits, including 70% with access to defined contribution plans and 14% to defined benefit plans (U.S. Bureau of Labor Statistics [BLS], 2026).

Depending on plan rules, options may include leaving a 401(k) with the former employer, completing an eligible rollover, or taking a distribution. Tax treatment differs among these choices. Taxable retirement distributions taken before age 59½ may face an additional 10% federal tax unless an exception applies (Exceptions to Tax on Early Distributions, IRS, 2025). Review plan terms and tax consequences before moving or withdrawing retirement money.

8. Calculate How Much Cash You Have Available

Add up the funds you can realistically use for near-term expenses after losing employment income. Include checking balances, savings, final pay, severance already received, and other short-term income you reasonably expect. Record each amount separately and note whether it is currently available or still pending. Keep retirement accounts and home equity outside this calculation because they do not function like ordinary cash available for routine monthly expenses.

This step matters because many households have limited emergency reserves. In 2025, 55% of U.S. adults reported having savings set aside to cover three months of expenses if they lost their primary income source (Board of Governors of the Federal Reserve System, 2026). Compare your available cash with housing, food, utilities, medical coverage, transportation, and debt payments. Update the total whenever severance, unemployment benefits, contract income, or other cash inflows change.

9. Estimate How Long Your Savings Can Cover Your Expenses

Calculate your approximate financial runway by dividing available liquid funds by required monthly expenses. For example, $24,000 in readily available funds divided by $4,000 in required monthly expenses equals about six months of runway, before considering future income or unexpected costs. Include housing, food, utilities, health coverage, transportation, minimum debt payments, and other obligations that continue while you are looking for work.

Use conservative figures rather than assuming another job will begin quickly. Federal Reserve research found that 55% of adults had savings for three months of expenses in 2025, meaning a substantial share did not have that amount specifically set aside. Add unemployment benefits, severance installments, freelance earnings, or other expected income separately. Recalculate monthly because both expenses and incoming funds may change during the employment transition.

10. Reduce Non-Priority Spending

Divide your monthly expenses into required, adjustable, and discretionary categories while employment income is reduced or unavailable. Required spending generally includes housing, food, utilities, medical coverage, transportation, insurance, minimum debt payments, and reasonable job-search expenses. Adjustable expenses may have lower-cost alternatives, while discretionary purchases can often be delayed without affecting basic household needs or your ability to pursue new employment.

Review recurring costs individually instead of cutting spending at random. You might pause unused subscriptions, cut back on restaurant spending, delay optional purchases, or switch to lower-tier service plans. Federal Reserve research found that 63% of adults could cover a hypothetical $400 emergency expense in 2025, illustrating that many households have limited room for unexpected expenses (Board of Governors of the Federal Reserve System, 2026). Connect spending reductions to your runway and revisit the budget whenever household income changes.

11. Review Your Debt and Monthly Payment Obligations

List every outstanding debt, interest rate, required monthly payment, and due date after being laid off. Include credit cards, mortgages, vehicle loans, student loans, personal loans, and other recurring repayment obligations. Recording everything in one place shows how much of your monthly cash is already committed before you account for adjustable or discretionary spending. Include these required payments when calculating your financial runway.

If available cash may not cover future payments, contact the lender or creditor before a missed payment and ask what hardship or temporary payment arrangements may be available. Terms differ by lender, loan type, and borrower circumstances, so do not assume one creditor's arrangement will apply to another account. Review changes to payment amounts, interest, repayment dates, fees, and future obligations before accepting an arrangement. Also measure how any new borrowing would affect monthly cash needs while employment income remains uncertain.

12. Update Your Resume and Professional Profiles

Update your resume and professional profiles before beginning a large round of applications. Add recent roles, measurable accomplishments, current skills, certifications, and terminology that accurately matches the positions you are pursuing. Check employment dates, phone numbers, email addresses, portfolio links, and other contact information across your resume and online profiles so employers receive consistent information wherever they review your background.

Use evidence rather than broad job descriptions when describing previous work. Instead of writing that you “managed projects,” identify the project scope, action taken, and measurable result when those details are available. Review current job descriptions for your target positions and incorporate relevant terminology only when it accurately reflects your background. Your professional statement can identify your role focus, core capabilities, and intended career direction. Keep networking separate from this task so your resume stays focused on documented qualifications, work history, and outcomes relevant to prospective employers.

13. Reconnect With Your Professional Network

Contact former colleagues, managers, recruiters, mentors, clients, association members, and other professional contacts who know your work. Tell them what type of position you are seeking rather than sending a broad message that you are open to anything. Specific information about your target role, industry, location, and preferred work arrangement gives contacts a clearer basis for identifying a relevant opening, introduction, referral, or hiring connection.

Keep each message brief and useful. Explain that your employment recently changed, identify the type of work you are pursuing, and mention the skills or experience most relevant to that direction. When appropriate, ask whether the person knows a hiring manager, recruiter, company, or opening connected to your target. Maintain these relationships after the initial outreach, rather than contacting people only when you need an immediate opportunity. Keep a simple record of conversations, introductions, referrals, and follow-up dates.

14. Start Your Job Search

Define your target positions before sending applications widely. Identify suitable job titles, employers, industries, compensation ranges, locations, and work arrangements, then create job alerts and review company career pages, job boards, recruiter opportunities, and referrals. Tailor applications when your background genuinely matches the role, and track the employer, position, application date, contact person, interview stage, and next action in one document or spreadsheet.

Build enough financial flexibility to cover essential expenses during a potentially extended job search. In September 2026, the seasonally adjusted median duration of unemployment in the United States was 11.5 weeks, according to the U.S. Bureau of Labor Statistics (BLS). This national figure describes the common duration across unemployed workers, not an individual's expected timeline. Continue preparing for interviews and evaluate compensation, benefits, schedule, location, and employment terms when offers arrive. 

15. Take Care of Your Physical and Mental Well-Being

Maintain a consistent daily routine while dealing with the financial and employment changes that follow a layoff. Regular sleep, meals, physical activity, personal time, social contact, and scheduled job-search hours can provide structure when your normal work routine has ended. Treat applications and job boards as scheduled activities, rather than letting employment concerns fill the entire day.

Set aside time away from applications, and stay connected with family, friends, or others who provide useful support. If your former employer offered an employee assistance program, ask whether access continues temporarily after your employment ends and confirm the termination date. Seek qualified medical or mental-health care when your circumstances call for professional evaluation or treatment. This step is not about diagnosing a response to job loss. It is about maintaining a workable routine while handling finances, workplace benefits, professional contacts, applications, interviews, and the transition toward new employment.

What to Do When Laid Off at 50: Special Considerations

If you are laid off at 50, prioritize maintaining health insurance, review how the job loss may affect your retirement and Social Security planning, use employment resources for experienced workers, and adapt your job search to your current skills and career goals. Job loss at this age can affect employment income, workplace benefits, retirement contributions, and longer-term financial plans. Review these areas together before making major financial or career decisions.

The main areas to consider after being laid off at 50 include:

• Plan for Ongoing Health Insurance Coverage

Compare COBRA, Marketplace plans, eligible spouse coverage, Medicaid when applicable, and other available health insurance options after a layoff. Medicare eligibility generally begins at 65, and the Initial Enrollment Period lasts seven months, beginning three months before the month you turn 65 and ending three months afterward (Medicare.gov, 2026). Someone laid off at 50 may therefore need non-Medicare coverage for many years. Compare premiums, deductibles, provider networks, prescriptions, enrollment dates, and coverage start dates, then include expected health insurance costs in your cash-flow planning.

• Review Social Security Timing Before Claiming

Consider how the layoff may affect your longer-term Social Security strategy rather than treating retirement benefits as immediate replacement income. Social Security retirement benefits can generally begin at 62, but for people born in 1960 or later, claiming at 62 can reduce the monthly benefit by as much as 30% compared with waiting until full retirement age 67 (Social Security Administration [SSA]). Delaying benefits beyond full retirement age can increase the monthly amount until age 70. Compare benefit estimates at different claiming ages with your retirement assets, expected employment income, and longer-term cash-flow needs.

• Check Age-Specific Employment Support

Use employment and training resources available to experienced workers after a layoff. Review American Job Centers, CareerOneStop resources, state training programs, and EEOC guidance on age discrimination. If you are 55 or older and meet applicable income requirements, you may also qualify for the U.S. Department of Labor’s Senior Community Service Employment Program, which provides work-based training and employment assistance to eligible older workers.

• Adjust Your Job Search Strategy

Adjust your job search around current skills, recent accomplishments, transferable experience, and the roles employers are filling now. In 2025, median unemployment duration was 11.8 weeks for adults ages 45–54 and 11.3 weeks for ages 55–64, compared with 9.9 weeks overall (U.S. Bureau of Labor Statistics [BLS], 2026). Use that broader labor-market context for planning, not as an individual timeline. Update your resume and profiles, evaluate full-time, contract, consulting, hybrid, or part-time roles, and compare compensation, benefits, schedule, and stability.

What Mistakes Should You Avoid After Getting Laid Off?

After getting laid off, avoid making major financial changes too quickly, withdrawing retirement money without reviewing the consequences, spending severance without a cash-flow plan, delaying an unemployment claim, letting health coverage lapse, or adding debt while income is uncertain. Each decision can affect available cash, monthly expenses, workplace benefits, or long-term retirement resources. Review the immediate and future financial effect before committing money or changing existing accounts.

6 key mistakes to avoid after a layoff include:

1. Making Major Financial Decisions Too Quickly

Prevent unnecessary strain on your available cash by delaying major purchases, relocation, a home sale, or significant investment changes until you understand your financial position. A large commitment after a layoff can shorten the period your savings can cover required expenses while your next source of employment income remains uncertain. Before acting, calculate housing costs, insurance, taxes, debt payments, food, and other required expenses. Compare each major decision against your available cash and expected short-term income.

2. Cashing Out Retirement Accounts Without Reviewing the Impact

Avoid withdrawing money from retirement accounts until you review the potential taxes, penalties, and impact on your retirement savings. A taxable distribution from a 401(k) or similar retirement plan can reduce funds available for later years and may create a current tax obligation. Some early distributions can also face an additional 10% tax unless an IRS exception applies. Review your plan options, immediate cash needs, and applicable tax rules before requesting a withdrawal.

3. Spending Severance Without a Short-Term Plan

Treat severance as part of your overall cash reserve, not discretionary income. When deciding how to use the money, account for housing, food, health insurance, utilities, minimum debt payments, taxes, and job-search costs. Compare the severance amount with your available cash, expected income, and financial runway before deciding how much you can spend each month.

4. Waiting Too Long to Apply for Unemployment

Apply for unemployment benefits promptly if you may qualify rather than waiting until your savings begin to run low. State unemployment programs have their own eligibility rules, filing procedures, certification requirements, and work-search conditions. Check your state's unemployment agency instructions soon after employment ends. Gather your employment dates, wage information, former employer details, and separation records so you have what you need to submit and maintain your claim.

5. Letting Health Insurance Coverage Lapse

Try not to let employer-sponsored medical insurance end before you have reviewed available continuation or replacement coverage. A coverage gap can leave you responsible for medical expenses incurred while no health insurance plan is active. Compare COBRA, Marketplace coverage, an eligible spouse's plan, Medicaid where applicable, and other available options. Review premiums, deductibles, provider networks, enrollment deadlines, prescription coverage, and effective dates so you can coordinate new coverage with the end of your former employer's plan.

6. Taking on New Debt While Income Is Uncertain

Avoid adding new debt until you know how the additional monthly payment would affect your available cash and financial runway. Credit card balances, personal loans, vehicle financing, and other borrowing can increase required expenses while employment income remains uncertain. Review the interest rate, fees, repayment period, minimum payment, and total borrowing cost before accepting new credit. Consider whether the purchase can wait or whether existing cash flow can cover the expense without creating another monthly obligation.

Why Being Laid Off Can Actually Be Good

Being laid off can have positive career outcomes because it may open access to higher-paying positions, give you time to reconsider your career direction, end a poor workplace fit, or make an industry change possible. Losing a job can still have a significant financial impact, but the transition can also create career options you may not have considered while employed. For some workers, the next role may offer better compensation, working conditions, or career alignment.

The potential benefits of being laid off can include: 

• Opportunity for Higher Pay

A layoff can lead to higher pay when a worker moves from an underpaid position to a role that reflects current market compensation. A job change may also create access to promotion-level positions, stronger benefit packages, or industries with higher salary ranges. Workers who have gained valuable skills and experience since accepting their previous position may find that their current market value exceeds their former compensation. As a result, the next job can represent both a change in employment and an increase in earning potential.

• Time to Rethink Your Career Direction

Losing a job can create space to reconsider whether a previous career path still fits a person's skills, interests, compensation goals, and work-life needs. Continuous employment often leaves little time to evaluate different occupations, industries, or training options. A career transition can reveal that existing skills fit roles beyond the worker's previous job title. It can also identify new training needs and clarify which type of work better supports the person's long-term career direction.

• Chance to Leave an Unhealthy Work Environment

A layoff can end a workplace arrangement that no longer matches an employee's professional or personal needs. Problems may involve excessive workload, an unsuitable management style, limited autonomy, an inconvenient commute, inflexible scheduling, or few advancement opportunities. Leaving that environment can create the opportunity to find a workplace with conditions that better fit the employee's preferences. The next role may offer a more suitable schedule, management structure, workload, commute, workplace culture, or level of independence.

• Opportunity to Change Industries or Work Models

Job loss can create an opening to move into another industry or adopt a different way of working. Transferable skills in areas such as project management, sales, operations, financial analysis, or client communication can apply across multiple fields. The transition may also make remote, hybrid, consulting, contract, part-time, or self-employment options more realistic. These changes can offer different income opportunities, schedules, responsibilities, and career paths, although compensation stability and workplace benefits can vary by work model.

How Can a Financial Advisor Help You Navigate a Layoff?

A financial advisor can help coordinate the financial decisions that follow a layoff, including cash flow, severance, retirement accounts, investments, taxes, insurance costs, debt payments, and Social Security. Scenario planning can show how different periods of unemployment, spending levels, insurance expenses, and income sources may affect both current finances and longer-term retirement goals.

A layoff later in your career can also change when and how you begin using retirement assets. In this situation, Retirement Income Planning provides a framework for connecting severance, investment withdrawals, Social Security timing, taxes, and retirement accounts with future income needs. This coordinated approach can clarify how to balance immediate financial needs with your longer-term retirement plans.