SAN ANTONIO — You might be on the unemployment boat. Whether the job loss came at a surprise or was an expected outcome, your financial security is now gone.
KENS 5 spoke with senior wealth advisor and partner of Covenant, Karl Eggerss, who shared how to deal with the unexpected job loss. In addition to filing for unemployment benefits, here are the top five ways to survive unemployment until you can land another job:
#1: Build your cash reserve
“If you know your job is going to end, they said in the next month we are going to lay you off, this is the time to put as much away in your cash reserves as possible, to reduce your expenses as much as possible. Probably, stop contributing to your 401(k),” said Eggerss.
#2: Check your benefits
“Do I need to go to the dentist or the doctor right now while I still have this great company plan. Do those things in advance,” advised Eggerss. “Also, consider what insurance will be available to you when you’re unemployed. See if you’re eligible for COBRA.”
#3 File for social security
“If you get laid off and you’re 62-years-old, maybe that’s the time to start social security in your particular situation. What other income sources do you have in other words, that can bridge the gap between now and the time you perhaps, get another job?” he said.
#4 Use the equity in your home
“A home equity loan or a home equity line of credit. It can be a temporary bridge, almost like a credit card, temporarily. It might be a lower rate than what your credit card would be. If you’re going 1,2,3 months without having a job, look at where am I going to get that income to pay for my expenses. Hopefully, it comes from your cash reserves,” said Eggerss.
#5 Retirement savings
“2020 is an interesting year because of COVID-19. The IRS and the government have made some changes to the rules on getting those retirement funds back to you and being able to pay them back later. So, there’s a lot of details around that but that is something to consider because this is a pretty forgiving year to tap your retirement savings even though we don’t recommend it,” recommended Eggerss.