Life after the layoff

The fact that the news is filled with tales of massive layoffs across a wide swath of industries doesn’t take away the sting of actually being handed a pink slip.

Along with your paperwork, and a box to pack up your belongings, it’s likely you’ll get a lot of unsolicited advice on what to do next. However, advice on what not to do is even more important. Here are my top three what not to dos if you are laid off.

Number One: Don’t take it personally.

Yes, easier said than done, not taking it personally is essential to maintaining your sense of self-worth. To help you overcome the “what did I do?” hurdle, take a step back and try to differentiate between what you could and could not have controlled.

Can you control the financial direction of the world economy? No. Can you single handedly affect the contract that your company didn’t win which led to the layoffs? Probably not. Bringing some perspective to the moment can help you move beyond the taking it personally moment and onto the far more productive act of thinking about what this could mean to your professional future.

Maybe getting laid off is the catalyst that moves you to pursue a line of work or career that you’ve always thought about. Many great businesses in America got started during recessions by people who lost their job and followed their dream.

Number Two: Don’t follow the herd in terms of financial planning and advice

When layoffs are imminent, it’s natural that water cooler talk turns to subjects like what to do with your 401K or severance package (if you are lucky enough to get one). It’s important to remember that everyone’s financial situation, goals and needs are different. What may be right for the guy in the cubicle next to you, probably isn’t exactly right for you. While it’s great to review options with colleagues, be wary of following the herd. They might just be lemmings.

Number Three: Don’t rush to roll over your 401K/403B into an IRA

Very often your employer may set you up with their financial consultant to discuss what to do with your 401K or 403B. While the gesture is well intentioned, you may want to proceed with caution. Many advisers only get paid if you roll over your fund so you can probably guess how that conversation is going to go … if the only way that adviser can get paid is by selling you a product — they may, almost magically, suggest that buying a product they can sell is the best first step.

The truth is there are different rules on accessing your money from different accounts with or without penalty depending upon your age. For example, if you needed to access money before age 59.5, accessing it from a 401K will prove more advantageous than taking it out of an IRA.

An impartial, professional financial adviser can help you weigh your options and bring a sense of control to a typically out-of-control moment in life.

While getting laid off may feel like the end of the world, it can also be viewed as the start of a new chapter. Taking control of your financial future will also take you one step closer to crafting a happier ending.