What to know about severance packages, your health care and 401K after you’re laid off.
GREENSBORO, N.C. — Pink slip. Notice of termination. Layoffs happen in all kinds of industries.
Even if you’re not worried about it, it’s worth you thinking about it. Financial experts call it, having a layoff protection plan. This includes severance packages, health care options, and what to do with your 401K.
If you got laid off, you’ll need to know what the standard severance package includes. You’ll want to have a tally of all your unused vacation and personal days. Just like when you were hired, you may be able to negotiate the terms of the severance.
HEALTH CARE OPTIONS
If you receive health insurance through your employer and lose your job, you’re entitled to COBRA, which provides workers and their families extended health care coverage for a limited time, usually up to 18 months.
“The big catch with COBRA is you usually have to pay a hefty monthly premium. It may be beneficial to check out Healthcare.gov, which could offer coverage options cheaper than COBRA, especially if you qualify for tax credits,” said Jill Schlessinger, CBS News Business Analyst.
Now, let’s talk about what you should do about your 401K. You don’t have to do anything right away. If you get a new job within 60 days you can roll over the old account to the new employer’s retirement plan. If not, you can always roll your 401K into a Traditional or Roth IRA.
After 60 days, you will have to pay taxes on the money. Every retirement plan administrator does it differently. Some will send a paper check to you or the next plan, some will do wire transfer.