I got laid off about 2 months ago and thankfully was able to navigate quickly to get unemployment benefits set up and got extremely lucky with a few weeks of severance. We had a well funded emergency fund that we thankfully didn’t have to touch but my first order of business was running a new budget to calculate exactly what our fixed and variable expenses would be with this new income situation. I was able to get a new job a few weeks later remarkably but we would have been ok for a few months. The new job is also an upgrade!
A follow up to this: the scariest part in my option is health insurance coverage. Thankfully we had just gotten married recently so I was eligible to be on my wife’s plan… but the other options were shockingly expensive. At the new job there’s a 2 month waiting period to enroll so I really needed 3+ months of coverage which is not inconsequential
I was laid off in December 2023. Got the notification on the week of my 27 year anniversary with the company. I was in HR and knew it was likely as I had just helped layoff 100’s of employees in that role. I think four things are important. 1. Being laid off is emotional. Take some time to grieve the loss. You must allow this. 2. Asses-take a deep luck into your finances and career options. 3. Plan. Figure out your next steps. 4. Take Action. Your job now is to get a job. Get busy!
I remember my dad getting fired because his plane was delayed. Government gave him some money to go back to school in an accelerated program where he finished his degree. That allowed him to get in on a pension plan and he looks back at getting laid off as the best thing that happened. (The family did tighten the belt but 3 years of sacrifice was worth it.)
Got laid off in early 2023....as soon as HR put the meeting on my calendar I knew what was happening and got on the phones with my contacts. Road out the severance pay (few weeks) and got into a job while I searched for the next long term position. It will happen to most but you have connections and there's no shame in reaching out to them. I feel for everyone who goes through this but try your best to keep a level head and you'll be okay. You planned for this now it's game time!
Follow up on my 401K match: Its 61% on the dollar for the first 20% of my salary during the year. If I exceed the 20% of my paycheck there is a lump sum match to catch up the following March to give us the match up to the IRS maximum. The catch is a 6 year vesting schedule.
Good advice on layoffs. Happened to me last year. A few points: 1) Taxes can be tricky for high earners. Potentially up to double social security withholding. Severance can bump you into higher bracket. Should you defer severance to the next year if they let you? Start more tax planning early. 2) If you are close to retirement, consider the 401k rule of 55. 3) Focus on healthcare coverage in the interim. Part of severance, COBRA, spouse, healthcare.gov…. Don’t have a gap in coverage. Consider impact to HSA - may want to have a high-deductible plan in all months. 4) File for unemployment ASAP. severance often does not disqualify you. 5) carefully plan 401k and HSA contributions to avoid excess contributions once you have a new job. 6) take care of yourself and your family mentally. It is stressful. While stressful, it can be financially beneficial as Bo and Brian said. Of course all this is easier if you have a financial/tax advisor.
Great content as always. The volume on the past couple videos has been pretty low. Used to watch these on my drive home for lunch, and now I have to crank my radio way up to hear.
I'm in my early 50s and at a stage in my life where a layoff would force a tough decision... look for a new job or simply retire. Based on my age, tenure and level, I'd probably get one year of severance which would place me about 1-2 years short of reaching my number. It's a nice problem to have but still a decision I'd struggle with.
I am so glad someone else is still on that... my spouse and I watched that one together, and ever since we use "thirst trap" but in the wrong context as often as possible as a running joke that may never get old!
OK maybe I remember to bring this up in a future livestream Q&A.... but even with 100% 401k match, that 100% in a one-time return, and yes you might get 8% annually on that 100% match, but the high-interest debt's 25-30% rate is going to keep compounding annually so if you're actually in credit card debt, you'll get a nice return in year 1, but every dollar you could have paid in year 1 will have a break-even point a few years down the road where if you're still in debt, it would have made more sense to have paid down the debt than get that 100% initial return, right? I didn't run the actual numbers but it seems like it would....
Just had the conversation with the in laws that I have to take over the payments for whole life. I mentioned I was going to cash it out and they got offended and are still paying for it.. for now that's fine I guess
Would you guys say out of control housing costs is partly due to people leveraging to snap up real estate in order to catch up to all the influencers out there encouraging it?
Housing costs are out of control both because bad zoning keeps more houses from being built (especially multi-family and apartments) and because so many companies and people are buying up properties for speculation or investment. Low supply and unprecedented demand
I was furloughed for 7 weeks last year. My bills are so low that I was able to save money. It took 6 weeks to get mu first unemployment check. They called me back the next week after I finally got unemployment started. Ive been living in hell. My last day on my job I was told i should be wrote up for taking my break and that they had jist hired too many people. I had pulled a tension member on a stand across the plant because it would "take too long" to order a tension member for our stand. I wasnt allowed to take my last break. (We get 3- 20 minutes breaks in 12.25 hour. I was in pain from pulling the stand and filed a workman's comp claim. They will probably fire me when i go back but im prepared for time off. I had been buying stocks with most of my paychecks. Plus I have savings in my high yield savings account. Plus im getting a refund from appealing my property taxes. My lead that was giving me a hard time, pays $300 a week in child support and rents an expensive loft on the square. He is losing a lot of weight. 😂
Pre tax retirement will have higher taxes if someone would hit RMD. The taxes can be more than now because the mutant who is in higher tax bracket would have a large contribution throughout their life and the growth would be large and subjected to large tax bills with RMD.
RMD isn't usually as bad as people think except for maybe financial mutants like you said. It starts at 4% which is probably our regular withdrawal rate and even by age 90 it's only an 8% rate.
@@rayzerot good to know. Any employer matching goes in traditional so that might be enough money with growth for many people to cause taxes due to RMD also. Adding more to it might not be good tax strategy. Taxes are inevitable though in either cases.
@@dragoncat5836 possible if the amount is low enough and there is other source of expenses while doing the Roth conversion. Maybe I am not 100% clear or confident on the math.
Cheaper to DIY anyway. White Coat Investor and Bogleheads pick up where Money Guys leave off. Learn to enjoy reading about financial topics and subscribe to various advisor blogs. You can learn a lot that way.
I got laid off about 2 months ago and thankfully was able to navigate quickly to get unemployment benefits set up and got extremely lucky with a few weeks of severance. We had a well funded emergency fund that we thankfully didn’t have to touch but my first order of business was running a new budget to calculate exactly what our fixed and variable expenses would be with this new income situation. I was able to get a new job a few weeks later remarkably but we would have been ok for a few months. The new job is also an upgrade!
A follow up to this: the scariest part in my option is health insurance coverage. Thankfully we had just gotten married recently so I was eligible
to be on my wife’s plan… but the other options were shockingly expensive.
At the new job there’s a 2 month waiting period to enroll so I really needed 3+ months of coverage which is not inconsequential
@@BostonCycling_yes health insurance is the scariest part
Proof that life can be 1/2 as hard with a supportive and able partner.
I was laid off in December 2023. Got the notification on the week of my 27 year anniversary with the company. I was in HR and knew it was likely as I had just helped layoff 100’s of employees in that role. I think four things are important. 1. Being laid off is emotional. Take some time to grieve the loss. You must allow this. 2. Asses-take a deep luck into your finances and career options. 3. Plan. Figure out your next steps. 4. Take Action. Your job now is to get a job. Get busy!
I remember my dad getting fired because his plane was delayed. Government gave him some money to go back to school in an accelerated program where he finished his degree. That allowed him to get in on a pension plan and he looks back at getting laid off as the best thing that happened.
(The family did tighten the belt but 3 years of sacrifice was worth it.)
Got laid off in early 2023....as soon as HR put the meeting on my calendar I knew what was happening and got on the phones with my contacts. Road out the severance pay (few weeks) and got into a job while I searched for the next long term position.
It will happen to most but you have connections and there's no shame in reaching out to them. I feel for everyone who goes through this but try your best to keep a level head and you'll be okay. You planned for this now it's game time!
Follow up on my 401K match:
Its 61% on the dollar for the first 20% of my salary during the year.
If I exceed the 20% of my paycheck there is a lump sum match to catch up the following March to give us the match up to the IRS maximum.
The catch is a 6 year vesting schedule.
Still, that is a phenomenal perk!
So 14% employer contribution at least if you contribute 20% woohoo!
Good advice on layoffs. Happened to me last year. A few points:
1) Taxes can be tricky for high earners. Potentially up to double social security withholding. Severance can bump you into higher bracket. Should you defer severance to the next year if they let you? Start more tax planning early.
2) If you are close to retirement, consider the 401k rule of 55.
3) Focus on healthcare coverage in the interim. Part of severance, COBRA, spouse, healthcare.gov…. Don’t have a gap in coverage. Consider impact to HSA - may want to have a high-deductible plan in all months.
4) File for unemployment ASAP. severance often does not disqualify you.
5) carefully plan 401k and HSA contributions to avoid excess contributions once you have a new job.
6) take care of yourself and your family mentally. It is stressful.
While stressful, it can be financially beneficial as Bo and Brian said.
Of course all this is easier if you have a financial/tax advisor.
Great content as always. The volume on the past couple videos has been pretty low. Used to watch these on my drive home for lunch, and now I have to crank my radio way up to hear.
Seconded
Agreed in my car I could barely hear them.
I'm in my early 50s and at a stage in my life where a layoff would force a tough decision... look for a new job or simply retire.
Based on my age, tenure and level, I'd probably get one year of severance which would place me about 1-2 years short of reaching my number. It's a nice problem to have but still a decision I'd struggle with.
Sad I missed today - I submitted a question through the website! Thanks for everything you guys do.
I'm so pumped Brian's reading his own book!
Bo's got the lumberjack look going on today.
I hope millionaire mission audio version it's not an audible exclusive
Keep thirst trappin' bombastic Brian!
I am so glad someone else is still on that... my spouse and I watched that one together, and ever since we use "thirst trap" but in the wrong context as often as possible as a running joke that may never get old!
@@SarahWilley838 I'm still hoping Brian throws it out there again because it caught me completely off guard the first time 😂
OK maybe I remember to bring this up in a future livestream Q&A.... but even with 100% 401k match, that 100% in a one-time return, and yes you might get 8% annually on that 100% match, but the high-interest debt's 25-30% rate is going to keep compounding annually so if you're actually in credit card debt, you'll get a nice return in year 1, but every dollar you could have paid in year 1 will have a break-even point a few years down the road where if you're still in debt, it would have made more sense to have paid down the debt than get that 100% initial return, right? I didn't run the actual numbers but it seems like it would....
Just had the conversation with the in laws that I have to take over the payments for whole life. I mentioned I was going to cash it out and they got offended and are still paying for it.. for now that's fine I guess
Would you guys say out of control housing costs is partly due to people leveraging to snap up real estate in order to catch up to all the influencers out there encouraging it?
Housing costs are out of control both because bad zoning keeps more houses from being built (especially multi-family and apartments) and because so many companies and people are buying up properties for speculation or investment. Low supply and unprecedented demand
@@rayzerot yes, but is that partly due to influencers pushing people to be investors?
Liquor, Lovers, and Leverage! Love it
I actually happened on it on Audible about a week ago and it said read by Brian Preston and I was stoked!
I was furloughed for 7 weeks last year. My bills are so low that I was able to save money. It took 6 weeks to get mu first unemployment check. They called me back the next week after I finally got unemployment started.
Ive been living in hell. My last day on my job I was told i should be wrote up for taking my break and that they had jist hired too many people. I had pulled a tension member on a stand across the plant because it would "take too long" to order a tension member for our stand. I wasnt allowed to take my last break. (We get 3- 20 minutes breaks in 12.25 hour. I was in pain from pulling the stand and filed a workman's comp claim. They will probably fire me when i go back but im prepared for time off. I had been buying stocks with most of my paychecks. Plus I have savings in my high yield savings account. Plus im getting a refund from appealing my property taxes.
My lead that was giving me a hard time, pays $300 a week in child support and rents an expensive loft on the square. He is losing a lot of weight. 😂
Best of luck Annie
@@rayzerot Thank you
Pull off bandage quickly.
Get fired, start cutting.
Pre tax retirement will have higher taxes if someone would hit RMD. The taxes can be more than now because the mutant who is in higher tax bracket would have a large contribution throughout their life and the growth would be large and subjected to large tax bills with RMD.
RMD isn't usually as bad as people think except for maybe financial mutants like you said. It starts at 4% which is probably our regular withdrawal rate and even by age 90 it's only an 8% rate.
@@rayzerot good to know. Any employer matching goes in traditional so that might be enough money with growth for many people to cause taxes due to RMD also. Adding more to it might not be good tax strategy. Taxes are inevitable though in either cases.
FIRE, do Roth conversions. Profit.
@@dragoncat5836 possible if the amount is low enough and there is other source of expenses while doing the Roth conversion. Maybe I am not 100% clear or confident on the math.
Brian, are you actually a southerner? You need to adopt the "hug culture"!
❤❤❤
🙏🙏
Trying to work with money guy in 2022… get to $400k. 2024: Get to 5,6 or $700k. 😆🤣😭😭😭
When I started watching it was $300k 😂 I don’t think I’ll ever get to work with them. 😆😭
Cheaper to DIY anyway. White Coat Investor and Bogleheads pick up where Money Guys leave off. Learn to enjoy reading about financial topics and subscribe to various advisor blogs. You can learn a lot that way.
@@dragoncat5836 Thanks for the recommendations!
Travel :)
First