When Your Paycheck Stops: A Job-Loss Money Checklist

First, take a breath

Before anything else: a job loss says nothing about your worth. Layoffs happen to good people at good companies, often for reasons that have nothing to do with performance.

It's normal to feel shock, anger, fear, or embarrassment. It's also normal to want to make big decisions right away to feel in control. Try to resist that. Very few financial decisions need to be made in the first 48 hours, and the ones that do have clear deadlines you can plan around.

The first few days

Get everything in writing

Before you leave, or as soon as possible afterward, get clear answers, ideally in writing, about:

• Your final paycheck: when it arrives and what it includes
• Unused vacation or paid time off: whether it will be paid out
• Severance: the amount, how it's paid, and any conditions
• Health insurance: the exact date your coverage ends
• Retirement plan: what happens to your account, and whether any employer contributions are unvested
• Stock or equity awards: what happens to unvested shares or options
• Other benefits: life insurance, disability insurance, flexible spending accounts, and health savings accounts

Don't rush to sign a severance agreement

Severance agreements often ask you to give up legal claims in exchange for payment. You usually have some time to review them, and in some cases, depending on your age and the situation, the law requires a review period.

It's worth reading the agreement carefully, and for larger packages or if you have concerns, having an employment attorney review it. Severance terms are sometimes negotiable, including the amount, the timing, health coverage, or an agreed reference.

Check your FSA

If you have a flexible spending account, money left in it may be lost when your coverage ends, depending on your plan. Check whether you can submit eligible expenses before your last day or during a run-out period.

File for reemployment assistance

In Florida, unemployment benefits are called Reemployment Assistance. It's worth applying as soon as you're eligible, since benefits generally aren't paid for weeks before you apply.

Florida's benefits are modest. The maximum weekly benefit is $275, among the lowest in the country, and for claims filed in 2025 or 2026, benefits generally last up to 12 weeks. The number of weeks is set by a formula tied to the state's unemployment rate, so it can change. Severance and other payments may affect when benefits start, depending on how they're paid.

Even at $275 a week, over 12 weeks that's up to $3,300 of support while you look for work. It's worth claiming if you're eligible. Benefits are generally taxable income for federal purposes.

The first two weeks

Know your runway

Figure out how long your money can last. Add up:

• Your cash savings and emergency fund
• Your final paycheck and any vacation payout
• Severance
• Expected reemployment assistance
• Your partner's income, if you have one

Then compare that to your household's essential monthly expenses. The number of months you can cover is your runway. Knowing it turns vague worry into something you can plan around.

Switch to a bare-bones budget

Cut back to essentials for now: housing, utilities, food, transportation, insurance, and minimum debt payments. Pause or cancel what you can:

• Subscriptions and streaming services
• Dining out and entertainment
• Nonessential shopping
• Extra debt payments beyond the minimum, at least until your runway is clear

This isn't forever. It's buying time.

Sort out health coverage

Health coverage is one of the most important, and time-sensitive, decisions after a job loss.

Your partner's plan. If your spouse or partner has coverage through work, losing your job usually qualifies you to join their plan outside of open enrollment, typically within a limited window, often 30 days. For households where one spouse has public-employee health coverage, this may be the simplest option.

COBRA. COBRA lets you keep your former employer's health plan, generally for up to 18 months. You typically have 60 days to elect it, and coverage can be retroactive to when your old coverage ended. The catch is cost: you usually pay the full premium plus an administrative fee, with no employer contribution, which can be expensive.

The marketplace. Losing job-based coverage generally qualifies you for a special enrollment period to buy a plan through HealthCare.gov, usually within 60 days. Depending on your household income for the year, you may qualify for premium tax credits that lower the cost. Keep in mind that the rules on who qualifies for subsidies are changing for 2027 coverage, and income estimates matter.

Medicaid. If your household income drops low enough, you may qualify for Medicaid.

It's worth comparing the options. Because COBRA can be elected retroactively within the election window, some people wait to decide while they compare other coverage, but that strategy has risks and deadlines, so it's important to understand the rules before relying on it.

Protect your life and disability coverage

If you had life or disability insurance through work, it may end with your job. Check whether you can convert or continue it, and whether you need replacement coverage, especially if others depend on your income.

The first month

Leave your retirement accounts alone, for now

One of the most common and costly mistakes after a job loss is cashing out a retirement account.

If you withdraw money from a 401(k) or similar plan, it's generally taxable income. And if you're under 59½, you may also owe a 10% early withdrawal penalty, unless an exception applies. On top of that, the plan will generally withhold 20% for federal taxes when paying you directly. A $30,000 withdrawal could shrink significantly after taxes and penalties, and it's money that won't be there for retirement.

You generally don't need to decide what to do with a former employer's retirement account right away. Common options include:

• Leaving it in your old plan, if allowed
• Rolling it into your new employer's plan, when you have one
• Rolling it into an IRA
• Cashing out, which is usually the most expensive choice

One exception worth knowing: if you leave your job in or after the year you turn 55, you may be able to take withdrawals from that employer's 401(k) without the 10% penalty. And governmental 457(b) plans generally don't have the 10% penalty on withdrawals after you leave your employer. Those rules can make a big difference in how you access money if you need it.

A note for FRS members leaving public employment

If you're an FRS member separating from public employment before retirement, your options depend on your plan, your years of service, and whether you're vested. Decisions about your FRS account or benefits can have long-lasting consequences. The MyFRS Financial Guidance Line, at 1-866-446-9377, offers free guidance on your options, and it's worth understanding them fully before making any choice.

Think about taxes

A job loss can change your taxes for the year.

• Severance is generally taxable income.
• Reemployment assistance is generally taxable for federal purposes. You can usually choose to have federal tax withheld.
• A lower-income year may mean a lower tax bracket, which can create planning opportunities. For some people, it can be a year to consider things like a Roth conversion. That's a decision to make carefully, with a tax professional.
• Job search expenses generally aren't deductible for most employees under current law.

Talk to your lenders early

If your runway is short, contact your lenders before you miss payments. Mortgage servicers, auto lenders, credit card companies, and student loan servicers often have hardship programs, forbearance, or modified payment options. They're usually much more flexible before you fall behind.

For federal student loans, an income-driven repayment plan can adjust your payment based on your lower income, sometimes to as low as $0.

Protect your credit

Try to make at least minimum payments on everything to protect your credit. If you have to choose, prioritize housing, utilities, insurance, and transportation you need to get to work.

Be careful with new debt

It can be tempting to use credit cards to keep life normal while you look for work. Be careful. High-interest debt taken on during a job search can linger long after you're working again.

Watch for scams

People who have just lost a job are frequent targets of scams, including fake job offers that ask for personal information or upfront payments, and unsolicited "investment opportunities." Legitimate employers don't ask you to pay to get a job.

A hypothetical household runway

Here's a simplified example of how the math can look. It's illustrative only.

Let's say a married couple in Central Florida has two incomes. One spouse is a teacher. The other works in sales for a private company and is laid off.

Their essential monthly expenses, covering the mortgage, utilities, groceries, car payments, insurance, and minimum debt payments, come to about $5,800.

After the layoff, here's what they have to work with:

• The teacher's take-home pay: about $3,600 a month
• Emergency savings: $12,000
• Severance: two months of pay, about $9,000 after taxes
• Reemployment assistance: up to $275 a week, roughly $1,190 a month, for up to 12 weeks

With the teacher's pay covering $3,600 of the $5,800, they're short about $2,200 a month. For the first three months, reemployment assistance covers about $1,190 of that, leaving a gap of roughly $1,000 a month. After that, the full $2,200 gap returns.

Their savings and severance total $21,000. At those rates, that could cover the gap for roughly 11 months, and longer if they trim some expenses.

That picture changes the conversation. Instead of panic, they know they have time to look for the right job instead of the first one. And they know exactly how much they'd gain by cutting a few hundred dollars from their monthly spending.

Your numbers will be different. The point is to run them.

Talking about it at home

A job loss affects the whole household, not just the person who lost the job.

• Talk openly with your partner about the budget, the runway, and the plan. Money stress is easier to carry together.
• Be honest with kids, at an age-appropriate level. Kids often sense stress. A simple, calm explanation that the family is adjusting spending for a while can help.
• Lean on your people. Friends, family, and former colleagues can offer support and, often, job leads.

Looking for the next job

The financial side is only half of it. A few thoughts on the search itself:

• Update your résumé and online profiles while details of your recent work are fresh.
• Reach out to your network. Many jobs are filled through personal connections.
• Use free resources. Florida offers career services through its workforce system, including job search help and training programs.
• Keep a routine. Structure helps both the job search and your well-being.
• Consider temporary or contract work, which can bring in income and sometimes lead to permanent roles. Earnings may affect your reemployment benefits, so it's worth understanding how.

When the new job comes

When you land a new job, a few things to do:

• Rebuild your emergency fund first. You now know exactly why it matters.
• Enroll in health coverage and understand when it starts.
• Start retirement contributions right away, especially if there's an employer match.
• Decide what to do with old retirement accounts, without rushing.
• Resist making up for lost time with spending. Give yourself a few months to stabilize before adding new commitments.

Preparing before it happens

If you're employed now, a few steps can make a future job loss much easier:

• Build an emergency fund, especially if your household depends on two incomes.
• Know your benefits, including what happens to them if you leave.
• Keep your résumé current and your network active.
• Keep debt manageable, so your fixed monthly costs are lower.
• Understand your partner's benefits, in case you need to switch to their health plan.

For dual-income households, it's worth asking: could we cover our essentials on one income for a while? If the answer is no, that's useful information, and something to work toward.

What I'm not going to do

I'm not going to tell you exactly what to do with your severance, your retirement accounts, or your health coverage. Those decisions depend on your household, your timeline, and your options.

What I will say is this. When it comes down to it, a job loss is hard enough without adding expensive mistakes on top of it. Slowing down, knowing your deadlines, and protecting your retirement savings can make the difference between a rough stretch and a lasting setback.

You don't have to figure this out alone

When a paycheck stops, there are a lot of decisions at once: severance, health coverage, retirement accounts, taxes, and how to stretch your savings. Having someone help you sort through them can take real weight off your shoulders.

That's the kind of help I provide. We'll look at your runway, your coverage options, what to do, and not do, with your retirement accounts, and how the change affects your household's bigger plan, including your spouse's pension or retirement benefits if they're a public employee.

I work as a fiduciary, which means I'm required to act in your best interest.

A job ends. Your plan doesn't have to.

Frequently asked questions

What should I do first after losing my job?

Get details about your final pay, severance, and benefits in writing, file for reemployment assistance, figure out how long your savings will last, and sort out health coverage before deadlines pass.

How much is unemployment in Florida?

Florida's Reemployment Assistance pays a maximum of $275 a week. For claims filed in 2025 or 2026, benefits generally last up to 12 weeks, based on a formula tied to the state's unemployment rate.

Should I cash out my 401(k) after losing my job?

Cashing out is usually the most expensive option, because withdrawals are generally taxable and may be subject to a 10% penalty before age 59½. Leaving the money in the plan or rolling it over are common alternatives.

What's the difference between COBRA and marketplace coverage?

COBRA lets you keep your former employer's plan, usually at full cost, for up to 18 months. Marketplace plans may be less expensive if you qualify for premium tax credits based on your household income. A spouse's employer plan may also be an option.

Is severance taxable?

Yes. Severance is generally taxable income.

Is unemployment taxable?

Unemployment benefits are generally taxable for federal income tax purposes. You can usually choose to have federal tax withheld.

Educational content only. Not individualized investment, tax, legal, or insurance advice. Benefit amounts and rules are current as of September 2026 and may change. Benowitz Wealth Management is a brand of Joy Financial Group LLC, a Florida state-registered investment adviser. Consult a qualified tax professional regarding your specific situation.

Neither Joy Financial Group LLC nor Benowitz Wealth Management is affiliated with, endorsed by, or employed by the Florida Retirement System, the Florida Division of Retirement, the State Board of Administration of Florida, MyFRS, or any government agency. FRS members may obtain free, unbiased guidance from the MyFRS Financial Guidance Line at 1-866-446-9377.