AT&T is one of the biggest America’s largest corporations. As such, AT&T layoffs are not uncommon.
Unfortunately, major companies like AT&T rarely give employees much advance notice. So, what should you do if you find yourself suddenly laid off?
Unless you can retire comfortably, your primary concern is likely how you’re going to get by before you find a new job. Here are 8 financial steps that’ll help you survive an AT&T layoff.
1. Sign up for unemployment
Unemployment benefits can help make sure that your essential household expenses are covered. Keep in mind that unemployment rules vary by state. Some states may not pay unemployment benefits if you receive a severance, SIPP or surplus payment. In addition, some states may reduce your unemployment benefit by the AT&T pension amount you are entitled to – even though you may not be receiving your pension.
2. Update your financial plan – or get one
A layoff may mean some changes in your lifestyle, at least in the short run. With the uncertainty of when you’ll start working again, it can make for a confusing and stressful time. Talk with a financial adviser and put together a written plan that helps you navigate your options. It can provide some much-needed reassurance that you’re making the right decisions to lessen the financial and emotional impact of unemployment.
3. Explore AT&T severance, sipp and surplus options
If you are receiving a severance, SIPP or surplus payment, these often have several different payout options. You should consider carefully the tax and cash flow implications of each one. Talk with a financial adviser who understands AT&T’s benefits and can evaluate your situation to make sure you are selecting the right option.
4. Preserve your money and avoid debt
At this time, you should think about putting all major purchases on hold. Just focus on your essential expenses (mortgage, car payment, electricity, etc.). Getting through a period of unemployment is all about properly managing your cash flow. Your savings need to last until you get a new job. New debt payments will squeeze your cash flow. So, resist the urge to use credit cards on anything that isn’t an absolute necessity.
5. Cut expenses, if possible
Hopefully, your period of unemployment is short. But, it could last for months and, in some extreme cases, even years. Therefore, you have to stay on top of your budget. Review your monthly expenses and identify any you can reduce or eliminate. You’ll need to get accustomed to living on a lower income for the time being.
6. Leave your AT&T 401(k) and retirement accounts alone
It can be really tempting to dip into your AT&T 401(k) and other retirement savings to ease the pain of a layoff. Unless you are ready to retire, don’t do it. Withdrawing money from your retirement accounts prior to your planned retirement date could mean having to work longer or scaling back your retirement goals. There are also tax consequences and early withdrawal penalties, if you take money out before age 59 ½.
7. Review your AT&T pension
If you have worked long enough at AT&T, you are likely entitled to a pension benefit with several different payout options. Is it better to select a monthly pension or lump sum? Should you start your pension now or wait until later?
The answers really depend on where you are in your career and when you plan to retire. Not to mention personal factors, such as your marital status and other sources of retirement income. A qualified financial adviser with knowledge of the AT&T pension plan can help you determine the best option based on your long-term financial goals.
8. Maintain health coverage
Medical bills are the biggest cause of bankruptcy in the United States. Even without a job, you may still have options available to you for health insurance. If you are married, you may be able to join your spouse’s employer plan. Or, since AT&T is a large company, you may qualify for COBRA. Another option is to shop around on the Affordable Care Act Exchange.
You should look at more than just the premium when evaluating health insurance. Examine the quality of coverage, deductibles, co-pays and out-of-pocket expenses. If you have a choice, make sure to pick a plan that gives you the coverage you need first and then shop on price.