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  • Doug Oosterhart, CFP®

Financial Planning During Buyouts and Layoffs

"As the old saying goes, "S**t happens." However, don't expect any logic in who gets laid off and who doesn't, or which department survives and which doesn't." - Susan Joyce

Personally, layoffs, lateral movements, buyout offers, and location changes have all hit close to home. Whether it's GM, other auto-makers, other industries, my immediate family, friends, or clients, they have all been affected.

Sure, it's "easy" to run the numbers behind the, "Will I be okay?" question that I get asked by clients when evaluating their situations. What I find to be MOST important to clients is peace of mind. I talk to all clients about planning for life's transitions - known and unknown. It's NOT about what return their portfolio got last year (and frankly never should be), it's about how long their health insurance will continue or if they still have the life insurance they had at their now previous employer. It's about figuring out benefits at their new employer and making sure that their reserves will provide adequate resources during their transition.

Sometimes clients simply just need to have a conversation and get organized. Life gets busy and things become unorganized - it's just a fact. Stress is at an all time high, there are a lot of questions and unknowns. Helping clients talk through their situations and simply being a listening ear provides a value that's way over-and-above last year's portfolio return. That's what financial planning is all about. Navigating the known and unknown life changes. Even if you don't know what curve balls life will throw at you, there are things you can be proactive about to be the best prepared whenever the time comes.

In the past couple of days, I've had conversations where clients have displayed emotion on a level that doesn't happen often. Frankly, part of my career consists of being an emotional and behavior coach. What makes it worth it is knowing that after clients implement a plan, they genuinely feel better. So when, "S**t happens," they are prepared.

Here are two things to do/keep in mind:

Health Insurance: Generally, there are options to continue your health insurance coverage under COBRA for a limited period of time.

401(k) Decisions: Sometimes a 401(k) rollover to an IRA might *not* make sense if leave a company between 55 and 59 and-a-half. There are certain rules that allow distributions from a 401(k) between ages 55-59 where the participant will not be subject to the 10% penalty that would be accessed otherwise.

Both things above should be discussed with a CERTIFIED FINANCIAL PLANNER™ before any decisions are made. There are planners out there open and willing to discuss.

For any questions or to schedule a call, please email:

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