For years, healthcare has felt like one of the more stable career paths. People will always need nurses, technicians, administrators, therapists, and other medical professionals, right?
But “stable industry” doesn’t necessarily mean “stable job.”
That has become especially clear in Kern County. This summer, layoffs and staffing changes were announced at two of the area’s major hospital systems, affecting healthcare workers in Bakersfield and elsewhere in the county.
If layoffs are happening in your industry - or even being whispered about in the break room - it’s natural to worry. But this is also a time when a little financial preparation can make a big difference.
You don’t need to assume the worst. You do want to know what you would do if your paycheck suddenly stopped.
Start Building Your “Just in Case” Cash
If your job feels less secure than it did six months ago, temporarily increasing your cash reserves may be more important than some of your other financial goals.
Look at how much you would need each month to cover the essentials: housing, groceries, utilities, insurance, transportation, minimum debt payments, and healthcare. Then ask yourself how many months you could cover with the cash you currently have available.
If that number makes you uncomfortable, consider directing more money toward savings for the time being. This isn't necessarily a permanent change. Think of it as strengthening your financial buffer while there's more uncertainty around your income.
Know What Happens to Your Health Insurance
For healthcare workers in particular, there’s a certain irony in losing a job and suddenly having to worry about healthcare coverage.
Depending on your situation, you may be able to continue your employer coverage through COBRA, join a spouse’s employer plan, or purchase coverage through the health insurance marketplace. COBRA can allow you to keep the same coverage temporarily, but you may be responsible for the entire premium plus an administrative fee, making it considerably more expensive than it was while you were employed.
There are deadlines involved, too. For example, you generally have 60 days to elect COBRA, while joining a spouse's employer plan through special enrollment generally requires action within 30 days of losing your existing coverage.
Don’t automatically choose the option that feels easiest. Compare premiums, deductibles, prescription coverage, provider networks, and your family's anticipated medical needs.
Don't Automatically Cash Out Your 401(k)
When income disappears, a retirement account can suddenly look like a very large emergency fund. Try not to treat it that way without understanding the consequences.
After leaving an employer, you may have several choices for your workplace retirement account, including:
- Leaving the money in the existing plan
- Rolling it into a new employer’s plan if permitted
- Rolling it into an IRA
- Taking a distribution
It’s important to note that taking the money as cash can trigger income taxes and, depending on your age and circumstances, an additional early-distribution tax.
Remember: A layoff doesn't mean you have to make an immediate decision about your investments. Give yourself time to understand your choices.
Apply for Unemployment—Even If You Hope You Won't Need It Long
California workers who lose their jobs and meet eligibility requirements may qualify for unemployment insurance through the state's Employment Development Department. Claims can be filed through UI Online, by phone, or through a paper application.
You may land another position quickly. That's great. But don't assume that means there's no reason to apply. Unemployment benefits can help preserve your emergency savings while you're figuring out what comes next.
Don't Let a Job Loss Turn into an Investment Decision
This is an easy trap to fall into. You lose your job. You feel uncertain about the economy. You start watching the markets more closely. Suddenly, selling investments feels like another way to “get safe.”
But your employment situation and your long-term investment strategy are two separate things.
You may need to adjust your short-term cash-flow plan after a layoff, but that doesn't automatically mean your long-term portfolio needs to change. Selling investments because you're scared can lock in losses or disrupt a strategy designed around goals that may still be years away.
Before making a major investment move, ask yourself: Has my long-term plan changed, or am I reacting to a very stressful week?
Prepare Before There's a Crisis
One of the best times to create a layoff plan is while you're still employed.
If you're concerned about changes in Bakersfield's healthcare industry, you can start now: build cash, review your monthly expenses, understand your benefits, locate your retirement plan information, and think through what you would cut first if your income changed.
You don't have to predict whether a layoff is coming. You just need to make sure that if it does, you have choices.
At Charpentier Wealth Strategies, we can help you look at the bigger financial picture, from emergency savings and retirement accounts to insurance, taxes, and investment decisions, so an unexpected career change doesn't have to derail your long-term plans.
CLICK HERE to make an appointment.