I know. I know. What does layoff planning have to do with early retirement planning? In a word, everything. If early retirement is your long term goal, then putting in safe guards to make you successful is key. Expect the unexpected.

In 2009, I was divorced AND lost my temp job (in the same week). The kids were really young, preschool and kindergarten. It was just the three of us. No job and worse no prospect of a job. I found another temp job in 2010 then lost it in 2011. I found another temp job in 2012 and lost that one in the same year – due to illness no less. It was a rollercoaster.

The kids got very good at living with less. I mean they didn't even notice I cancelled the cable! We hardly ever went out to dinner, and instead attended free events, had friends over and did pot luck dinners. We would also borrow movies or watched on Hulu (free at the time). We never felt like we lived without. To this date, my daughter looks back on those times and smiles.

Through these experiences I have developed a checklist of what to do to prepare for the unexpected. Having these things in place keeps me calm and focused on what I can control. Are you prepared?

Before Job Loss: Be proactive.

Emergency Fund: See Creating an emergency fund that is right for you.
Live on less. Live well below your means. Do this when you have a paycheck and save/invest the rest.
Pay off all debt ASAP. Debt is like a noose around your neck. Don't throw good money away on interest and penalties.
Get your resume up to date. doesn't matter if you have a permanent job or temporary… update your resume annually.
Get on LinkedIn. Make sure you update this as well. Don't get complacent, make sure you show off your accomplishments, rewards and ask coworkers for recommendations. Keep things fresh.
Keep up with your professional network. Attend seminars and meetups in your profession.
Shop around on job sites regularly, even if you are not seriously looking. Always know what the job market looks like in your area. My mom always told me “even Tarzan wouldn't swing from one tree to another unless he can see that tree.” In other words, its easier to find another job when you already have a job.
Build Passive Income. (see rental property checklist.) Having some extra income is always a good thing to build up in the event of job loss. Bonus, its also a nice way to feather out retirement.
Keep a running honey do list. I know this one sounds silly, but the first time I was left go, I didn't know what to do with all the free time. After that, I would keep a running to do list and the next two times I lost jobs I had plenty to keep me moving. Eventually I would find another job and have all kinds of things nailed down.

After Job Loss

OK, the unimaginable has happened. What to do?

Resume updated? If you haven't been keeping that up, start working on that.
LinkedIn Recommendations? Get this going too.
Talk to your HR department about your rights and what the package looks like (if you even get one). Make sure you are clear on any support they may offer (COBRA, resume writing, job hunting, etc…)
Calculate how long your emergency funds will last. Think total emergency funds divided by average monthly expenses. Add in any coverage from your package. Now you know how long you have to find another job.
Learn a new skill. Come on.. I know there is something (or many things) you have always wanted to try or learn. When you are not job hunting, why not take advantage of the down time. Plus it will keep your mind occupied, and you can add it to your resume and LinkedIn. Potential employers love that kind of thing.

Bottom Line: If you find yourself laid off, remember that its just a point in time, an event that happened. It does not define you, nor can it derail your plans. The worst thing that can happen is your early retirement date will be pushed out a little. Use your time wisely. Have an emergency fund to fall back on. Understand your rights with unemployment and work package. Work the checklist above. 😉

Monica Scudieri

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