A Guide to Navigating Your Way Through Job Loss
Job loss can be devastating emotionally and financially. This checklist includes practical tips and resources that can help you cope through this transitional period and plan for the future.
Each topic expands to a list of statements below. To get more information from the statement, click the plus sign to receive some helpful tips.
You can also view our webinar on job loss.
Financial Considerations
I have a financial record-keeping system in place to track income and expenses.
One of the best ways to begin taking control of your financial future is to organize your personal records. Get your financial house in order by locating and organizing all of your financial documents, then creating a filing system for them. Include information on bank and investment accounts, insurance policy numbers, and key legal documents, such as your will or stock certificates. Storing the documents in one secure place will help you keep tabs on your records and make it easier for you and loved ones to respond to financial matters in an emergency.
I have a household spending plan or budget, and I use it.
An important way to gain control over your financial future is to develop a household budget. If you have a spending plan, you are more likely to avoid the temptation and pitfalls of living beyond your means. Online tools can help you create a household budget and track your expenditures.
Evaluate adjusting your spouse's income-tax withholding for more cash now rather than a refund later. Download a W4 form from the IRS Web Site.
I have reviewed my budget to find ways to reduce expenses.
There are many ways to cut costs and save money. Examples include dining out less, dropping premium cable TV, evaluating your collision coverage on an older vehicle, searching for the lowest gas prices at Gas Buddy or Gas Price Watch, and asking your doctor about generic equivalents to your prescriptions. Discover these tips for reducing your monthly expenses. Join AARP Online Community groups that share money-stretching tips, such as Make Ends Meet. For long-term ways to save money and other helpful resources, visit AARP's Real Relief.
I have contacted my home-mortgage lender to see if I am eligible for refinancing or payment reductions.
In addition to your current lender, counselors at the “Making Home Affordable” program may be able to help you. The plan has two key components: a refinancing program for borrowers who want to refinance but have little equity in their homes, and a mortgage-modification program to help reduce mortgage payments for at-risk or struggling homeowners.
I have identified ways to reduce debt.
Let your credit-card and car-loan companies know about your job loss. Find out whether or not your creditors offer grace periods that allow you to defer payments. Call your credit-card company and request a lower interest rate. Hold off on adding more debt to your credit cards. Pay your bills on time to avoid late charges that add to your debt burden, and pay more than the minimum payment. Check to see if you have paid for credit insurance, which will help with payments when you lose your job.
I have applied for unemployment insurance.
If you are unemployed through no fault of your own, you may be eligible for unemployment insurance. This benefit is based on a percentage of your work earnings, up to a maximum amount set by your state. In most states, unemployment insurance is paid for a maximum of 26 weeks. The 2009 stimulus bill increased weekly insurance by $25 (through the end of the year) and extended the maximum number of weeks for insurance coverage. If you receive unemployment insurance in 2009, a tax break will allow you to exclude the first $2,400 from your net income. You can find your state unemployment insurance office online and learn more about unemployment insurance. In some states, you can now file by telephone or via the Internet.
I have taken steps to determine whether or not I qualify for public benefits programs (other than unemployment insurance).
Find out if you qualify for public benefits programs to help pay for food, utilities, health care, and medicine by using an easy, online screening tool. Visit Benefits QuickLINK to learn more. If you are a grandparent caring for a grandchild or grandchildren, you may be eligible for public benefits programs. AARP also has a list of additional resources for grandparents.
I have verified the status of my employer-funded pension plan.
If you are covered under a defined-benefit plan, commonly referred to as a pension, your employer guarantees that you will receive a specific amount of money when you retire. The amount of your pension depends on your wages and years of service. Usually, you have to work a minimum number of years before you "vest in," or become eligible for, a pension. Most pension programs will send you a monthly check, although other options may be available, such as a lump-sum payment. Pensions are insured by the federal government. For more information, visit www.dol.gov. If your former employer has declared bankruptcy, it could affect your pension benefits. Contact your former employer’s HR department to find out whether your pension payments will be paid through the organization. If your former employer has suspended pension payments, determine whether the Pension Benefit Guaranty Corporation (PBGC) will assume this obligation. Generally, the PBGC guarantees most retirement benefits, although some limitations may apply.
I have decided where to maintain my 401(k) or other workplace retirement savings plan.
Decide whether to leave the money in your existing retirement savings plan (if allowed) or to transfer it to a rollover Individual Retirement Account (IRA). If you maintain your existing retirement savings plan through your former employer and get another job, ask your new employer if you can roll it over. To avoid paying taxes and penalty fees on your retirement savings, roll over your retirement savings from your former employer to your new employer when you have secured a new job.
I have decided to only tap into my 401(k) or other retirement savings plan as a last resort.
If you need money to cover personal or household expenses, avoid the temptation to cash out your retirement savings if at all possible. Typically, it is better to leave your money in an employer-sponsored plan or roll it over to an IRA. With a cash-out, you'll pay significant taxes, including regular income taxes and a penalty (if you're under age 59 ½). If you need to draw on your 401(k) and you're 59 ½ or older, you can establish a minimum distribution amount to avoid penalties. For more information, visit AARP.org's Money section.
I have assessed whether or not I should apply for Social Security benefits.
Health Considerations
I have applied for COBRA or found alternative health insurance.
If you are about to lose your health insurance or have lost your employer-sponsored health insurance, see if you qualify for coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Under COBRA, you can keep your group health insurance coverage for up to 18 months if you lose or quit your job or have your work hours reduced. If you didn't sign up for COBRA when you were laid off, you have 60 days in which to sign up. Changes to COBRA made through the 2009 stimulus bill lower the costs you will pay for continuing coverage through COBRA.
If you do not have health insurance through your employer, get the best individual health insurance you can afford. Compare quotes for various policies.
I have determined whether I am eligible for Medicaid or Medicare.
If you are 65 or over, you are covered by Medicare. You may need supplemental insurance to cover prescriptions and expenses not covered by Medicare. If you are under age 65, see if you can secure coverage under a spouse's or partner's plan.
You may also be eligible for Medicaid, a partnership between the federal and state governments, which helps people with low incomes pay for medical expenses. To qualify for Medicaid, you must meet the income and resource guidelines in your particular state; contact your state Medicaid office to determine whether or not you are eligible. For more information, visit the Centers for Medicare and Medicaid Services Web site.
I take time daily to engage in stress-relieving physical activity.
Work out your stress with physical activity. A brisk walk, game of tennis, or fitness class helps you let off steam, distracts you from your sources of stress, and improves your mood. It also relaxes and re-energizes your body. People who are routinely active tend to eat better. And a healthy diet also helps your body manage stress better. Other steps for good health include being tobacco-free, and if you drink alcohol, doing so in moderation. Visit AARP.org's Healthy Living channel for more information on managing stress. You can also track your physical-activity steps on AARP’s free online program, Step Up To Better Health.
I have made a commitment to take my prescribed medicines.
I have made a commitment to take my prescribed medicines. While dropping your prescribed medications may be tempting to save some money, managing your health, especially during difficult times, is important. To find ways to save money consider patient assistance programs or visit or the Partnership for Prescription Assistance.
Job Search Considerations
I have assessed my job skills and preferences.
A successful job search starts with a self-assessment. Before jumping into your job search, know what you're looking for in a position, industry, benefits, location, and schedule. Assess your skills, and know how they relate to the jobs you're interested in doing. Many free assessment tools are available online. Most staffing companies (or temporary agencies) offer skills assessment as part of their services. It’s also important to identify your “transferable skills,” which could mean you are already prepared for certain new jobs or fields. You can learn and practice “transferable skills” on the job and by volunteering and pursuing personal interests. To learn more, visit Quint Careers.
Your local One-Stop Career Center is another important resource. Funded by the Department of Labor, local centers offer such services as assessment, training, and job-search assistance. AARP.org has information on assessment, career counselors and coaches, and self-employment options. AARP Foundation WorkSearch offers assessment and training to eligible job seekers. It also offers the Senior Community Service Employment Program (SCSEP) for low-income people over 55.
I have researched jobs and employers that interest me.
Learn about the job market in your target area. Which industries need workers? Who is hiring? Follow the business news daily to track which businesses are expanding or contracting. If your ideal job is in a field with declining employment, look for other industries and jobs that use similar skills. Professional associations, local business groups, and online and print news media are additional resources to consult about your area job market
Find out which employers are hiring by looking at online job boards, but be aware that the right person is more likely to see your résumé if you apply directly through employers' Web sites. Here are some tips for researching jobs and employers. More career-exploration tools can be found at Career One Stop.
Find out where the stimulus money is going to create jobs in your state.
I have created a basic cover letter and résumé that can be tailored to different positions.
Many résumés fall flat because they simply list past experience and job duties. To make your resume and cover letter stand out, present yourself as someone who gets results. Highlight your accomplishments. Quantify them in numbers and dollars. Include only those achievements that relate to the job for which you’re applying.
Consider using a "functional" résumé style that lists your accomplishments by skill area, adding a brief, chronological job history. To draw attention to your résumé, sprinkle keywords—specific terms used in the job posting and industry—throughout. Even if you use the right keywords, simply posting your résumé on the big job boards is not likely to get a large response. Be sure to check the many "niche" job boards, which focus on a particular industry or type of job.
AARP.org's Work section has advice on résumés and cover letters as well as a career column and Job Tips for 50+ Workers.
Résumé help is also available at RetirementJobs.com, and sample résumés and cover letters are available on many employment sites, such as CareerBuilder, Monster, and Quintessential Careers.
I have identified ways to update my skills or to learn new ones.
By keeping your skills current, you show that you are up to date in your chosen field and can compete with job applicants of any age. Highlight pertinent training and certifications in your résumé, especially if you need to show that your technological skills are current. If your computer skills are shaky, this is a good time to strengthen them. Take online tutorials, find classes at community centers in your area, or visit your local One-Stop Career Center
Other ways to keep learning and stay current in your field while you're unemployed include classes, workshops, and meetings of professional associations (all of which are also networking venues). Many staffing firms (often called temporary agencies) offer training and temporary jobs that allow you to “try out” different kinds of jobs while earning needed cash. Look into programs offered by community colleges. To find training programs in your area, go to Career One-Stop. Finally, consider volunteering as a way to learn or sharpen your skills. Find opportunities at AARP’s Create The Good, or look into federally funded national-service programs, such as AmeriCorps.
I have created a daily schedule of activities to keep my job search going.
Finding employment is a job in itself. In the initial stages of job loss, you may not be ready to launch a full-scale search. At first, you can concentrate on taking care of yourself, seeking support, and assessing your finances. As you move into full job-search mode, set up a workspace with computer, phone, and the supplies you’ll need. Set a start and end time to your day, being sure to include time for yourself and your family. You may be tempted to start off by blanketing the job boards with your résumé, but it’s much more effective to target the jobs, industries, and employers you are interested in. Constantly polish your résumé, tailoring it to the different positions you apply for. Vary your schedule to maintain your energy. Your daily activities might include researching employers, attending a networking meeting, writing a cover letter, talking to a friend for support, reading the business news, and taking a walk. The Web is packed with helpful career sites, blogs, and podcasts that can help you stay on track. Find tips on job-search strategies and a list of employment Web sites.
I have developed my "elevator speech."
An “elevator speech” is a brief commercial for yourself; it is a verbal snapshot of your key qualifications, achievements, and goals. Because all generations are competing in a tight job market, you need to show clearly what sets you apart.
If you have an "elevator speech," you won’t have to grope for words to describe yourself. You'll be ready at any time with examples and success stories that say, "This is who I am and what I do." A good elevator speech reflects your "personal brand," that is, the unique skills, abilities, and achievements that make you stand out in a crowd. An elevator speech is also an opportunity to show your positive attitude, energy level, and communication skills. Learn more about these introductory speeches and personal branding. Quintessential Careers offers a Career-Branding Tutorial.
I have a network of people I can go to for personal and professional support.
Making connections is probably the most important part of your job search. If you can, make networking a part of your schedule every day
Start by making a list of everyone who could possibly help you: work contacts, family, friends, neighbors, and community contacts. Keep a record of to whom you spoke and when. Each person you reach is a potential source of additional contacts.
In addition to in-person networking, seek out networking opportunities on the Web. At the Water Cooler, AARP’s Online Community for job seekers age-50+, you can share advice, resources, and support with others in your position. You can also post your profile on large networking sites, such as LinkedIn (professional focus) and Facebook (personal networking). Increasingly, employers are looking online to find job applicants, so make yourself “findable,” even by starting your own Web site if you wish. But don't spend all your time online. Personal contact, face-to-face or by phone, is still indispensable as an avenue to job leads. Here are more tips for successful networking.
I have changed my job-hunting strategy to get better results with my search.
If your job hunt is not panning out the way you want it to, it may be time to change your approach. Especially in a down economy where jobs are scarcer, you may need to make trade-offs. Go back to your self-assessment and review your priorities. Decide what's most important at this stage—salary, location, schedule, type of work, or position. Learn how others have dealt with the challenges of job; visit AARP.org's online community group, The Water Cooler.
This may be a time to consider a stop-gap job to bring in needed cash, or to find a job coach or counselor to help you sort through your options. If you want to work in a different occupation or industry, retool your résumé to show the transferable skills that carry over from one field to another. If you’re considering starting your own business, plan carefully. AARP.org offers resources on creating your business and becoming self-employed, as does SCORE.
Emotional Support Considerations
I work at maintaining a positive, upbeat attitude.
Job loss can be a frightening and stressful experience. While it is normal to experience feelings of denial, anger, and sadness, try to maintain a positive outlook. Take care of yourself by eating properly, getting plenty of rest and exercise, and seeking out emotional support. Remind yourself that this is a temporary situation that may present new opportunities to you. Learn about typical reactions to job loss.
I regularly spend quality time with my family or friends, participage in hobbies and/or volunteer in my community.
While you are focused on searching for a new position, remember to take time to replenish yourself. Plan fun, inexpensive activities with your family and friends, volunteer in your community, enroll in a class, and/or find community support through your place of worship.
I have a family member, friend or emergency contact I can call if I should feel overwhelmed.
If worries about finances, finding a new job, or other matters become overwhelming, reach out to someone in whom you can confide to help you get through difficult times. The American Red Cross, the Salvation Army, and United Way are helpful resources. The National Suicide Prevention Lifeline is a 24-hour, toll-free suicide prevention service available to anyone in crisis. If you need help, call 1-800-272-TALK (8255) or 1-800-799-4TTY (4889).
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