Unemployed or Furloughed - Now What?
by Jon Flaherty
Since March 20th, the U.S. Labor Department has recorded around 39 million initial unemployment claims through the middle of May. The unemployment claims have been trending down, but for nine weeks and counting the number of initial jobless claims has been in the millions each week. While states are starting to reopen, it could still take some time for jobs to fully recover.
For those fortunate enough to be working or even heading back to work soon, another concern is job security. My article, Prepare for a Layoff, can offer some direction should this be a concern going forward.
For those that are out of work, or even if you know friends or family that are unemployed or furloughed, what steps can be taken? The first step is to assess your current finances. Revisit your budget to understand how much you are spending each month and look through those expenses to see if anything can be suspended for the time being. Once you have an idea of your monthly outflow, compare that with your current cash on hand and other assets that could provide liquidity to help determine how many months you are able to cover.
One way to help extend your coverage is to file an unemployment insurance claim. Each state has a different process and eligibility, but a great place to start is by visiting the US Department of Labor webpage, https://www.dol.gov/general/topic/unemployment-insurance. Here you will find a high level description of unemployment insurance as well as a link to the state where you worked. Under the current law established by the CARES Act, unemployment insurance payments have been increased an additional $600 per week through July 31st. The weekly increase is being discussed by Congress, so the timeframe for how long this additional benefit will last could change.
The CARES Act also extended the number of weeks you can file a claim by an additional 13 weeks. For example, in Illinois the existing program allows an unemployed worker to file and receive benefits for up to 26 weeks during one calendar year. Due to the CARES Act the unemployment benefit can now be claimed for a total of 39 weeks.
How many months of coverage you have available can help determine your best strategy for moving forward. Should you have several months of cash to draw on then you can take time to see if your job returns or even search for employment of your choice. If your cash is running out, you may need to find work in another industry for the time being to help make ends meet.
There are a few other strategies to consider that include home equity loans or tapping your retirement accounts, but you should fully understand the ramifications of using such options before pursuing them. If you would like to discuss unemployment benefits or need help in assessing your current finances, then please reach out to me at firstname.lastname@example.org.
The facts and opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Where applicable, all data and information has been gathered from sources believed to be accurate such as the internet, nonaffiliated 3rd parties, news articles and professional subscriptions but this information is not warranted to be correct, complete or true. Vantage Financial Partners Limited, Inc. and its agents are not tax advisors or accountants. We strongly encourage you review your tax situation, opportunities and liabilities with your tax advisor before making any changes. This article is not intended as tax advice.