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Transitioning Jobs, Managing Your Finances By Larry N. Grogan Downsizing, layoffs and second jobs are terms we’re all familiar with and must sometimes deal with. In addition to the normal stresses of finding, accepting and starting a new job, you may also feel the strain of emotional and financial pressures. Whatever your circumstances, a positive attitude is vital to your job search and your ultimate success. Managing emotions If you’ve experienced a job loss recently, you may feel a sense of betrayal, sadness or anger — quite possibly all three. Additionally, you may be anxious about your financial situation. Displaced professionals can be left with dashed hopes, worthless stock-option packages, and no paycheck. If you’re returning to the workforce after an extended family leave or early retirement, you may also be worried about how your qualifications will stack up in the current marketplace. You control your emotions, so choose to be upbeat and optimistic, and re-entry into the workforce can go more smoothly. Getting back into the swing of things If you left work to go back to school, you will find an abundance of resources to help ease your transition back into the workforce. Check out the school library for Internet access to job sites and company Web sites. And use the school’s placement or career guidance office. If you’ve taken a few years off to raise a family, catching up to the marketplace may be a challenge. Use your network of contacts from previous employers, neighbors and professional organizations. In fact, joining a professional organization in your field is a good tactic for any job hunter. These organizations often have career seminars or networking events. Seniors returning to the workforce More and more, older retirees are returning to the workforce. Some are starting new jobs, while others are increasing the hours of their existing part-time jobs. In the past, seniors had turned down employer requests to work more hours because of the Social Security earnings limit, which penalized people age 65 to 69 who earned more than a certain amount. Not anymore. Legislation passed in April 2000 changed how your benefits are affected if you continue to work. Starting with the month you reach full retirement (age 65), you can receive your full Social Security benefits with no limit on your earnings. Some of these “working retirees” will be drawing money from multiple sources: Individual Retirement Accounts (IRAs), pension plans and Social Security, as well as from a regular salary. Managing assets may become a challenge, unless you have a good investment professional to guide you through the process. 20 ieee-usa eBooks
Severance package planning Laid-off workers usually have some kind of severance package. If you received a lump-sum payment, invest it wisely. You’ll need this money to live on, but you can also make it work for you. Balance your short-term needs with your long-term objectives. If you’ve invested wisely and your job search goes well, you may be able to find new employment before the severance check runs dry. If you were guaranteed a bonus in your employment contract, check the provisions of your contract to make sure you get what you’re entitled to. And again, invest that money wisely. Managing money after a job loss Reduce spending, where possible. Start by cutting down on discretionary items such as eating out, entertainment, cable TV or gifts. Resist using credit cards. Pay the most important bills first. Mortgage or rent, utilities, car payment and groceries are usually the big ones. Consolidate debt, if possible. Establish a budget of monthly expenses. Start by calculating your average monthly cash flow, which shows the amount of income that’s left after paying your expenses. (Use the worksheet at the end of this article.) Understanding your cash flow will help you set a realistic budget. Resist tapping into your retirement savings, even if money becomes tight. If you cash out your IRA or 401(k) plan, you’ll lose a lot of it to taxes; and if you’re under age 59 1/2, you may face penalties as well. The following example illustrates the disadvantages associated with withdrawing money early from a 401(k) plan. You’ve accumulated $100,000 in your 401(k) plan. You’re 45 years old and decide to withdraw $10,000. Withdrawal amount $10,000 10% penalty $1,000 25% federal tax $2,500 5% state tax $500 Net amount after taxes and penalty $6,000 Applying for state unemployment benefits is essential. The taxes we all pay to support such programs are intended for these very situations, so take advantage of these programs. The benefit duration is at least 26 weeks. Remember that this benefit is taxable, so you’ll have to report it as part of your gross income on your federal income tax return. Contact your state’s unemployment office for more information, especially regarding applicable state taxes. Contact your creditors to negotiate lower payments or interest-free payments. Don’t wait until you’re behind on your payments or your creditors may be less flexible. Keep a list of everyone you speak with and when. Follow up with confirmation letters about your discussions, conclusions and actions to be taken. The Best of Today’s Engineer: On Career Survival 21
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Page 11 and 12: • group placed HP in the top 0.5
Page 13 and 14: Build Your Network Purposefully —
Page 15 and 16: Seeking a New Job? Think Like an Em
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Page 23 and 24: Five Steps to a New Job By Debra Fe
Page 25 and 26: Jump Start Your Job Search by Debra
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Page 35 and 36: Finding Employment in an Economic D
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