A sudden layoff can be one of life’s most stressful events—financially, emotionally, and mentally. Whether it’s due to restructuring, downsizing, or unforeseen economic shifts, being laid off can feel like losing your financial footing, especially when retirement is on the horizon.

At 1st Choice Financial Services, Inc., we’ve helped countless individuals and families throughout Central Pennsylvania make confident financial decisions even in times of uncertainty.

This guide covers practical next steps after a layoff, how it could affect your retirement savings, and ways to stay in control and protect your retirement goals.

Your First Financial Moves After a Layoff

A job loss affects more than your paycheck, so it’s important to take a deep breath and focus on the actions you can control.

Take a Breath and Take Stock

Before making any financial decisions, assess your immediate resources:

• Severance package: Review the terms and payout schedule. Some severance plans may include continued benefits for a set period.
• Unemployment eligibility: File promptly to begin receiving benefits if you’re eligible. You can check the PA Unemployment Compensation site for more info.
• Health insurance: Explore COBRA, your spouse’s plan, or ACA marketplace options. Delaying coverage can result in high out-of-pocket costs.

Tighten the Budget

Adjusting your spending is one of the quickest ways to regain a sense of control. Consider a temporary lean budget that focuses on essentials:

• Housing and utilities
• Food and transportation
• Minimum loan or credit card payments

Pausing discretionary spending—even briefly—can help preserve cash flow while you assess your next steps. If you’re within a few years of retirement, these decisions may also help preserve your savings in the long term.

The Impact of a Layoff on Your Retirement

A layoff raises important questions about your retirement planning in Pennsylvania. Some of the most immediate concerns after a layoff include what to do with your employer-sponsored retirement plan, how to manage any vested pension benefits, and when to begin receiving Social Security.

Understand Your Retirement Account Options

If you had access to a 401(k), 403(b), or 457(b) through your former employer, you may be able to choose from the following:

• Leave it with your former employer: If you’re allowed to do this, you’ll want to consider fees, limited investment options, lack of personal advice, and ease of access.

• Roll it into an IRA: A rollover can provide you with more control over your investment choices and access to professional assistance. It may also simplify account management if you consolidate other retirement savings.

• Cash it out: While it may seem like a quick solution, cashing out your retirement funds often triggers taxes and early withdrawal penalties. This option can significantly reduce your long-term savings and is rarely the most beneficial choice.

Each option has pros and cons depending on your age, account balance, tax situation, and future employment plans.

If you’re uncertain, a retirement advisor in Harrisburg, PA can discuss the available options and help you avoid costly mistakes. For example, they may help you evaluate whether a Roth IRA conversion is appropriate or if partial withdrawals could be structured to reduce your tax liability.

What About Pensions?

If your employer offered a pension, now is the time to review your vested benefits. Depending on your age and plan type, you may be eligible for either a monthly benefit starting at a future date or a lump-sum payout.

If a lump sum is offered, you may have the opportunity to roll it into an IRA, thereby avoiding immediate taxation and preserving its tax-deferred growth potential. Similar to a 401(k), a pension rollover—when handled properly—can be completed tax-free. However, the process must be done as a direct rollover to avoid penalties or taxable distributions.

Social Security Timing

If you’re in your early 60s, the decision of when to begin Social Security benefits may be affected by a layoff. Evaluate carefully whether it makes sense to start claiming benefits now or to delay in order to receive a higher monthly amount later.

Get Guidance That Matches Your Retirement Goals

During uncertain times, it’s easy to feel pressure to make quick decisions, especially when your financial future is on the line. That’s why many people find value in working with a retirement advisor in Central Pennsylvania who can offer objective insight.

An experienced advisor can help you:

• Review your employer-sponsored retirement plan options—such as rolling over your 401(k) or evaluating tax-smart withdrawal strategies.
• Compare pension benefits, including lump-sum versus monthly payout options and potential IRA rollovers.
• Evaluate Social Security timing and how it fits into your broader income plan.
• Analyze how a layoff affects your retirement plan and identify ways to adjust your timeline or contribution strategy.
• Revisit your investment mix to match your risk tolerance and income needs for this new stage of life.
• Assess additional income opportunities to reduce pressure on your retirement accounts.

At 1st Choice Financial Services, Inc., we take a holistic approach to wealth management in Harrisburg and the surrounding areas. If you’re facing a job loss, we help you see the big picture while focusing on the details that matter—taxes, market performance, Social Security timing, and more.

We understand that no two situations are the same, and we provide personalized guidance based on your unique goals and circumstances.

About 1st Choice Financial Services

At 1st Choice Financial Services, we understand how a layoff can disrupt your sense of financial stability, but we also believe it can be a turning point. With support from the right advisor, this period can become the start of a more focused, secure, and thoughtful retirement strategy.

As experienced retirement planning specialists in Central Pennsylvania, our team works with clients at all stages of life, especially those navigating unexpected life changes. We’re headquartered in Camp Hill and serve communities throughout Harrisburg, Hershey, Halifax, Enola, Lancaster, Lebanon, Mechanicsburg, and beyond.

If you’re looking for a trusted voice to help you make confident financial decisions after a job loss and protect the retirement you’ve worked so hard to build, we invite you to reach out.

Contact us today to schedule a no-obligation consultation with a retirement advisor who understands your needs—and your community.

Investment advisory services offered through Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser. The views, statements and opinions expressed herein are those of the  1st Choice Financial, and not necessarily of Foundations or their affiliates.  The content provided is for educational purposes only and the views reflected are subject to change at any time without notice.   No investment, legal or tax advice is provided.    Always consult with a professional.  Foundations deems reliable any statistical data or information obtained from  third party sources that is included in this article,  but in no way guarantees its accuracy or completeness.