Laid Off? The First-90-Days Money Plan

A layoff feels like a fall — but the first 90 days are mostly paperwork and deadlines, and doing them in the right order can be worth thousands. File for unemployment in week one, don't sign severance on day one, protect your health cover before it lapses, and freeze (don't raid) your retirement account. Here is the calm, in-order plan, with the US, UK and Canada specifics.

Week 1: file for unemployment — do not wait

File the week you are laid off, even if you expect severance. Most state systems date your claim to the filing week, not the layoff week — every week you wait is a week of benefits you may never recover. In Canada this is especially urgent because a new EI Pilot Project (No. 25) is running for claims starting 11 October 2026 – 9 October 2027: the usual one-week waiting period is waived and severance does not delay your EI, with up to 20 extra weeks for long-tenured workers (to about June 2027). In the UK, claim Universal Credit or new-style Jobseeker's Allowance as soon as your last pay stops — both can be claimed online while you look.

The severance letter: read it like a contract

• Median severance in 2026 is 10–14 weeks of pay — down from about 19 weeks in 2023. Know the market rate before you accept.
• If you are 40 or older, US law gives you 21 days to review a severance release and 7 days to revoke after signing. Use the time; have someone experienced read it.
• Severance can delay unemployment benefits in some states (Florida, Texas, Pennsylvania, Ohio can treat it as wages for those weeks; California does not). And it can push your household income over the ACA subsidy cliff (back to 400% of the poverty level for 2027) — a bigger severance can cost you health-cover help. Plan the timing with this in mind.
• Negotiate what you can: an extra few weeks of pay, extended health cover, outplacement help, and a written reference. The worst outcome of asking is a polite no.

Health cover: bridge the gap before it lapses

Employer health cover typically ends at the end of the month — sometimes immediately. Your options, in order of cost:

1. A spouse or partner's employer plan — a job loss is a Special Enrollment Period trigger (60 days).
2. The ACA marketplace — a layoff also triggers a 60-day special window; with 2027 premiums proposed up a median 15%, shop actively rather than auto-renewing (see our ACA open enrollment guide).
3. COBRA — keeps your exact plan for up to 18 months, but you pay the full premium plus 2%; useful as a bridge while you decide, expensive as a plan.

Your 401(k): freeze it, don't raid it

• Do not cash out. A lump-sum withdrawal triggers income tax plus a 10% early-withdrawal penalty if you are under 59½ — turning a $30,000 balance into roughly $20,000 after tax and penalty.
• Roll it over to your new employer's plan or an IRA when you land — a direct rollover has no tax consequence.
• Outstanding 401(k) loans usually become due shortly after separation; unpaid balances are treated as distributions (tax + penalty). Check your plan's deadline now.

The 90-day budget

• Recalculate your runway in weeks, not feelings: (savings + severance + benefits) ÷ monthly essentials. This number decides everything else.
• Cut to essentials for 90 days — pause subscriptions, discretionary spending and extra debt payments (keep minimums). A NerdWallet index from October 2026 found 38% of Americans expect to rely on credit for expenses — using credit to float a layoff is exactly how short-term pain becomes long-term debt.
• Prioritise: housing, utilities, insurance, food, transport to interviews — in that order. Call lenders before you miss a payment; hardship programmes exist for mortgages, student loans and cards, but only if you ask early.
• Keep one routine: job-hunting is a job. Two focused hours of applications and networking beats eight anxious hours of scrolling.

Country notes: your local safety net