Got laid off? Financial moves to make in the first 30 days

A high-earner layoff is not a budgeting problem. It's a sequencing problem.

The decisions you make in the first 30 days after a layoff — what you sign, when you exercise, how you handle health insurance, where you move your 401(k) — will compound for years. Get the order right and you can convert a layoff into one of the most tax-efficient years of your career. Get it wrong and you can permanently destroy six or seven figures of value in ways that are completely invisible from your bank statement.

This is the playbook we walk high-earning clients through when the call comes. Executives with eight-figure equity packages. Tech and finance professionals with vested ISOs and a 90-day expiration clock now ticking. Founders, MDs, and SVPs with deferred comp, SERPs, and severance offers that arrived with a release of claims attached.

If that's you, take a breath. Then read the next 30 minutes carefully.

The first 24 hours: do not sign anything

The single most expensive mistake we see is signing the severance agreement in the first week.

Severance agreements are negotiating documents disguised as paperwork. The version HR hands you is the company's opening offer. It is almost never their best offer — especially for senior employees, executives, and anyone in a regulated or specialized industry where the employer has reputational, legal, or competitive exposure.

Before you sign anything, do four things:

1. Read the document with a pen, not a pen. Note every restrictive covenant, every release-of-claims sentence, every reference to confidentiality and non-disparagement. Do not annotate the company's copy.
2. Confirm what's negotiable in writing. Push HR to confirm in email that severance is "an offer, not a final document." This single sentence preserves your leverage.
3. Calendar your deadlines. Federal law (the Older Workers Benefit Protection Act, if you're 40 or older and a group layoff is involved) often requires the employer to give you 21 or 45 days to consider, plus a 7-day post-signing revocation period. Younger employees and one-off terminations may have less time, but most companies will give 7-21 days on request.
4. Hire an employment attorney before day three. For high-earners, this is non-negotiable. Expect $750-$1,500 for a fixed-scope review or $5,000-$15,000 for a full negotiation. The ROI is usually 10-50x.

Why the urgency? Because the release of claims you're being asked to sign is the most important paragraph in the document. By signing, you typically waive every legal claim you may have against the employer — known and unknown, including discrimination, wage and hour, ERISA, and trade secret claims. Once signed, those claims are gone. Forever. Your attorney's job is to make sure you're not signing away leverage you don't yet know you have.

Severance negotiation: what you can actually move

For senior employees, far more than the cash number is negotiable. The eight levers we routinely push on:

1. Cash payment. Companies often start at 2-4 weeks per year of service. We've negotiated 6-12 weeks per year of service for VPs and above, and "lump sum equal to remaining target bonus" for executives terminated mid-year.
2. COBRA subsidy. Ask the employer to pay COBRA premiums for the duration of your severance period. This converts a roughly $700-$2,500/month after-tax expense into a tax-free employer payment. Worth $5,000-$30,000.
3. Accelerated equity vesting. This is where the real money lives. If you have unvested RSUs, options, or PSUs scheduled to vest within the next 12 months, ask for acceleration. For executives, "double trigger" acceleration on change-of-control may already exist — check your grant agreement. For everyone else, accelerated vesting is a negotiable ask.
4. Extended ISO/option exercise window. The default 90-day post-termination exercise window is brutal (we'll get into this). Ask for an extension to one year. The company may grant it, but be aware: extending past 3 months converts ISOs to NSOs for tax purposes. Sometimes that's still the right move; sometimes it isn't.
5. Outplacement services. A line item the company already has budgeted. Worth $5,000-$15,000 and useful.
6. Mutual non-disparagement. If they want you to agree not to disparage them, demand the same in return — from named officers and directors. This protects your reputation if the relationship sours.
7. References. Get a written, agreed-upon reference statement attached to the agreement. Specify who at the company is authorized to give it. This prevents bad references later.
8. "Garden leave" extension. For executives bound by long non-competes, ask for paid garden leave during the restricted period — full base salary continuation in exchange for the restrictive covenant. This is standard in finance and legal, increasingly common in tech.

Two more levers to consider for HNW situations: a pro-rated bonus for the current fiscal year (often "discretionary" until you negotiate it into the contract), and vesting through the severance period for deferred comp and SERP balances. Both are commonly granted when asked.

The single most important variable: never sign a release without legal review. For senior employees, the asymmetry is brutal. The employer has counsel; you don't. Fix that on day one.

Your equity comp: the most expensive 30 days of your career

This is where high-earners lose the most money the fastest. Each equity instrument has its own ticking clock.

Unvested RSUs

Default treatment: forfeited at termination. No vesting. No tax. Gone.

The exceptions:

• Acceleration provisions. Check your grant agreement for "good leaver," "involuntary termination without cause," "change-of-control," and "retirement" provisions. Some plans accelerate vesting for layoffs. Most don't.
• Negotiated acceleration. A standard ask in severance. Often granted partially (e.g., accelerate the next vesting tranche).
• Continued vesting through severance. Some companies let unvested RSUs continue vesting through your severance period. Ask.

For more on how RSUs work mechanically, see our guide on what to do when your stock vests.

Vested but unexercised ISOs — the 90-day trap

This is the single most expensive deadline in your post-layoff calendar.

Under IRC §422, to qualify for incentive stock option (ISO) tax treatment, you must exercise within three months of termination. Most company plans hardcode this as a 90-day post-termination exercise period (PTEP). Miss the window and one of two things happens:

1. If your plan terminates the option at 90 days: the option is gone. Forever. Your in-the-money ISOs are worthless.
2. If your plan extends the exercise window: the option survives but is no longer an ISO. It converts to an NSO and is taxed as ordinary income at exercise. You lose the qualifying-disposition long-term capital gains opportunity — which, for HNW employees with large ISO grants, can be a seven-figure tax difference.

The AMT trap. ISOs don't trigger ordinary income at exercise, but the spread between strike price and fair market value is an AMT preference item. If you exercise a large in-the-money ISO position, you can owe substantial Alternative Minimum Tax in the year of exercise — even though you have no cash from the transaction. Worse, you no longer have W-2 income to absorb the AMT credit efficiently.

The HNW playbook for ISOs:

• Quantify the spread today. If you have 50,000 ISOs at a $5 strike and the FMV is $40, that's $1.75M of AMT spread. Run an AMT projection with your CPA before doing anything.
• Decide on full, partial, or no exercise. A common HNW move: partial exercise sized to use up AMT capacity without triggering massive AMT liability. For example, exercise enough shares that the AMT spread is offset by your regular tax in the layoff year.
• Consider an "early exercise and hold to qualifying disposition" strategy. If you can afford the cash outlay and AMT, exercising and holding past 2 years from grant + 1 year from exercise turns the entire spread into long-term capital gains.
• Cash-flow check first. Do not exercise ISOs you can't afford to hold. The post-exercise stock price can drop and you'll owe AMT on a phantom gain you no longer have.

If you are an ISO holder and you don't know your exercise deadline, find it today. Not this week. Today.

NSOs (non-qualified stock options)

NSOs are taxed as ordinary income at exercise — the spread between strike and FMV is W-2 income subject to withholding. Post-termination exercise windows for NSOs are often 90 days but can be longer. Less time-sensitive than ISOs, but if your termination triggers a 90-day window and you have substantial vested NSOs, the same urgency applies: exercise or lose.

The ISO vs NSO tax difference matters enormously in a layoff: ISOs offer AMT-and-qualifying-disposition treatment if held long enough; NSOs are ordinary income at exercise with no holding-period magic. Confirm what you actually hold before making any exercise decision.

ESPP

Most ESPP plans handle layoffs by either (a) refunding your in-flight payroll contributions for the current offering period, or (b) cutting your contributions short and using whatever you've already deferred to purchase shares at the period-end discount. Read your plan document. Either outcome is fine — but make sure HR doesn't lose track of your contributions.

Either outcome is fine for your bottom line — but make sure HR and the plan administrator don't lose track of your contributions or any shares purchased in the final period.

10b5-1 plans in motion

If you had a 10b5-1 trading plan in effect, termination changes everything. Most plans automatically terminate on departure, but timing matters: if scheduled sales were imminent, you may face restricted trading windows post-departure as a former insider. Coordinate with your broker and the company's legal department before placing any open-market trades. For executives, this is non-optional.

Health insurance: the four-option decision

You have four options. Make the choice deliberately.

Option 1: COBRA

Federal law gives you 60 days from the loss of coverage to elect COBRA, and an additional 45 days to make the first premium payment. Coverage, once elected, is retroactive to the date your employer coverage ended.

This means you can technically wait, see if you have any medical needs in the gap, and then elect COBRA at day 59 — paying retroactive premiums for the months of coverage you'd want. It's a legitimate hedge, but only useful if you're young, healthy, and not on regular prescriptions.

Cost: typically 102% of the full premium (the 2% admin fee is the federal cap). For a family plan, expect $1,800-$3,500/month after-tax. For an individual, $700-$1,500.

Duration: up to 18 months (sometimes 36).

Option 2: ACA marketplace (special enrollment)

Losing job-based coverage triggers a 60-day Special Enrollment Period on the ACA marketplace (healthcare.gov or your state exchange). For HNW households, the relevant question is income.

If your AGI in 2026 will be below the premium tax credit cliff (recently reinstated with phase-outs above 400% of FPL), you may qualify for substantial subsidies. If you took a large severance and exercised significant equity, you likely won't — but the income spike is for one year only.

The HNW move: if you expect a low-income tail of the year (no W-2 income from October through December), consider rolling into the ACA marketplace for the following plan year. This is also when many 55+ early retirees structure their pre-Medicare healthcare strategy.

Option 3: Spouse's plan

A spouse losing job-based coverage qualifies the family for a Special Enrollment Period on the spouse's employer plan. Usually the cheapest option if available — and usually overlooked because people default to COBRA without checking.

If your spouse has employer coverage, get the cost comparison done in week one.

Option 4: HSA-eligible high-deductible plan

If you'd been on a high-deductible health plan with an HSA, you can continue contributing to the HSA if your new coverage (COBRA, marketplace, or spouse's plan) is also HSA-qualified. Your existing HSA balance is yours forever regardless. Don't withdraw from it unless you have qualified medical expenses.

The 30-day decision: get cost quotes on all four options by day 21. Make the call by day 30.

Cash flow triage: rebuild the budget in 30, 60, 90

A high-earner layoff is unique because the bank account is full, severance is coming, and the lifestyle is enormous. The mistake is assuming you have time. Do the math early.

30-day budget rebuild

In the first week, run this calculation:

1. Monthly fixed expenses (mortgage, property tax, insurance, utilities, childcare, tuition, debt service, healthcare). Be honest.
2. Variable lifestyle (groceries, restaurants, travel, household, entertainment). Use the trailing 12 months from your credit card statements.
3. Total monthly burn, after-tax.
4. Available runway: (cash + liquid investments) ÷ monthly burn.

Most HNW households are shocked the first time they do this. A family with a $3M net worth and $800K HHI commonly burns $40K-$70K per month after-tax. That means $1M of liquid net worth is 14-25 months of runway, not "forever."

60-day severance and unemployment

Severance is typically paid as either (a) a lump sum or (b) salary continuation. Each has tax and cash-flow implications:

• Lump sum: hits one tax year. Subject to 22% federal supplemental withholding on amounts up to $1M, 37% above. For HNW, the 22% withholding is often under-withheld vs your marginal rate — plan for a balance due at filing.
• Salary continuation: spreads income across tax years. Often more tax-efficient if it pushes income into the following year, when you may have a lower marginal rate.

If your employer is flexible, ask which structure works best for your situation. We've negotiated this on multiple deals.

State unemployment. Yes, file. Even if you make $500K. UI is paid on a sliding scale and most states cap weekly benefits at $400-$1,500 per week. For someone earning $500K base, the modest UI benefit ($15,000-$30,000 annualized) is real, taxable income that helps offset lost wages. You paid into the system for years. Claim it.

State-by-state nuance: UI eligibility usually requires that you were laid off (not fired for cause and not voluntarily quit). Severance receipt sometimes delays UI start; sometimes doesn't. Check your state's specific rules.

90-day income decision

By day 90, you need a clear answer: are you looking for another W-2 role, or transitioning to 1099/consulting/founding work? This decision changes everything about your tax planning, retirement savings options, and benefits structure.

For consulting/1099 income, see our piece on the SEP IRA — it's one of the most powerful retirement vehicles for high-earning self-employed individuals, with a 2026 contribution cap of $72,000.

Your 401(k): the four options

When you leave a job, you have four options for the 401(k) balance:

1. Leave it in the plan (if balance >$7,000)
2. Roll it to your new employer's plan
3. Roll it to an IRA
4. Cash it out (don't)

The default move is the IRA rollover, but for HNW employees there are several reasons to pause:

• Rule of 55. If you separated from service in or after the year you turned 55, you can take penalty-free withdrawals from that 401(k) — but only while it stays in the 401(k). Roll to an IRA and you lose this carve-out.
• Net unrealized appreciation (NUA). If you have appreciated employer stock in the 401(k), rolling to an IRA can destroy a major tax planning opportunity. NUA lets you take the employer stock out in-kind, pay ordinary income on the cost basis only, and treat the appreciation as long-term capital gains. For HNW employees with significant employer stock, this is often a six- or seven-figure decision.
• Pro-rata rule complications. Pre-tax 401(k) money rolled to an IRA can permanently break your ability to do clean backdoor Roth conversions going forward. If you've been doing backdoor Roths, rolling pre-tax money into your traditional IRA may not be the right move.

For a full walkthrough, see our 401(k) rollover guide.

Tax planning in the year of a layoff

The year you get laid off is often one of the most complex tax years of your career. Lump severance + final bonus + accelerated equity + exercised ISOs/NSOs + RSU vesting + state-source nuances all hit at once. Get a CPA involved before year-end.

Five plays to consider:

1. Defer income into next year

If you have any control over timing (deferred comp election windows, bonus payment date, severance structuring), pushing income into the lower-income following year can save 5-15 percentage points of marginal tax.

2. Charitable bunching

If your layoff year is your highest-income year ever, it's also your highest tax-savings year for charitable giving. A donor-advised fund (DAF) lets you fund 3-5 years of giving in one year, take the full deduction at your peak rate, and grant out over time. Combine with appreciated stock contributions (long-term holdings, never short-term) and you can compound the benefit.

3. Roth conversion in the low-income tail

If your layoff happens mid-year and you don't take new W-2 income for the rest of the year, the back half becomes a Roth conversion window. Converting traditional IRA dollars to Roth at your now-lower marginal rate can be one of the highest-IRR moves in personal finance.

For more on the traditional vs Roth decision generally, see our traditional 401(k) vs Roth 401(k) breakdown.

4. Tax-loss harvesting

Look across your taxable accounts for embedded losses. Realizing them in a high-income year offsets ordinary income up to $3,000, but more importantly offsets short-term and long-term capital gains from equity exercises and RSU sales.

5. Deferred comp elections

If you participate in a 409A deferred compensation plan or SERP, layoff often triggers a payout. Most plans have rigid payout schedules — lump sum at termination, installments over 5-10 years, or trigger-based payouts. You usually cannot change the schedule post-termination (the 409A rules around payment elections are strict and re-elections require 5+ year delays). What you can do is plan around the cash inflows: stack other deductible moves in the years payouts arrive.

The 55+ healthcare and Roth conversion window

If you're 55 or older when you get laid off, you may have stumbled into one of the best tax-planning windows of your life: the gap between the end of W-2 income and the start of Medicare at 65.

Two specific moves:

• ACA premium tax credit positioning. Your AGI in the years before Medicare can be managed to qualify for substantial ACA subsidies. By drawing from taxable accounts (mostly basis), Roth dollars (tax-free), and minimal traditional IRA (income), high-net-worth early retirees can sometimes pay $0-$500/month for marketplace coverage — for a family.
• Roth conversion runway. Every year between layoff and RMD age (currently 73, rising to 75) is an opportunity to convert pre-tax dollars to Roth at moderate brackets. Doing this consistently for 10-15 years can shave 30-50% off your lifetime tax bill and dramatically increase the after-tax wealth your heirs receive.

For benchmarking how your retirement savings stack up, our average retirement savings by age piece walks through HNW targets at 30/40/50/60.

If you're going independent: the 1099 transition

A meaningful percentage of HNW layoffs lead to consulting, fractional work, or founding the next thing. If that's the path:

• Entity structure: LLC by default, S-corp election if your net consulting income exceeds ~$80-$120K. S-corp lets you split income between W-2 wages and distributions, saving 7.65%-15.3% on the distribution portion. Below that threshold, the admin cost (payroll, separate tax return) eats the savings.
• QBI deduction: pass-through income may qualify for the 20% qualified business income deduction up to phase-out thresholds (~$201,775 single / ~$403,500 MFJ for 2026). Specified service trades (consulting, finance, law) phase out completely above the upper limits.
• Retirement plan: SEP IRA or Solo 401(k). For high earners, the Solo 401(k) is usually better — same $72K cap but better access to backdoor Roth and Mega Backdoor Roth structures.
• Quarterly estimated taxes: if you're now 1099, no one is withholding for you. April 15, June 15, September 15, and January 15 of the following year. Miss them and you owe penalties.

The emotional/behavioral layer

The layoff playbook above is mechanical. The behavioral side is where most people self-inflict.

Three traps we see repeatedly:

1. Lifestyle shock. The instinct after a layoff is to either (a) lock down everything and panic-cut spending, or (b) carry on as if nothing happened. Neither is right. The right move is a 90-day budget recalibration — keep what matters, cut what's pure consumption, preserve runway for 18 months minimum.
2. Panic decisions on equity hold/sell. People who would never sell quality stock at a low do sell their own company's stock when laid off, often at distressed prices. Make equity decisions on the merits — concentration risk, tax timing, company outlook — not on emotion.
3. Premature Social Security. If you're 62+ and laid off, the temptation to claim Social Security early is real. Don't, unless cash flow truly requires it. Each year you delay from 62 to 70 increases the benefit by roughly 7-8%. For HNW households who can afford to delay, this is one of the highest-return decisions in personal finance.

And one more: do not make permanent decisions in the first 30 days unless absolutely required. The first month is for stabilization. Months 2-6 are for strategy.

The 30-day checklist

Days 1-3:

• Get the severance document. Do not sign.
• Calendar your severance deadline (21 days OWBPA standard for 40+).
• Find your equity grant agreements. Locate your ISO/NSO/RSU vesting and exercise deadlines.
• Hire an employment attorney for severance review.

Days 3-7:

• Run AMT projections on any unexercised ISOs.
• Get cost quotes on COBRA, ACA marketplace, spouse's plan, and HSA-eligible options.
• Pull last 12 months of credit card statements; build the monthly burn calculation.
• Notify your wealth manager and CPA.

Days 7-14:

• File for state unemployment.
• Negotiate the severance agreement (cash, COBRA subsidy, accelerated vesting, ISO extension, mutual non-disparagement, references).
• Begin the equity decision (exercise, partial exercise, or let expire).
• Determine 401(k) treatment (leave, rollover to IRA, or new employer).

Days 14-21:

• Execute on health insurance decision.
• If 55+, model the early-retirement healthcare and Roth conversion runway.
• Run the lump-sum vs salary continuation tax comparison if severance structure is flexible.

Days 21-30:

• Sign severance only after attorney review and final negotiation.
• Execute ISO exercises if applicable (with cash plan for AMT).
• Set up 1099 entity structure if going independent.
• Schedule a year-end tax planning meeting with your CPA.
• Finalize the rebuilt 90-day cash flow plan.

How PWC fits in

A layoff is a sequencing problem. Severance + equity + health + tax + retirement decisions all interact, and almost every one of them has a deadline. The right wealth manager runs the full board with you — not just one square at a time.

That looks like: coordinating with your employment attorney on severance structure; running AMT and cash-flow projections on the ISO/NSO decision; modeling the 401(k) rollover/NUA/Rule of 55 tradeoff; structuring charitable bunching and Roth conversions for the layoff year; and rebuilding the household balance sheet for the next 18 months.

If you've just been laid off — or you can see it coming — book a call with our team. We have a defined first-30-days protocol we run with HNW clients in exactly this situation, and the goal is to get every reversible decision right the first time.

Frequently asked questions

Should I sign my severance agreement before talking to a lawyer?

No. Especially not as a high-earner. The release of claims you're being asked to sign waives every legal claim you may have against the employer — known and unknown. For senior employees, the asymmetry of the employer having counsel and you not having counsel is the single biggest source of avoidable financial loss in a layoff. Expect to spend $750-$5,000 on an employment attorney; the ROI is almost always 10-50x.

What's the actual deadline to exercise my ISOs after being laid off?

The IRS rule (IRC §422) is three calendar months from your last day of employment. Exercise within that window and you keep ISO tax treatment. Most company equity plans hardcode this as a 90-day post-termination exercise period (PTEP) — miss it and the options either expire entirely or convert to NSOs, depending on your plan document. Find your equity grant agreement on day one and confirm both the company's PTEP and your specific deadline date.

Can I collect unemployment if I made $500K+?

Yes, in nearly every state. Unemployment is funded by employer payroll taxes you already contributed to, and the benefits are paid on a sliding scale with state-by-state caps (typically $400-$1,500/week, or roughly $15,000-$60,000 annualized). Severance receipt sometimes delays the start of UI benefits; check your state's specific rules. Filing is straightforward and the income is real.

How long does COBRA coverage last and how much does it cost?

Up to 18 months in most cases (36 months for certain qualifying events). Cost is up to 102% of the full premium — the actual cost of the health plan plus a 2% administrative fee. For a family plan, expect roughly $1,800-$3,500/month after-tax; for an individual, $700-$1,500. You have 60 days from the loss of coverage to elect, and once elected, coverage is retroactive to the date employer coverage ended.

Should I roll my 401(k) to an IRA right after being laid off?

Not automatically. Three situations where you may want to leave the 401(k) where it is: (1) you separated from service at age 55 or older and want to use the Rule of 55 for penalty-free withdrawals; (2) you have substantial appreciated employer stock and want to use the Net Unrealized Appreciation strategy; (3) you do backdoor Roth conversions and don't want pre-tax money in a traditional IRA breaking the pro-rata calculation. Get our full breakdown of the 401(k) rollover decision before moving anything.

What happens to my deferred compensation when I'm laid off?

Most 409A nonqualified deferred compensation plans pay out on a fixed schedule triggered by separation from service — typically either a lump sum or installments over 5-10 years. The payment schedule is set when you originally elect deferrals and is extremely difficult to change post-termination (re-election rules require a 5-year delay). Coordinate with your CPA on the tax impact, especially if a large lump-sum payout coincides with severance and accelerated vesting in the same calendar year.

Is a layoff a good year to do a Roth conversion?

Often, yes — especially in the back half of the year if you don't have replacement income. The general logic: if your taxable income drops materially in the months after the layoff, you may be in a lower marginal tax bracket than you'll be in for the rest of your career. Converting traditional IRA dollars to Roth at that lower rate, even partially, can be one of the highest-IRR moves in personal finance. Run the projection with your CPA before year-end.