Just got laid off yesterday. I was making right at 100K for the past two months, was making 87K for the past two years. Currently planning my wedding which is in six months, and the recent raise was helping me cushion up our wedding payments. Fiancé makes about 85K and we recently got legally married, so I can be under his insurance if my cobra turns out to be too expensive.
I have a severance payout coming soon of about 23K before taxes and about 19K before taxes from my 401K payout. About 3K in debt that I’ve been actively paying off, but otherwise also have about 3 months worth of expenses.
Trying to plan how to manage the incoming money. I already have some emergency savings but obviously wanna build that up more. But looking for advice on how I can prioritize things and let this money help us for the future. After marriage we of course are wanting to look into getting a house together and me a new car, but we’re kinda adulting for the first time and figuring this all out😅
Just got laid off and just starting my personal finance journey
byu/aliensuperstar28 inpersonalfinance
Posted by aliensuperstar28
8 Comments
The only piece of advice that I want to offer is that you shouldn’t do a 401k payout. Look into rolling it into an IRA. You don’t want to start your 401k from scratch again and the penalties from taking from your 401k are massive. Only consider taking from the IRA if you fully use your severance.
Since you are already married, I would hold a very small minimal cost wedding if you really want to have one. Like a backyard or park that won’t break the bank. And don’t do the 401 payout, roll it into an IRA.
> Currently planning my wedding which is in six months, and the recent raise was helping me cushion up our wedding payments.
This is not the time to have a fancy wedding. How much would you lose in deposits if you postponed or downsized it?
> about 19K before taxes from my 401K payout
God no. Open a IRA and rollover the 401k into it for zero taxes. Do not throw away your retirement.
(Also, with $19K in a 401k you don’t have to close it at all – it may make sense to put it in an IRA to lower fees, but you don’t have to).
> About 3K in debt that I’ve been actively paying off
If this is credit card debt, why do you have it at all?
**”wanting** to look into getting a house together and me **a new car”**
Yeah, no. Heck, maybe your new job (which you will start looking for tomorrow, right?) might be WFH or reachable by public transit and maybe you don’t even need a car at all right now.
“adulting for the first time and figuring this all out”
Step 1: Learn to distinguish wants from needs.
Do not under any circumstances take a 401k payout. Roll it over to an IRA or wait to roll into new employers 401k. How soon will you find a new job? How in demand is your field?
Congrats on the wedding.
I guess it all depends upon what you want to do next. Get back in the job market or take a sabbatical. Because that would determine how soon you can afford to buy a house and a car. I would also highly recommend leaving your 401k untouched or rolling it over into traditional IRA.
Start looking for a job yesterday, all of your plans need postponed until you find one, your quality of life was cut in half so plan for that.
If you really wanna push through your wedding I would say find a way to downsize
>After marriage we of course are wanting to look into getting a house together and me a new car
Personally I would prioritize financial security first and secure a job first before doing all of that.