TheJobBored » Finance

Getting Fired? Laid Off? What About Your 401 K?

Brian — Mon, 08 Mar 2010 21:23:51 +0000

In the past, I’ve written about what you should do first if you get fired or laid off.

Over the weekend, over at the WiseBread blog, I saw a new strategy that had never occurred to me before.

Essentially, it boils down to remembering to ask the HR folks if they’ll give you the unvested portion of your 401 (k).

A lot of companies have 401 (k) matching plans. It’s basically free money: they contribute x dollars to match every y dollars you contribute. The catch is, you have to stay with the company long enough for that to “vest.” If you leave too soon, they don’t have to make good on that money.

But if they fire you before the vesting can happen… well, that’s not your fault!

But a lot of employers are willing to give you the unvested portion of your 401(k) account if/when you’re being let go.

Especially if it’s not performance related and they just need to downsize. It’s not that big of a deal to them and in an effort to make these kinds of moves as painless as possible, there is a good shot you’ll get this money.

The worst thing that can happen? They say no.

Hmmm. I don’t know. If they’re in the saving money downsize mode, I’m not so sure they’ll be so sanguine about handing over the money.
But then again, this is one of those I suppose it can’t hurt to ask situations. I mean, they are going to give you (hopefully) some sort of severance package. So why shouldn’t the “free money” be a part of it?

Most of us, when we’re in the frenzied moment of being handed a pink slip, don’t tend to think clearly. So, make a mental note now. If you’re ever facing the proverbial firing squad, don’t forget to ask if you can take your “free money” with you.

It’s better than leaving money on the table.

And as always, if you find yourself suddenly laid off, it might be time to hire professional help.

Benefits, Perks To Be Trimmed in 2009

Brian — Thu, 19 Feb 2009 21:10:32 +0000

Not really a surprise, right?

A new CareerBuilder.com survey finds that nearly 40 percent of the 3,000 HR reps and managers polled plan to make administrative cuts at some point in 2009.

Furthermore, 65 percent of those who plan on cutting costs are also scaling back on company events like social gatherings and picnics. Sixty-one percent will curtail business travel.

Benefits, Perks To Be Trimmed in 2009. Via Cheezhead.

Is A Recession Any Time To Ask For A Raise?

Brian — Wed, 05 Nov 2008 14:49:33 +0000

Counter-intuitive time, people!

I am the sort of guy that tends to believe you should never be afraid to ask for a raise. (The proviso of course being that you shouldn’t ask too much or too often or expect things that are outlandish.)

But even when times are tough for your company? That’s when a raise should be the last thing on your mind, right?

No, and here’s why:

1) Asking for a raise can be a good way to tell you where you stand.

If times are tough, and my most valued employee comes to me and says they’re unhappy with their situation, this is a double crisis for me as a manager. After all, if times are tough, the last person I want to piss off or lose is the most valued member of my team… my number one producer.

As a manager, I need my best employees to be happy and productive because they are the work-horses I’m depending on to turn these bad times around. If I lose them, the bad times will only get worse.

So if you ask for a raise and the boss bends over backwards to try to placate you, then not only is your job safe, you know your boss is depending on you. You’re a key part of their survival strategy.

On the other hand, if they laugh in your face or say something like, you’re lucky to even have the salary you currently have, then you know where you stand also: not on solid ground. But hey, that’s information too. You can begin to assess your options.

2) Even if they can’t give you a raise, they might find other ways to keep you happy.

After all, even if your boss can’t get you a raise right now, you’ve made them aware that you’re a bit unhappy or at least a bit hungry. They might start to think of other ways to reward you. They might even start to think of other forms of non-monetary compensation.

Maybe they’ll be more lenient when you ask for some extra time off. Maybe they’ll keep an eye out for an opening on that project or new position you’ve wanted. You might even find yourself singled out for extra or individual praise, raising your profile in the office.

This is my most important point about asking for a raise even if you know the boss will say no: you’ve put them on notice. If they really like you and value you, you’ve made them aware that they need to take steps to keep you happy. Even if more money is not forthcoming, you have at least put yourself on their radar to pay better attention to your needs. Making the boss aware of your feelings might pay dividends down the road in ways you can’t anticipate but are just as valuable as a raise.

3) You never know, they might say yes.

If they say no, and there are no hard feelings for having asked, then you’re out nothing.

But they might say yes. And any time you wasted being afraid to ask was just the lost opportunity to make more money sooner.

Again, put yourself in the position I described in point number 1. You’re the superstar. The best producer. If the company is going to ride out these hard times, they’re going to do so riding on your back and your productivity.

If you find yourself in that situation, then you really are more valuable to your employer. And maybe you should be compensated for that.

On Salary Transparency

Brian — Wed, 20 Aug 2008 20:41:19 +0000

The New York Times had an article today on salary transparency that has gotten a fair bit of attention in the blogosphere. The thesis of the article is that in this internet age, knowing what your co-workers make will become commonplace. The move toward an open workplace, the article posits, might be inevitable.

Openness about company ledgers “will become the norm,” Ms. Fenton predicts, “even if people come to it reluctantly. If people are paid what they are worth, there is no reason for people to feel uncomfortable about sharing salary information.”

Color me not so sure.

I certainly acknowledge that there are plenty more ways to get an idea of what you should be paid. Salary.com has always been one such tool. But Salary’s next-generation competitors like PayScale, GlassDoor and SalaryScout, are taking things even further. It’s now possible to find out what a specific position probably (or used to; or most likely) pays based on anonymous feedback.

But I don’t think you’ll ever see true and complete salary transparency. Not because, as the article suggests, middle class mores make salary disclosure taboo. No, the thing that the article doesn’t mention is the real reason why salaries are kept secret.

As my friend Matt pointed out, it’s in the best interest of management to keep salaries under wraps. If every worker knows what every other worker makes, then they will demand at the very least strict and complete equality in pay. But if no one really knows for sure… if the salary waters are a bit murky… then management can get away with paying some people way less than they otherwise would have to.

In short, it’s in management’s best interest to keep salaries secret so that they can keep labor costs down. Your boss might pay Bob 10k more than he pays you for the exact same job. It’s not your bosses fault. If, for whatever reason, you agreed to work for less, then hey: it’s a free market!

Sorry if I sound a bit Marxist in my analysis, but I think that’s the overriding reason for the tradition we have of keeping salaries on the down low. It’s a fact of business life, and the article kind of misses it in my estimation.

But that leads me to one of my favorite all-time bits of advice for anyone in the workforce:

In short:

Do whatever you can (legally and ethically of course) to find out what your co-workers make. If you ever have the opportunity to honestly learn about others’ salaries, don’t pass that opportunity by. Take it!

There is no more valuable bit of information that you can attain. Knowing how you stack up salary-wise tells you exactly how you’re valued by your boss.

And if you find you’re undervalued, do whatever you can to learn why and try to rectify the situation.

How $200-A-Barrel Oil Might Affect The Workplace

Brian — Sat, 28 Jun 2008 20:09:20 +0000

Doesn’t it kind of feel like all sort of bills are coming due lately?

I’ve written before about how at ResumeWriters.com we’re seeing the cost of the commute become a major factor in job searches for the first time ever. I’ve been helping people find jobs for more than a decade now, and until this year, I’d never heard the phrase: “I’ve got to find a job closer to home. I can’t afford the drive anymore.”

The LATimes had an interesting article this weekend about the possible knock-on issues if oil goes to $200-a-barrel. What do they foresee happening to the workplace in such an environment?

Dramatically higher transportation costs would usher in an era of virtual mobility, or zero mobility, for many workers.

“We’re seeing companies go to four-day workweeks, place increased emphasis on working at home, show bigger interest in setting up satellite offices — anything that gets commute times down and gets people off the road,” said analyst Rob Enderle of Enderle Group in San Jose.

Videoconferencing, touted as “the next big thing” for years, would finally have its day, thanks to improved technology and a desperation to cut corporate travel budgets.

Telecommuting, or working from home, is easier than ever because of the spread of high-speed Internet access, said Jonathan Spira, chief analyst at Basex Inc., a business research firm in New York. In particular, workers in “knowledge” jobs that can be performed with computers and phones would benefit.

But Gilligan of USC noted that lower-income workers tend to be in jobs that don’t favor telecommuting, such as retail and food service.

“These are the same people who are already being creamed by the mortgage crisis,” he said. “The impacts of energy price increases are highly disparate.”

Although white-collar workers may be able to telecommute, they could also take a serious financial hit because soaring energy prices tend to wreak havoc on the stock market. The explosion of 401(k) plans and similar retirement accounts in the last few decades — and the decline of traditional pensions with guaranteed payouts — have tied workers’ financial futures more closely to stocks than they were during the 1970s oil shocks. A prolonged Wall Street downturn could mean a no-frills retirement, or none at all.

How To Fill Out A W-4

Brian — Thu, 19 Jun 2008 18:48:01 +0000

Until last weekend, I had never heard of PaycheckCity.com (h/t NYTimes).

But I’m glad I was turned on to them. They have 3 free and insanely useful online calculators and assistants that are designed to help the average worker.

The most impressive to me is the W-4 form assistant. Isn’t it confusing every time you start a new job and you have to give them info for the W-4? How many dependents should you claim? How many exemptions? Especially for the younger workers out there, what about student loan debt and other considerations?

This W-4 form assistant will help you out.

They also have a Salary Paycheck Calculator and an Hourly Paycheck Calculator, both accessible from the main page.

And of course, before you can get to fill out a W-4, you need to be hired. And a professional resume writing service will help you do that.

Anecdotal Stories of the Economy

Brian — Tue, 06 May 2008 18:19:12 +0000

Apparently, people are taking to sites like craigslist and eBay not just to find original Voltron toys from the 80s… but simply to make ends meet (h/t SavvySugar).

Americans unload prized belongings to make ends meet

At Craigslist, which has become a kind of online flea market for the world, the number of for-sale listings has soared 70 percent since last July. In March, the number of listings more than doubled to almost 15 million from the year-ago period.

Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but said the rate of growth is “moving above the usual trend line.” He said he was amazed at the desperate tone in some ads.

I’ve mentioned before that I think ResumeWriters.com sees anecdotal evidence of the health of the economy before anyone else does. Our business saw a surge in client volume beginning last August/September, and hasn’t slackened yet.

Here’s some more anecdotal evidence, at least from our front lines:

Yesterday, I sat in and took some customer service calls along with our customer service team. That’s part of the reorganization I meantioned. I wanted to make sure all our systems were still functioning smoothly.

I hadn’t answered the phone for ResumeWriters for years, but in the early days of the company I took thousands. So, I’m familiar with the sort of questions people ask and the sort of things people looking for work are concerned about.

My second call was from a guy who was saying he was looking for work closer to home because, he “couldn’t afford the commute downtown” anymore. He wanted to move closer into the city but couldn’t because he couldn’t sell his house. So he was looking around for opportunities in his local suburb.

Now, I gotta tell you, I’ve NEVER heard that before. So I asked the other customer service team if they had ever encountered clients looking to switch jobs because of gas prices and the length/expense of the commute. Not only had they ALL heard such stories, it seemed to be something not out of the ordinary.

Sign of the times, I guess.

Job Search/Layoff Tip- Rainy Day Fund

Brian — Mon, 05 May 2008 17:46:55 +0000

There’s a series of things “they” always tell us to do: payoff your debt, never carry a credit card balance, fully fund your 401k and IRA every year…

One of the things “they” also mention is a rainy day emergency fund. How many of us out there are disciplined enough to have one of these? And I mean a real one… money set aside that you won’t breakdown and use as a down payment on a new car? Money you won’t touch unless you absolutely need it.

If you feel your job is in danger, this discussion is not completely academic. Depending on the data you look at, the average job search is 6-weeks to 3 months. Can your family go that long without your income? What if you need to purchase health insurance for the interrum?

Heck, even in the best of all possible world’s, any jobs search has the potential to break your bank. If you suddenly have to take a new job halfway across the country, do you have enough money to move your household over there?

There are plenty of different philosophies about an emergency fund. I guess the most fool-proof plan would be to set aside 3 months of income, so you know you’d be completely cushioned. But how many years would it take you to build up an emergency fund equal to 1/4th of a year’s salary.

Having a cash cushion of a couple thousands dollars is not outside the realm of possibility, however. And there are other options as well:

David Chilton writes: “I’m not against emergency funds, but I do feel that $2,000 to $3,000 is much more realistic than $10,000. If you’re afraid that an expensive emergency looms in you future, establish a $10,000 credit line at your bank.” Chilton believes most people have insurance to cover many emergencies, and $2,000 or $3,000 is enough to meet the needs insurance will not cover. In the meantime, if you need more, you can liquidate investments.

Notice the sentence in bold.

Actually, that quote is from one of my all-time favorite blogs, GetRichSlowly. If you have personal finance questions about absolutely anything, GetRichSlowly is the place to go.

Here are two of the best GetRichSlowly articles about emergency funds:

How and Why to Start an Emergency Fund

Learning To Love the Emergency Fund

Health Insurance Options After a Job Loss

Brian — Mon, 28 Apr 2008 12:27:41 +0000

The best time to prepare for a job loss or a layoff is before it happens. Anticipation. Preparation.

I’ve been thinking a lot about this issue lately, so I’ll have a bunch of posts on this this week. There were a lot of good things on the internet this weekend about just this topic.

Starting with this excellent rundown: Health Insurance Options After a Job Loss.

If you don’t have a spouse’s employer group plan available to you as a back-up, there’s always Cobra, the acronym for the law that allows you to continue on your employer’s plan generally up to 18 months after a job loss — as long as your employer has at least 20 workers. If you worked for a small business that offered health coverage, you may be able to get Cobra-like continuation from a state-administered program. Visit Georgetown’s “Consumer Guides for Getting and Keeping Health Insurance” at www.healthinsuranceinfo.net to learn more about your state’s programs and options.

While Cobra can be helpful, especially for people undergoing a course of treatment, it’s often too expensive to be a viable solution because you’re on the hook for the whole premium plus a 2% administrative fee. The average price? Around $400 a month for an individual and $1,000 a month for family coverage, Pollitz says.

“The sticker shock is pretty horrific,” she says. “What you’re used to seeing deducted from your check — that’s just a fraction and you’ll see the rest of the pie when you go into Cobra.”

Interlude- Wherein I Get On My Soapbox

Brian — Thu, 10 Apr 2008 14:03:04 +0000

I think that this article from the NYTimes should be required reading for everybody.

Forget the complexities of credit crunches and subprime mortgage loans, if you want to know why our economy is in the situation it’s in, all you need to do is read the article and view the accompanying graph.

The bigger problem is that the now-finished boom was, for most Americans, nothing of the sort. In 2000, at the end of the previous economic expansion, the median American family made about $61,000, according to the Census Bureau’s inflation-adjusted numbers. In 2007, in what looks to have been the final year of the most recent expansion, the median family, amazingly, seems to have made less — about $60,500.

This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did. You can think of this as the most basic test of an economy’s health: does it produce ever-rising living standards for its citizens?

The point I want to make here, is that we are where we are because we’ve been suffering through an entire generation of economic and political thinking that has devalued the worker. This blog consciously pitches itself to the average American worker, because that is what I care about.

The thing that gives me juice about what I do for a living is the thought that I am helping average people get better jobs, make more money, and get ahead in life.

But I think I’m not alone in feeling more and more that our society cares less and less about what people do for a living, and cares even less again about whether or not they get ahead in life.

More than anything else — more than even the war in Iraq — the stagnation of the great American middle-class machine explains the glum national mood today. As part of a poll that will be released Wednesday, the Pew Research Center asked people how they had done over the last five years. During that time, remember, the overall economy grew every year, often at a good pace.

Yet most respondents said they had either been stuck in place or fallen backward. Pew says this is the most downbeat short-term assessment of personal progress in almost a half century of polling.

Being pro-the-average-American-worker is not something that is anti-capitalist. On the contrary… it’s basic economics to understand that an economy is a two-way street. You have a vibrant and functioning economy only when the CONSUMER side of the economy is as healthy as the PRODUCER side of the economy.

Remember the example of Henry Ford paying his workers a high wage so that they could afford to buy the very cars they made? (History buffs… yes, I am aware that that canard is slightly apocryphal… Ford had to pay high wages because the work conditions were atrocious and turnover was worse. Still, it’s a useful metaphor.)

How much longer can we continue to put corporations and moneyed interests ahead of the interests of the American worker? It’s downright blindness and amnesia to forget that workers are A COMPONENT OF corporations and moneyed interests. At the very least, workers are the flip side of the economy… the other half that keeps things going… and so, at the very least, there should be a balance between the interests of the two.

After all, if I can’t afford to buy one, you can parade all the flat screen tvs in the world in front of me, and I still won’t open my wallet to save your company’s share price.

The causes of the wage slowdown have been building for a long time. They have relatively little to do with President Bush or any other individual politician (though it is true that the Bush administration has shown scant interest in addressing the problem).

The slowdown began in the 1970s, with an oil shock that raised the cost of everyday living. The technological revolution and the rise of global trade followed, reducing the bargaining power of a large section of the work force. In recent years, the cost of health care has aggravated the problem, by taking a huge bite out of most workers’ paychecks.

Real median family income more than doubled from the late 1940s to the late ’70s. It has risen less than 25 percent in the three decades since. Statistics like these are now so familiar as to be almost numbing. But the larger point is still crucial: the modern American economy distributes the fruits of its growth to a relatively narrow slice of the population. We don’t need another decade of evidence to feel confident about that conclusion.

In the mainstream discourse of this country, sticking up for the worker is not just labeled anti-capitalist, it is very often labeled un-American. Sticking up for the worker can get you labeled as a class-warrior, or, worse, an old school welfare state fan that is anti-business. I cannot understand why this is.

Again, I go back to the notion that an economy is only healthy when all boats rise at the same time. We’ve endured a generation where only one tiny sub-section of the boats have risen. The rest of us has been treading water.

It’s not class warfare to point out that a few companies and people have gotten very rich in spite of, and, perhaps, on the backs of, the rest of us. It’s not anti-American to point this out or be angry about this. It’s not an issue of Red State/Blue State, or even a matter of politics.

It’s a matter of common sense.