The best time to prepare for being let go is while you're still punching in at work.
While employment overall has been rosy — the unemployment rate went down 20 basis points to 3.6% in April, according to the U.S. Bureau of Labor Statistics — signs of job cuts are emerging.
Last month, U.S.-based businesses indicated that they would trim 40,023 jobs, according to data from Challenger Gray & Christmas.
In all, companies announced 230,433 job cuts in the first four months of 2019, up 31% from the year earlier period, the outplacement firm found.
Areas experiencing those losses include the manufacturing and automotive sectors, as well as retail, according to Challenger.
Higher tariffs amid a trade war with China increases the pressure.
"With retail, you could see prices start to rise and fewer people in the stores," said John Challenger, CEO of the firm. "That's going to accelerate retailers into closing stores, moving online and cutting jobs."
Workers who face the possibility of losing their jobs have a series of daunting choices — and they're often in the worst condition to make them.
"If you know you're going to get laid off, a lot of times you just don't hear anything else," said Scott A. Bishop, a certified financial planner and executive vice president of STA Wealth Management in Houston.
"And then when your spouse asks you about it, you're going to have two people who are confused and scared," he said.
Here's how what to do first if you're facing being let go.
The worst-case scenario is an immediate termination with no continuation of benefits.
If you're among the lucky to get a severance package — which could include cash up front and temporary access to health insurance — be sure to read the offering cover-to-cover before you agree to the terms.
"It's a legal contract," said Bishop. "You might be saying you won't sue them for termination if you're over 55, or there could be some level of noncompete agreement."
Address these key workplace benefits:
• Unused time off: Find out whether your employer will cash out your accrued, unused vacation time. Whether they do will depend on the employer's policy and state laws.
• Stock option grants: Companies may allow workers to buy some shares at a predetermined price or strike price. If you leave your job, you'll typically need to exercise those grants within a specified period of time.
Talk with your financial advisor before you act.
If your employer gives you some lead time to prepare for the layoff, focus on fattening your emergency fund, which should cover at least three to six months' worth of expenses, said Marguerita Cheng, a CFP and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.
Prioritize your bills and slash unnecessary expenses.
Talk with your lender, your utilities provider and other creditors, and decide what can you defer and what needs to be paid immediately.
"The last thing you want to do is pay a $3,000 medical bill you could have deferred for a little while, and then skip the light bill," said Bishop.
Take stock of other sources of emergency funding. For instance, a home equity line of credit, which is secured by your home, can act as a cash backstop in a pinch.
Companies that have at least 20 full-time workers and offer health insurance are generally required to offer continuation health insurance coverage under COBRA, the Consolidated Omnibus Budget Reconciliation Act.
Here's the catch: Under COBRA, you are responsible for the entire cost of the insurance premium you had previously shared with your employer, plus a 2% administration charge.
If you've lost your job, you and your qualified beneficiaries are eligible for a maximum of 18 months of coverage.
Another thing that workers should be aware of is whether they have access to a health savings account at work.
These accounts are often paired with a high-deductible health insurance plan.
Account holders are able to make a pretax or tax-deductible contribution to them, have them grow tax-free and then tap their savings free of taxes to cover qualified health expenses.
The good news is that your HSA is portable.
"It'll help you offset some medical expenses if you're worried about your bills, and you can take it with you to the next job and save," said Edward J. Snyder, a CFP and co-founder of Oaktree Financial Advisors in Carmel, Indiana.