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“Now, how am I gonna pay the rent?” Matt Rollins (a friend of mine) asked himself this question after his six month’s severance package ran out; he had been laid off recently from his a job at a Fortune 200 financial institution in San Francisco. In addition, Matt wasn’t just looking for a similar position with another bank…he was making a career transition to become a secondary school teacher. He had applied and been accepted for a one year career transition teaching certificate program offered at a local college.

Reduce living expenses

The first thing Matt did was to lower his living expenses. He had been paying $1600/month rent in San Francisco. He had heard that a friend had an extra bedroom available at half that amount. He quickly jumped on this opportunity and moved.

Savings as a cushion

Matt also had $15,000 in savings that he was able to tap into during this time when he wasn’t working full time and attending the teaching certificate program. This provided $2500/month of living expenses (after his six month severance ran out) during this transition. Matt says that if he hadn’t had this emergency fund, he would have been unable to make the career change.

Part time consulting another resource

Matt consulted part time during this transition as well, providing some much needed cash to pay bills. He says that it is important to take part time consulting opportunities that will help pay bills…to get you through the transition even if the focus of the position is routine or menial. The part time consulting provided Matt about 20% of what he needed for monthly living expenses.

Career Change Success

After Matt successfully completed the teaching certificate program, he accepted a teaching position at a high school in the Central Valley of California. While he had preferred to be in northern California, he knew that he needed experience and, despite the location of the position, he took the opportunity.

Positive Attitude Important

Matt says that it is important to have a positive attitude during any career change….”keep your eyes focused on the goal.” Reduce your living expenses, stay flexible and achieve your dream.

Welcome to my blog… and yours.  I look forward to hearing it all……. I have years of experience in healthcare, both as a professional and a cancer patient looking down the nose of a Cobra payment.  Years and dollars separate me from retirement, but I can still see it somewhere down the road.

Are the Health Care Giants Ready to Bargain?

Maybe like you, I woke up this morning to the internet headline, “Obama appears ready to drop the public option due to pressure from Republicans and a wary public.”  Hmmm?  Could the truth be, he now has big pharma, hospitals and insurance companies ready to make a deal?  I think so.  That big stick called “the public option” can now be put away.  Unfortunately, nothing but that heavy threat was going to bring all of these 3 giants of rising health care costs to the table ready to play their part in the future of a healthy healthcare system in this country. 

How to Satisfy Needs of Boomers?

This is the start we need.  We might just get there with the concessions given by these three groups.  But, where is there?  The first there is a significant drop in health care costs, the second is affordable coverage for all with no exclusions for previous conditions and the third is affordable coverage that can move with us.  Where “there” is not yet, is affordable coverage for those who retire between the ages of 60-65 and are not yet eligible for Medicare.  Say what you will about the “boomers”, we may have had a reluctant start embracing the job market while we found ourselves at Woodstock, but once engaged, ended up fierce workers whether at government, non profit or corporate gigs.

What Might Work?  Let Me Hear From You

We now find ourselves winding down, out sourced, health issues of our own, caring for  elderly parents, wondering how we will manage this new stage of our lives and, what will be available to assist us.  As this health care debate moves forward and the largest group of consumers ever to represent a demographic is in need, will there be provisions to cover the citizens who helped create the highest GNP in our history?  With the savings we obtain from the big three is it reasonable to drop the age of Medicare to 60 while we jump the age of Social Security.  We can take early Social Security, why not early Medicare?  Will we take our affordable healthcare coverage with us when we leave the job market due to early retirement offers or lay offs that help save the bottom line of our employers? That might work.  What else might work?  Lets hear from you.

There is nothing very exciting about it. I have lived my life walking down the middle of the road… always objectively able to see both sides. But, lately it’s been difficult to find that middle ground when it comes to the healthcare debate.

Death of Breadwinner, end of Family Benefits from Employer

A friend who just turned 50 was diagnosed with a terminal illness and will most likely not see the New Year. His wife has not worked in 15 years, since their daughter was born. They have their healthcare through his employer. They won’t when he is gone. It is that simple. And, that tragic. She will lose her husband, her daughter will lose her father, and they will both lose their healthcare, along with a way of life they have come to know. Just like that. No warning.

Trade offs in New Health Care Provisions

Walking down that middle of the road, I have at alternating times witnessed the good and bad of public healthcare. In Great Britain I have seen my elderly aunt paid a house call by her doctor in the dead of winter when she could not leave the house; and she has also received, (at no cost to her, although at some cost to all taxpayers) the latest digital hearing aid that cost over $4,000 in the states. I was impressed. However, I have also watched my family members, when a serious disease was diagnosed, rather than die waiting for treatment, immediately go to a “private” doctor. Because of this type of rationing, I have had some serious misgivings, i.e. getting sick is the same as not having healthcare unless you can afford to pay for it in public healthcare. Not saying that Great Britain does not do a beautiful job with end of life and hospice, they do, but we’re talking about treatment here not palliative care.

Portability in Employer Health Benefits

So you see I am still in crisis over my friend’s family, and I am still trying to find that middle ground thinking there has got to be another way to handle this without going off the deep end ideologically. But my friend’s wife and child are going to need healthcare after he is gone, affordable healthcare, healthcare that is there for them should they become, God forbid, as sick as he is. A portability provision in whatever plan makes it to the president’s desk to allow a widow to retain her deceased spouse coverage until her children have reached the age of 18 could be part of the pressing need for insurance reform if not healthcare reform.

Most employees experience some company acquisition turmoil in their careers…. And occasionally, lose their jobs in the process.  They are told they are “excess,” the company is “downsizing,” or that they need to relocate.  Cindy Canup of Oakland, CA was in such a position when Steifel acquired Connectics in 2007 and she was asked to move back to the East Coast.

Cindy and her husband Eric loved the Bay Area…they had already made 3 cross country career moves and didn’t want to do it again.  They enjoyed the community, friendships and the village atmosphere of the Montclair area of the Oakland Hills…they didn’t want to forsake their lifestyle just to stay with the company.  Her choice was to relocate or be laid off.  She chose not to move and accepted a severance package.

Job Search Took Longer than Expected

When she was first laid off, Cindy was excited…here was a chance to explore different opportunities.  But when the job search extended past 6 months, she became bored, doubting herself and her ability to really land a worthwhile job.   Then doubt turned into pragmatism…Cindy knew that her efforts would pay off.  Her job search was agonizing and frustrating, she went to more than 100 interviews with 23 companies.  Often she would be the finalist, and there was some skill that the person selected had that she didn’t.

Fortunately, Cindy had a good financial cushion made up of 3 elements:  significant stock options, 8 months of severance pay and a healthy balance in her brokerage account.  Cindy says it was quite tempting to look at these large balances and live exactly the way as before, but being frugal, she and Eric didn’t “go crazy” and financially, lived their lives as before.   Cindy says that they were circumspect about their purchases during her 14 month period of unemployment, though they did go on an extended vacation to New Zealand that was planned prior to accepting the severance package.

Finally, at the same time, two job offers came in.  Cindy’s background was in the Pharmaceutical Industry as a senior training executive.  One position was in the same industry doing what she had done before.  Another position offered was from major healthcare provider in the Bay Area, Kaiser Permanente.  This was a chance do to something “different,” not just the same thing she had been doing for Pharmaceutical companies.  Cindy chose the second position, allowing her to expand her skill set.

Good Career and Financial Plans were Key to Successful Transition

Cindy also appreciated being able to consult with her personal financial advisor during this time to give a balanced, 3^rd party assessment of their financial situation.  Cindy and Eric consulted him on what accounts to access when they needed cash and whether or not to make certain large purchases.  Cindy says that having a professional financial advisor during this period gave her peace of mind.

Cindy says that she really learned a lot about herself during this period of unemployment… that she was resilient and positive even during trying circumstances.  She benefited from company provided outplacement services which stressed having a good career plan.  Using these services helped her to keep a positive outlook because it provided structure and a support group to keep her on task and accountable.

While being “down-sized” or laid off is never pleasant, it can be a positive, growing experience.  It can lead you into a different direction with new industries, positions and experiences.  It is important to be prepared for the unexpected – having a financial cushion.  Future articles will focus on how to build a financial cushion and what accounts to access in an unemployment crisis.