What to do when you face financial uncertainty


 

Key Points

  • When you face a job loss, reduced income or future concerns, acting early can help you weather the uncertainty.
  • Below are steps that can help you through the situation.
  • Your advisor will also recommend strategies that can place you on more solid footing.

You have a clear vision of your financial future, with a personalized plan to get there. But when you face a job loss, reduced income or future concerns — as many have the past year — what can you do?

As with other financial concerns, talk to your advisor right away. They will recommend strategies that can place you on more solid footing and help you navigate the uncertainty. Here are additional actions to consider.

 

If you’re unemployed or furloughed

  • File for unemployment benefits. Under the pandemic relief package, the weekly supplemental benefit is $300 per week, through Sept. 6, 2021.
  • Review and revise expenses, where possible. Manage expenses prudently, but don’t take it to the extreme.
  • Maintain health and other insurance coverage. A short-term save by cancelling a policy could open you up to a substantial long-term risk. Individuals who involuntarily lose their job and choose employer health insurance through COBRA (for up to 18 months) will receive a 100% federal subsidy for the premiums, April 1 through Sept. 30, 2021.

 

If you’re facing reduced income or future concerns

  • Evaluate your cash situation with your advisor. If you have negative cash flow (expenses are higher than income) and face a shortfall, consider how much you can cover with cash savings already set aside.
  • Consider pausing long-term savings, such as a 401(k). If you have limited savings, this could help you manage through the cash slump.
  • Explore alternative options for cash. For example, a home equity line of credit could help you cover essential expenses. Margin loans and pledge loans are possibilities to consider with your financial advisor.

 

Stay on track for a comeback

Most investors (73%) have experienced at least one major financial setback of some kind in their life, according to the Financial Comebacks study from Ameriprise. And while it’s costly and takes time to recover, 89% of those we surveyed either made a comeback or are on the path to recovering.1

Your financial advisor will help you find the path forward. They know your financial situation best and will sort through the uncertainty to help you feel confident about your actions and solutions.