Financial Planning for the Unemployed

BOSTON (TheStreet) — With the unemployment rate still close to 10%, many Americans have been forced to worry more about surviving in the present than planning for the future.

Nevertheless, as your job situation changes — for better or worse — there are some financial considerations and retirement strategies to ponder, even if they may take a back seat to more immediate concerns.

IF YOU ARE UNEMPLOYED ... :

Kim Segal, a financial consultant for Schwab (Stock Quote: SCHW) (SCHW) , sees job-market uncertainty as validation for the need for good financial planning.

Reducing debt, paying down credit cards and establishing an emergency fund with at least two to three months of salary are moves that would have cushioned the blow of unemployment and can still do so. The lack of such savings can lead to taking on new debt or, worse, raiding your retirement savings, she says.

(SCHW) Employee benefits can be nearly as important as salary. If you lose your job, find out when health, life and disability insurance policies will lapse and what options are available for continuing them.

Consider the pros and cons of holding on to your existing 401(k) plans, waiting for the opportunity to roll the assets into a new employer's plan or launching a self-directed IRA using the assets to have greater control of your investments. An IRA, however, may not be ideal if your old plan held company stock due to the favorable tax treatment it gets in a 401(k).

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