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Another Unemployment Article – Because I Can

I just dug this up from MSN money. This article was written back before people realized that bundling up sub-prime loans into massive securities, pawning them off to investment banks, selling them to Europe, and then having Europe pass them off to the Asian markets was a HORRIBLE idea. Let’s take a look at how things have changed:

The article starts off by telling people to:

Apply for unemployment benefits. If you think this is a no-brainer, it’s only because you haven’t seen the e-mails I get from readers. Some worry that applying for unemployment will affect their credit (it won’t) or that jobless benefits are some kind of welfare (they’re not; your employer paid into the system in your behalf).

The earlier you apply, the earlier you’ll get your first check. Most states have a two- or three-week waiting period based on when you file, not when you lost your job. Unemployment benefits typically last for 26 weeks, although during periods when the state jobless rate is high, those benefits may be extended for an additional 13 to 20 weeks. [Right now California is at an unprecedented 76 weeks – In fact, this is so long, that their computer systems couldn’t process the requests for new checks, and they are now running 8 weeks behind on claimant’s benefits.]

The amount you get won’t replace your old paychecks — far from it. The national average unemployment check is about $270 a week, and the maximum you can receive depends on your state. In high-cost Connecticut, it’s $501 a week; in Mississippi, it’s $210. Contact your state’s employment office for details on how to apply and how much you’re likely to get. [I initially began receiving $376 a week after being canned for a $31,000/yr job. Then the federal government added another $25 a week to that number during my second extension. The maximum benefit amount for a two-week check in CA is $952.]

Unemployment benefits are typically available only to workers who lost their jobs through no fault of their own. You generally can’t get benefits if you were fired for cause or voluntarily quit your job. If the facts are in dispute, though, go ahead and file; you can always argue your case, and you’ll have a chance to appeal if your state’s unemployment office decides against you. [I was fired from Nordstrom after catching my manager snorting Cocaine in her office. She framed me for “time clock fraud” (which, on a side note, is bizarre – considering I was making commission, and she framed the situation to make it look like I was trying to milk the company for extra hours, which I didn’t need because I was… MAKING COMMISSION!.. dumb broad.) Anyway, it worked. She got me fired, and kept both her coke habit and her job.] So remember, folks, go buy your Christmas gifts from a hopped-up Nordies sales broad! She needs to support her coke/meth habit and pay her deadbeat boyfriend’s rent! Anyway, the point is: I was fired from Nordstrom, and they were subsequently forced to pay for my unemployment benefits for wrongfully terminating me. Worked out okay in the end. I gained invaluable sales experience, banged a bunch of fresh, young hotties, and got a bunch of free shit.

A Close Dramatization of My Former Nordstrom Manager

Anyway, I thought you might find that interesting.

Also, as someone who currently works in the risk management sector of finance, here’s some awesome advice for those who are/were intelligent enough to have a 401(k) and (hopefully) a whole life policy in place:

Conserve your cash. Paying down debt is generally a good idea — until you’ve lost your job. Then cash becomes king.

If you’ve been making extra payments on your mortgage or student loans, redirect that money into savings. Negotiate with your credit card companies to get a lower rate (see “Get a better deal — with a threat“) or use balance-transfer offers to move your debt to a card with a better rate. Pay the minimums on your debt and get deferments on any loans that offer them. Most utilities and telephone companies offer “lifeline” or low-cost service for people with low incomes; check their Web sites to see if you qualify. [I haggled down to 3.0% from 14.9%! – This will save me roughly $12K over the next decade in interest payments.]

Don’t tap your retirement funds if you can avoid it. It can be tempting to raid these pots of money, but the financial repercussions are so serious that you should avoid such withdrawals if at all possible.

Not only will you lose one-third to one-half of the withdrawal to taxes and penalties (most, if not all tax-free or tax-deferred retirement policies have a 10% minimum penalty in addition to State and Federal taxes if you withdraw from your cash value before the age of 59.5), but you lose forever the tax-deferred returns you could have earned. A $10,000 withdrawal now from your individual retirement account or 401(k) means $109,000 less for your retirement, assuming the money would grow at an average 8% annual rate for 30 years. Also, if you’re pumping $95/month (less than $4/day!) into a whole life policy, that retirement number hits seven (7!) figures come age 65-70.

It’s an especially bad idea to use retirement money to pay credit card bills. In a worst-case scenario, your credit card debt can be wiped out in bankruptcy court, while your retirement funds would be protected from creditors. (Hey, it’s only 7 years! Besides, everyone is doing it! Even the Jones’…)

I should also take this time to note that a 401(k) or a 403(b) alone will NOT be enough to live off of come retirement. If you’re under 45, you should IMMEDIATELY look into term life policies, small whole life policies, and if you can afford the premiums – a larger whole life policy. You will earn dividends on your policy, accumulate a cash value, and watch your cash (which is tax-free, I might add) snowball while you work up to your predetermined retirement date.

Your Future: (If You Heed My Advice)

Generally, people who rely in 401(k)’s and SSI ALONE at retirement will run out of money within the first ten years of retirement, or face bankruptcy and massive debt – not excluding the total liquidization of all assets and your estate – in the event of a terminal illness, disability or long-term care situation. You should talk with your local financial representative immediately about opening up a beginners life policy. The earlier your start, the cheaper it is, the faster it begins to pay for itself (yes, you heard me right – and this generally happens around year 20), and the more you’ll have at retirement (does $10 million at age 65 sound appealing? It sure does to me.)

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