What happens when high paid workers lose their jobs? (employment, 401k, collect)

[sas0814]

After the announcement about MF Golbal laying off their entire workforce, I started thinking what happens to these people.

It always sad when someone loses their job, but the average person can somehow survive on unemployment because they didn't have much to begin with.

What about those high paid execs and workers in those NYC firms and companies that go belly up or bankrupt suddenly.

These are the people in my town that have million dollar homes, kids in private school and all kinds of other outrageous expenses.

How do they cope losing a six figure salary, with a stay at home wife that doesn't contribute financially.

I read the MF global people aren't getting severance, 401k's, and benefits are ending after November.

It's been happening a lot in NY and other big cities, but I only see stories of the low wage workers coping, not the wealthier ones.

What do they do?

[NJBest]

Unemployment Insurance Benefits

[sas0814]

Originally Posted by NJBest

Unemployment Insurance Benefits

I know, but if you made say $200,000, how can you continue to live the lifestyle you have on UI?

Even if you planned to sell everything, thats takes awhile and the bills don't wait.

[NJBest]

Originally Posted by sas0814

I know, but if you made say $200,000, how can you continue to live the lifestyle you have on UI?

Even if you planned to sell everything, thats takes awhile and the bills don't wait.

If you make $200,000... your unemployment benefit payment is equivalent to $100,000 income... for up to 6 months or whatever your plan is. They'll have to cut back, but should be enough to pay their bills.

People with high income typically save a good portion of it rather than spending it anyways. I don't think cutting their salary down to half will kill them too much.

[joe from dayton]

I guess they have to do what others in their situation do: They sell things, they get a smaller house, they stop taking vacations, they stop eating out and going to the movies, they stop paying their mortgage and save money while waiting for the bank to take their house, etc.

[bobtn]

NJBEst:"If you make $200,000... your unemployment benefit payment is equivalent to $100,000 income"

What? NY max payment is around $400 per week.

[NJBest]

Originally Posted by bobtn

NJBEst:"If you make $200,000... your unemployment benefit payment is equivalent to $100,000 income"

What? NY max payment is around $400 per week.

That's only state unemployment. You're forgetting to add on private unemployment insurance. It usually covers up to 50% of your income.

[Union Proud]

Originally Posted by NJBest

If you make $200,000... your unemployment benefit payment is equivalent to $100,000 income... for up to 6 months or whatever your plan is. They'll have to cut back, but should be enough to pay their bills.

Show me a link to back up your statement. Not trying to call you out. I think the most benefit you can collect is $600. They will have to cut way back. They have a formula for the amount and 2011 maximum benefits $573.

[NJBest]

Originally Posted by Mr. Whips

Show me a link to back up your statement. Not trying to call you out. I think the most benefit you can collect is $600. They will have to cut way back. They have a formula for the amount and 2011 maximum benefits $573.

Private unemployment insurance? | Bankrate.com

https://www.incomeassure.com/

You would have to be pretty careless to bet on never losing your job.

There's others... Most are typically offered through clubs or HR and not public.

[andywire]

The smart ones have plenty of money saved up and live off the dividends from stocks or interest from bonds. My dad wasn't rich or anything, but he's been living off his dividends for 5 years now. He won't work for anything under $15/hr, so he figures it's the end of the line for him.

I'm sure these newly unemployed execs are worried, but they have far less to worry about then run of the mill workers like you or I. 3% of 1 million dollars is $30,000 a year. Add to that another 15K or so, whatever they get from unemployment, and that's 45K a year. There are ways to up that percentage by increasing risk, but still, some people make that 3% a year by going to work every day. These guys do it with a few clicks of a mouse, or a call to their brokerage You or I wouldn't make that $30,000 on UI.

As for their expensive lifestyles... Who says they live expensive? Warren Buffett claims he lives on 50K a year, and I can believe it. Smart money doesn't necessarily live the glamorous lifestyles people always think. You can have money, or you can have things, or you can have both in appropriate quantities. Markets go up and down, and they know this.