What would happen to you if you were to lose your job? Do you have a backup plan? Studies show that a graduate just joining the workforce now will work for seven or eight companies during their career. There will be some gaps in employment and not all the gaps will covered with a severance package.
I recommend that you create your own severance plan. First, you need to know how much you will need to survive per month. Then you will need to understand how long it will take to find another equivalent job. Most studies agree that for every ten thousand dollars you currently earn equals the number of months it will take to find your equivalent job. Of course this is just a rule of thumb, some will take longer and some less.
Now you have an idea how much money you will need survive while looking for your next job. So while you are saving for your retirement, you should also create a ready cash reserve. This cash can be invested but must be able to be liquidated quickly. Work with your financial planner to create a plan.
Having a safety net at your disposal will free you of being tied to your company. You will be able to leave your job at any time for any reason and also be prepared for any unexpected gaps in employment. This will create a feeling of independence that will allow you to focus on “doing” your job without worrying about “keeping” your job.
