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The number is in the account. It is more money than you have ever held and the smallest number for what it has to cover.

Watching the severance hit the account is one of the most disorienting moments of a layoff. There is the brief, almost involuntary relief — the visible number, the buffer, the proof that the company at least owed you something. And underneath it, sharper, the awareness that this is what your years there were converted into. A wire transfer in exchange for the calendar that used to belong to you. You are allowed to feel both. Most people do. The relief is not betrayal of the grief, and the grief is not ingratitude for the relief. They live in the same week. The one thing that does not help is treating the severance as windfall. It is not a bonus. It is the runway. What you do with it in the first thirty days mostly decides what kind of search you can run in the next six months.

What to do right now

In the next hours.

  1. 01

    Move it out of checking, today

    Severance sitting in checking gets spent unintentionally over weeks. Move the bulk into a high-yield savings account — most pay between four and five percent right now — and keep one to two months of expenses in checking. The interest alone over a six-month search is meaningful. The bigger benefit is friction between you and impulsive decisions.

  2. 02

    Run the runway math against the new number

    Severance plus existing savings, divided by real monthly burn. That number is your runway in months. Most people are surprised in both directions — the runway is longer than the panic suggests, and shorter than the relief suggests. Naming the actual months changes the urgency dial on every other decision this quarter.

  3. 03

    Confirm the tax treatment before you spend

    Severance is taxable income. Most companies withhold at the supplemental rate of twenty-two percent federal, which is often less than your marginal rate. That means more taxes are due in April. Set aside an additional ten to fifteen percent of the severance in a separate account so you are not blindsided at tax time. Talk to a tax professional if the amount is large.

  4. 04

    Decide on COBRA versus marketplace this week

    Severance often comes with a window of subsidized COBRA. Compare it to marketplace plans in your state — most laid-off workers qualify for substantial subsidies because severance is one-time income and unemployment counts at a lower rate. The healthcare decision can swing your monthly burn by hundreds of dollars. Run the numbers before the COBRA election deadline.

  5. 05

    Do not make a big purchase for sixty days

    Not the car, not the house, not the renovation, not the trip you booked the day the email landed. Severance often triggers a relief-driven spending spike that the budget cannot absorb. Sixty days of waiting on any non-essential purchase costs nothing and protects the runway from the version of yourself that is not thinking clearly yet.

A note before the search begins

Before any of that.

If severance feels heavier than it should, that is because of what is wrapped up in it. The years of overwork that maybe got you a few extra weeks. The sense that the number, however large, never actually accounts for what was given. The relief that the company did the right thing, mixed with the anger that the right thing still meant your name was on the list. Money does not resolve grief. It buys time. The work of grieving the role, the team, the version of yourself who walked into that office on Monday — that work is still ahead. The severance is not a substitute for it. It is the floor under it. Use the floor for what it is.

How CareerCanopy helps

What the companion does today.

A runway plan that starts from the actual number
We build the runway calendar from your real severance, real savings, real expenses, and real expected unemployment income. Not generic advice. The calendar shows what you have, what it covers month by month, and at what point a different decision becomes necessary.
A search timeline that fits the runway
If the severance gives you eight months of runway, the search plan looks different than if it gives you three. We build the cadence and target list against your specific timeline, so the work is sized to the resources rather than to a generic playbook.
Decisions made in advance, not in panic
Bridge work. Bigger purchases. Withdrawals. Family backstops. We help you decide what those decision points look like before you are at them — so the choices made later are calm choices, made against a plan, instead of reactive ones.

Scripts for this moment

The exact words, if you want them.

  1. 01
    What to say when negotiating severance

    A short counter-offer email and a phone script for negotiating severance after a layoff. Specific asks, calm tone, no apology.

All scripts →

Questions

Common questions

How long should severance last for a normal job search?

Most layoff severance covers two to six months of expenses depending on tenure and seniority. Combined with unemployment, that often stretches to three to nine months of runway. The right comparison is your real burn against the real number — not a generic ratio. Build the runway calendar early so you know which month is the decision month.

Should I pay off debt with severance?

Carefully. High-interest credit card debt — usually anything over fifteen percent — is worth aggressively paying down. Lower-interest debt like a mortgage or student loans is usually better left in place during the search, because once severance is gone, it is gone. Cash flexibility during a search is worth more than a small interest savings.

Will severance affect my unemployment benefits?

It depends on the state and how the severance is structured. Some states reduce or delay unemployment while severance is being paid out. Lump-sum severance is treated differently than continuation pay in many states. Check your state unemployment site for the specific rule. Filing on time is still important even if benefits are delayed by severance.

Should I invest the severance in the market?

Generally no. Severance is runway, not investment capital. Investing it in equities means the value can drop right when you need it most. A high-yield savings account or short-term Treasury bills are the standard places — safe, liquid, and earning meaningful interest in the current rate environment. Talk to a fiduciary financial advisor for amounts over six figures.

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