Amid recent RTX workforce reductions, employees are facing the uncertainty of a potential layoff — a reality for many highly specialized professionals across similar industries. A layoff is a career event and a financial planning opportunity that could impact your cash flow, retirement, and investments. Having worked with RTX employees and other clients across their career journeys, I’ve observed the key actions that have positioned them well for the future, as well as the mistakes that have led to missed opportunities and long-term consequences.
As a former RTX employee, I’m familiar with the company’s compensation and benefit plans, standard severance package structures, and considerations unique to its professionals. If layoffs are looming, common in your industry, or you simply want to prepare for one, here are five steps to take.
1. Breathe, Don’t Panic
A layoff, or even the fear of one, is stressful and emotional. However, when navigating decisions that could affect your long-term future, it’s important to approach them with a rational mindset. Before making any rash financial decisions, take a moment to breathe and look at the bigger picture. Could this change provide opportunities you never considered before?
Schedule a meeting with your financial advisor to voice your concerns, ask questions, and explore your options objectively. Gaining clarity on the implications and potential paths forward can help you make more informed decisions rather than emotional ones.
2. Avoid Rushing 401(k) Changes
While a common misconception, a layoff doesn’t mean you have to immediately move your 401(k). Staying put gives you valuable time to evaluate your options and make more informed savings decisions. If you’re considering a rollover or withdrawals, it’s critical to understand the tax implications, as well as the benefits you could lose. For example, the Rule of 551 applies to employees who separated from the company in the year they turned 55 or after, permitting them to take early withdrawals from their 401(k) without the 10% penalty. If you rolled over your funds before considering this, you could lose that opportunity.
Additionally, if you have an outstanding 401(k) loan, review the repayment terms following a separation. If you’re considering an early withdrawal outside the Rule of 55, I strongly recommend consulting a financial and tax professional to understand the tax implications and any long-term impacts on your retirement.
3. Understand Timely Benefit Decisions
Following a layoff, you will likely need to make important, time-sensitive decisions regarding severance packages, health insurance, and stock options.
- Severance Packages: Ensure you understand what you will receive, such as whether you will receive a payout for unused PTO, and if there is a deadline to accept.
- Healthcare Benefits: Review when your coverage will end and schedule your annual physical, eye exams, and dental appointments while you can. Explore and compare your insurance options, including joining a spouse’s employer plan or signing up for the Marketplace during a special enrollment period if you qualify.2 You may also be eligible for COBRA, which typically allows you to stay on your insurance plan for 18 months.
- Stock Options and Deferred Compensation: A layoff may change elections, vesting schedules, and distributions if you hold stock or participated in the deferred compensation plan. Review the terms, exercise windows, and forfeiture rules of your agreement before taking action.
4. Plan Ahead for Taxes
A layoff can affect your tax picture significantly, which could be surprising if you’re not prepared. A bonus, payout for unused vacation, vesting events, stock distributions, and other severance terms may increase taxable income, affecting how much you will owe, which ultimately impacts your cash flow. By understanding the potential implications, you and a professional can work together to identify tax-planning opportunities, adjust your withholdings, make informed elections, and plan for quarterly taxes before year-end, if necessary.
5. Understand Your Cash Flow Plan Before Making Any Investment Decisions
Reviewing your budget and understanding how long your savings will last can inform how quickly you need to make decisions regarding accessing critical capital or finding a new job. I’ve often seen professionals sell investments at the wrong time, dip into a retirement plan too early, and make other emotional choices following a layoff, decisions planning could have helped avoid. A financial professional can help review your cash flow needs, provide guardrails for your budget including safe spending ranges, and make temporary adjustments. Here’s how you can get started:
- Have at least three to six months of living expenses set aside in a liquid savings account, such as a high-yield savings account, which you can easily access during an emergency or unexpected life event, such as a layoff. Your emergency fund may require more or less depending on your needs or marketable skills.
- Look at your fixed monthly payments, such as your mortgage and utilities, to determine how long your emergency fund will last.
- Consider temporarily trimming discretionary expenses, such as a gym membership, entertainment subscriptions, or adjusting the frequency of dining out to direct those funds toward your emergency fund and non-discretionary spending.
Final Thoughts: Navigate a Layoff with Clarity
A layoff can be overwhelming, making every decision feel urgent, from how to protect your future security to what comes next. Working with a trusted advisor can help bring clarity to an uncertain time and uncover options you may have yet to consider, so you can approach decisions from a broader, more informed standpoint. Many times, the most meaningful impact can come from having an objective thinking partner.
A financial plan provides a framework for understanding key decisions, such as:
- How long of a break can you take?
- How much do you need to earn, now or later, to stay on track toward retirement?
- Can you still retire when you wish, or do you need to consider delaying your timeline?
As a former employee, I’ve worked with many RTX employees through layoffs and early retirements. I also have firsthand experience with my career transition that initially resulted in a meaningful pay difference to pursue a passion. I understand the decisions that come with a separation, from equity to health insurance, and how employees can avoid common mistakes and feel more empowered.
If you already have a plan in place, an advisor can help strengthen your position, with specialized support and advanced planning options tailored to your situation. If you’ve yet to partner with an advisor, a layoff or potential layoff is a good opportunity to turn toward a trusted resource, such as the team at CCMI, which can offer support, perspective, and strategies for your next chapter.
If you’re experiencing a layoff or want to proactively prepare for one, please contact us to discuss your circumstances and how we may offer support. You may also view more RTX-specific resources here.
Sources:
1 IRS. (2025, December 11). Retirement topics – Exceptions to tax on early distributions. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions.
2 HealthCare.gov. (n.d). Special Enrollment Period (SEP). Retrieved July 20, 2026, from https://www.healthcare.gov/glossary/special-enrollment-period/.
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