What this tool does
The Layoff Runway Planner calculates how many months your money will last after losing your job. It takes into account your savings, severance package, unemployment benefits, COBRA health insurance costs, and both essential and non-essential monthly expenses. The tool provides two runway estimates: one based on essential spending only (lean mode) and one with full spending intact. It also visualizes your savings depletion over time and provides a health score for your financial runway so you can make informed decisions about spending cuts and job search urgency.
How it calculates
The calculator uses three core formulas:
Total Liquid Funds = Savings Balance + (Severance Weeks x Weekly Pay Before Layoff). This represents all the money available to you after the layoff.
Monthly Burn Rate (Essential) = Monthly Essential Expenses + COBRA Cost - Unemployment Benefit - Other Monthly Income. This is the net amount leaving your accounts each month when you cut to bare essentials.
Runway Months = Total Liquid Funds / Monthly Burn Rate. This tells you how many months until your funds are depleted.
The full spending burn rate adds non-essential expenses to the essential burn rate, giving you a second, shorter runway estimate. The savings depletion timeline projects your remaining balance month by month by subtracting the burn rate from the starting total each month.
Who should use this
This tool is designed for anyone who has recently been laid off or is anticipating a potential layoff and needs to understand their financial position. It is also useful for people building an emergency fund who want to see how many months of coverage their savings provide, HR professionals helping employees understand their severance package impact, financial advisors working with clients through job transitions, and anyone evaluating whether to voluntarily leave a job and wanting to know how long their savings will last.
Worked examples
Example 1: A software engineer with \$25,000 in savings receives 8 weeks of severance at \$1,923/week (roughly \$100k annual salary). Monthly essential expenses are \$3,500, COBRA costs \$600/month, unemployment pays \$1,800/month, and non-essential spending is \$800/month. Severance = 8 x \$1,923 = \$15,384. Total funds = \$25,000 + \$15,384 = \$40,384. Essential burn = \$3,500 + \$600 - \$1,800 = \$2,300/month. Essential runway = \$40,384 / \$2,300 = 17.6 months. Full burn = \$2,300 + \$800 = \$3,100/month. Full spending runway = \$40,384 / \$3,100 = 13.0 months.
Example 2: A marketing manager with \$10,000 in savings receives 4 weeks of severance at \$1,250/week. Monthly essentials are \$2,800, COBRA is \$500, unemployment is \$1,500, and non-essentials are \$600. Severance = \$5,000. Total funds = \$15,000. Essential burn = \$2,800 + \$500 - \$1,500 = \$1,800/month. Essential runway = \$15,000 / \$1,800 = 8.3 months. Full spending runway = \$15,000 / (\$1,800 + \$600) = 6.3 months.
Limitations
This calculator assumes a constant monthly burn rate, but real expenses fluctuate month to month. Severance pay may be subject to income tax and payroll deductions, which this tool does not account for. Unemployment benefits typically expire after 26 weeks in most states, but the calculator assumes they continue for the entire runway period. COBRA coverage is generally limited to 18 months. The tool does not factor in investment returns on savings, inflation, or changes in expense levels over time. It also does not account for potential income from selling assets, borrowing, or other financial strategies. For a comprehensive layoff plan, consult a financial advisor.
FAQs
Q: Should I use gross or net severance pay? A: Use gross weekly pay to get the total severance figure. Keep in mind that taxes will reduce the actual amount you receive, so your real runway may be slightly shorter than the estimate.
Q: What counts as essential expenses? A: Housing (rent/mortgage), utilities, groceries, transportation, minimum debt payments, and any insurance not covered by COBRA. Do not include dining out, entertainment, or subscriptions as essential.
Q: How do I find my state's unemployment benefit amount? A: Search for your state's unemployment insurance calculator online. Most states pay a percentage of your previous earnings up to a weekly maximum. Multiply the weekly benefit by 4.33 to get an approximate monthly figure.
Q: What if I have a spouse or partner who also earns income? A: Enter their take-home income in the "Other Monthly Income" field. This will reduce your monthly burn rate and extend your runway.
Q: Should I include retirement accounts in my savings balance? A: Generally no. Withdrawing from retirement accounts incurs penalties and taxes. Only include liquid, easily accessible funds like checking, savings, and taxable investment accounts.
Q: How long does the average job search take? A: Job searches typically take 3-6 months, though this varies widely by industry, role level, and market conditions. Senior roles often take longer. Use the essential-only runway as your planning target.
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