Introduction

Imagine this- You wake up to the unwelcome news of a layoff. In this volatile and fast-changing job market, where urban unemployment climbed to 6.8% in early 2025 and youth unemployment was hovering near 19% due to the shift to AI in IT, waking up to news of a layoff is very relevant. But you can always protect your wealth and recalibrate. At Motilal Oswal, we are focused on helping you navigate through tough times in pragmatic, India-centric ways. This blog will explain how to reassert control using liquidity, adherence, and safe assets to protect your financial future.

Step 1: Map Your Financial Runway

Your initial move is to pause and examine.

Get the numbers:

- Last paycheck, severance, and bonuses: Cash in your pocket today.

- Unemployment benefits: Under the Employees' State Insurance scheme, you can claim up to 50% of your average daily wages for 12 months after 3 years of contributions.

- Monthly essentials: Limit rent to 30% of your previous income, then include your groceries, utilities, and EMIs.

- Deduct the expenses from the inflows: divide by your cash buffer, and go for a 6–9 months' runway. This is critical in an environment where medical inflation is 12% a year.

Step 2: Don't Panic Sell Equities

Market drops, as we have witnessed from the global tariffs in 2025, make you want to run for the hills and sell everything. Don't lock in those losses. Instead, follow the ladder of cash raising.

1. Emergency savings - Keep your funds in a high-yield bank account offered at 3–4% interest with no risk and no fee access to that cash.

2. Liquid debt funds - Averaged a return last year of 8.5% and had minimal volatility.

3. Taxable non-retirement holdings - Offset capital gains at tax time.

Step 3: Use Retirement Funds Wisely

Your EPF and NPS are lifelines, not loot.

EPF Unemployment Withdrawal (2025 Rules)

- After 1 month unemployed: Withdraw 75% of balance, continuity for pension stays intact.

- After 12 months: Unlock the remaining 25%.

- Interest rate: 8.25% keeps compounding.

Open Demat account -  Start investing with a quick setup

NPS Emergency Access

- Limit to 25% advances for housing or medical needs.

-Full raids can incur penalties and take away 20–30% from your nest egg.

 Safe Investment Options to Rebuild & Protect

When safety is a priority, focus on low-risk investments that offer a balance of safe investments at a high return. Here is your course of action:

 Fixed Deposits (FDs): The Best Safe Investment Options

- Returns: 6.5–7.5% for 1-5 years.

- Safety: DICGC insurance coverage up to ₹5 lakh per bank.

- Convenience: You can take money out of your fund early, but you will incur a small penalty.

Public Provident Fund (PPF) – the safest place to invest money

- Lock-in period: 15 years, currently 7.1 %

- Tax benefit: Exempt 100 % under Section 80C.

-  Post Office Monthly Income Scheme: Best Investment Money Solution, No Risk

- Best for cash flow: Good for during your job search-style payments.

 Bonus Low-Risk Picks

- RBI Floating Rate Bonds: 7–8% with liquidity.

- Sovereign Gold Bonds: 2.5% extra yield + gold price upside.

- Diversification Suggestion: 40% in fixed deposits, 30% in top-ups to PPF/NPS, and 30% in ultra-short debt funds to protect against 5% inflation while compounding quietly.

Lifestyle and Employment Search Hacks

- Reduce discretionary spending - No more than 15-20% should be spent outside of eating and extravagant plans

- Start SIPs in hybrid funds - Average 3-5 year returns of 12% with built-in debt cushions

- Network - Festival hiring pushed rural LFPR to 55 % in July 2025

Your Action Plan Starts Today

There is nothing worse than losing a job. It’s a pivot, not a meltdown. Use your cash buffers as needed, tap EPF smartly, and keep fresh funds parked in safe investment options. India needs 7.85 million non-farm jobs yearly; those who prepare win. Review your portfolio, build that 6-month fund, and invest in resilience. Your comeback is loading.

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