Your runway is savings plus severance, drawn down by essential spending and partly refilled by unemployment benefits while they last. On the calculator’s defaults that is 7.63 months, and the shape matters as much as the number: the burn steps up sharply the day benefits end.
Most people who just lost a job do this math as one division, savings over spending, and get it wrong in both directions: too pessimistic while benefits pay, too optimistic about what happens when they stop. This guide walks the honest two-phase version with the layoff runway calculator, every figure computed by the same engine the calculator runs.
How long will your savings last after a layoff?
Until the cash hits zero across two phases: a slower burn while unemployment benefits pay, then the full burn after they end. On the defaults, 15,000 dollars of savings lasts 7.63 months, six months at a 1,550 dollar burn and then 1.63 more at 3,500 dollars.
Here is the default scenario in full: 15,000 dollars of liquid savings, 3,500 dollars of essential monthly spending, no severance, and a 450 dollar weekly benefit for 26 weeks. The benefit converts to 1,950 dollars a month and the 26 weeks convert to exactly six months, so the first phase burns 3,500 minus 1,950, or 1,550 dollars a month. At month six the benefit stops and the burn becomes the full 3,500:
The single-division estimate misleads here in a specific way. Average the whole thing and you might guess 15,000 over something like 2,300 blended, call it 6.5 months, or naively 15,000 over 1,550 and feel rich. The engine’s answer is 7.63 months, and more usefully, it is a date: money that runs out 7.63 months from a layoff today runs out in a specific calendar month, which the calculator shows. A job search with a known horizon is a different psychological project than one with a vague one.
What counts as essential spending when income stops?
Only what you must keep paying: housing, food, utilities, insurance including health coverage, minimum debt payments, and transportation. Everything discretionary is assumed paused, which is what makes the runway an honest worst-case floor rather than a lifestyle projection.
This is the same essential-spending discipline the emergency fund framework uses, and the two tools are deliberately siblings: the emergency fund calculator sizes the cushion before the emergency, this one spends it during. Two lines deserve special honesty. Health coverage often gets more expensive after a layoff, not less, whether through COBRA continuation or a marketplace plan, so put a real post-layoff number in the spending figure rather than your old payroll deduction. And minimum debt payments belong in essentials, but this is also the moment the debt payoff order conversation pauses: minimums protect credit; extra principal payments can wait until income returns.
How do severance and unemployment change the math?
Severance is a lump-sum head start: weeks of pay converted at your take-home rate and added to savings on day one. Unemployment is a flow: a weekly benefit that reduces the burn while it lasts. The calculator takes both, and both default conservative because neither is guaranteed.
Severance first, with the honest caveat: under the Fair Labor Standards Act, severance pay is a matter of agreement between employer and employee, not a requirement, so the calculator defaults to zero weeks. Where it exists, the conversion is mechanical: at 5,800 dollars of monthly take-home, a week of pay is 1,338.46 dollars, so eight weeks is a 10,707.69 dollar lump that lifts starting cash to 25,707.69 dollars and the runway from 7.63 to 10.69 months.
| Scenario | Starting cash | Runway |
|---|---|---|
| No severance (the default) | 15,000.00 dollars | 7.63 months |
| 8 weeks of severance | 25,707.69 dollars | 10.69 months |
| No unemployment benefit entered | 15,000.00 dollars | 4.29 months |
The third row is the one to respect: with no benefit at all, the same savings last 4.29 months. The spread between 4.29 and 7.63 months is the benefit doing its job, and it is why the benefit figure deserves a real number rather than a guess.
What does unemployment insurance actually pay?
It depends on your state, genuinely. Unemployment insurance is a joint federal-state program: each state sets its own weekly benefit formula and maximum, and per the Department of Labor’s fact sheet, benefits replace a portion of recent earnings and last up to 26 weeks in most states, though several pay fewer.
This calculator refuses to fake precision here, and that is deliberate. The 450 dollar weekly default is a round, adjustable placeholder, not an estimate of your benefit. The real figure comes from your state: file promptly, and look it up through your state’s unemployment office or the CareerOneStop benefits finder. Two more state-specific realities the model omits on purpose: many states have a waiting week before benefits start, and most reduce the weekly benefit when you earn above a threshold, so the combination of full benefits and full side income in the calculator is the optimistic case. One federal fact is uniform, though: per IRS Topic 418, unemployment compensation is taxable income.
What extends a runway the most?
Cutting essential spending, because a cut is certain the day you make it and it compounds through both phases. Replacement income helps more per dollar on paper, but it is hypothetical until landed, and in most states side earnings also shave the benefit.
The calculator’s what-extends-it table re-solves the same math under four changes, engine-computed on the defaults:
| Scenario | Runway | Gained |
|---|---|---|
| Cut essential spending 10 percent | 8.5 months | +0.8 months |
| Cut essential spending 20 percent | 9.5 months | +1.9 months |
| Add 500 dollars/mo side income | 8.9 months | +1.3 months |
| Add 1,000 dollars/mo side income | 10.7 months | +3.1 months |
Read it with the certainty column in mind. The 20 percent spending cut buying 1.9 months is a decision you can execute this week. The 1,000 dollars of side income buying 3.1 months requires the income to exist, keep existing, and not trigger your state’s partial-benefit offset. Do the cut first, then let real side income be the upside surprise. Parking whatever cash you hold in a high-yield savings account adds a small tailwind, but the interest is rounding next to the burn; liquidity is the point.
How do you rebuild once you land?
Refill the cushion before resuming anything optional, sized by the same essential-spending number the layoff just taught you precisely. The one silver lining of a layoff is perfect information: you now know your real monthly floor, because you lived on it.
The calculator hands off directly to the emergency fund calculator with your spending and remaining savings, and how much emergency fund you need covers sizing the target, three to six months for most households, more for single-income or specialized roles. If the layoff also exposed the housing cost as the budget’s real problem, that is a different conversation, and the house poor calculator has the four checks for it.
Your next step
Run your own runway today, not after the anxiety peaks. Open the layoff runway calculator, enter your liquid savings, an honest essential-spending floor, any severance in weeks, and your state’s real benefit figure from the CareerOneStop finder, and read the runway, the run-out month, and the what-extends-it table. If you are not laid off and the number scares you, that is the emergency fund conversation, and today is the cheap day to have it.
This is educational information, not financial advice or a benefits determination. The figures here are the calculator’s illustrative defaults, computed by the same engine the calculator runs; your state’s benefit rules, taxes, and your real spending will produce different results.