XEQT After a Job Loss: Should You Keep Investing or Cash Out?

In March 2024, my friend Aliya got laid off. She had been a project manager at a mid-size tech company in Waterloo for four years. One Tuesday morning, her entire team got called into a video meeting. Fifteen minutes later, her laptop was locked and her Slack access was revoked.

Aliya texted me that afternoon in a state of controlled panic. Not about the job itself — she was talented and knew she would find something. The panic was about her investments. She had a TFSA with about $42,000 in XEQT and an RRSP with another $28,000. Her first instinct was to sell everything. “I need to be safe,” she told me. “I can’t afford to lose money right now.”

I talked her off the ledge. We sat down together, went through her numbers, and built a plan. She kept every single share of XEQT. Six months later, she landed a better job at a higher salary. Her XEQT portfolio had grown by another 8% during her unemployment. If she had sold, she would have locked in a flat return and missed the recovery entirely.

This post is the advice I gave Aliya — expanded, structured, and written for anyone who is going through (or preparing for) a job loss, layoff, or career transition. It is one of the most stressful financial situations you can face, and the decisions you make about your investments during this period can have consequences that last decades.

1. The First 48 Hours: Don’t Touch Your Investments

When you lose your job, your brain goes into threat-detection mode. Cortisol floods your system. Every financial decision feels urgent. The portfolio you have been calmly growing for years suddenly feels like a ticking time bomb that could blow up your remaining financial security.

This is exactly the wrong time to make investment decisions.

Here is what to do in the first 48 hours after a job loss:

Do:

• Take a breath. Seriously. Nothing in your investment portfolio requires immediate action.
• Review your severance package if you received one
• File for Employment Insurance (EI) immediately — there is a one-week waiting period
• Tell your partner or a trusted friend/family member
• Look at your bank account balance and get a clear picture of your cash position

Don’t:

• Sell any investments
• Make any changes to your XEQT holdings
• Call your brokerage in a panic
• Start moving money around between accounts
• Make any major financial decisions at all

Your XEQT portfolio is not going anywhere. It does not know you lost your job. It is sitting there holding 9,000+ companies across 49 countries, quietly doing its thing. It does not need your intervention, especially not intervention driven by fear.

2. The Emergency Fund Assessment

Before deciding anything about your XEQT portfolio, you need to answer one critical question: how long can you survive on your current cash and liquid savings without touching your investments?

Calculate Your Runway

Now divide your available cash (savings account + chequing account + any severance) by that monthly essential expense number:

Runway = Cash Available / Monthly Essential Expenses

If you have followed the common advice to maintain 3-6 months of expenses in a high-interest savings account or emergency fund, you should be able to weather a job loss without touching your XEQT at all. This is exactly the scenario that emergency fund exists for.

3. The Case for NOT Selling Your XEQT

Let me be direct: in most job loss situations, you should not sell your XEQT. Here is why.

Reason 1: Job Losses Are Temporary; Markets Are Long-Term

The average duration of unemployment in Canada is 15-20 weeks. Some people find jobs faster, some take longer, but the vast majority of employable Canadians are back to work within 6 months. Your XEQT portfolio, meanwhile, has a 20-30 year time horizon. Selling a long-term investment to cover a short-term income gap is almost always the wrong trade.

Reason 2: Selling Locks In Your Current Position Permanently

When you sell XEQT during a stressful period, you are unlikely to buy back in at the same price. You will wait until you feel “safe” — which usually means waiting until markets have already recovered and you are buying at a higher price. This sell-low, buy-high pattern destroys wealth over time.

Reason 3: TFSA Contribution Room Is Precious

If your XEQT is in a TFSA, selling creates a particularly painful situation. You can re-contribute the withdrawal amount, but not until the following calendar year. In the meantime, that money is outside the tax-sheltered umbrella. If you withdraw $30,000 from your TFSA in June 2026 to cover expenses, you cannot put it back until January 2027 at the earliest. And if you spend it in the meantime, that TFSA room is effectively wasted.

Reason 4: RRSP Withdrawals Trigger Tax

If your XEQT is in an RRSP, withdrawals are added to your taxable income for the year. Even though your employment income is lower due to the job loss, RRSP withdrawals will be taxed at your marginal rate and will have withholding tax deducted immediately (10% on amounts up to $5,000, 20% on $5,001-$15,000, 30% on amounts over $15,000). That money is gone from your RRSP permanently — you do not get the contribution room back.

Reason 5: Selling During Downturns Is the Worst Possible Timing

Job losses often coincide with economic slowdowns. If you are laid off during a recession, your XEQT portfolio is likely already down. Selling during a downturn means crystallizing losses and missing the recovery. This is the exact opposite of what a long-term investor should do.

4. When Selling XEQT Is the Right Call

I want to be realistic. There are situations where selling some XEQT is the correct and responsible decision:

Sell if:

• You have no emergency fund and your runway is under one month. Keeping a roof over your head is more important than your long-term investment strategy.
• You are facing debt with high interest rates. If you have credit card debt at 20%+ and no income, the guaranteed “return” of paying off that debt likely exceeds XEQT’s expected returns.
• Your mental health is genuinely suffering. If the combination of job loss and investment risk is causing debilitating anxiety that prevents you from functioning or job hunting effectively, reducing your portfolio risk may be worth the financial cost. Your health matters more than your portfolio.
• You are about to default on essential obligations. Mortgage payments, child support, tax debts — these have severe consequences if missed. If selling some XEQT prevents a default, do it.

If You Must Sell, Do It Strategically

1. Sell from non-registered accounts first. This preserves your TFSA and RRSP room.
2. Sell from your TFSA second. At least there are no tax consequences on TFSA withdrawals.
3. Sell from your RRSP last. The tax hit and permanent loss of contribution room make this the worst option.
4. Sell only what you need for the next 3 months of expenses. Do not liquidate your entire portfolio.
5. Consider selling other investments first if you have GICs, individual stocks, or other holdings alongside XEQT.

5. The Income Replacement Checklist

Before selling any investments, make sure you have explored every other income source available to you:

Immediate Income Sources

• Employment Insurance (EI): Up to 55% of insurable earnings, max ~$668/week in 2026. Apply immediately — there is a one-week waiting period.
• Severance pay: Review your package carefully. Consider whether to take it as a lump sum or salary continuance (salary continuance delays EI eligibility but provides steady income).
• Vacation pay and unused PTO: Ensure your employer pays out all owed amounts.
• Record of Employment (ROE): Confirm your employer submits this promptly — you need it for EI.

Secondary Income Sources

• Freelance or contract work in your field
• Part-time employment to bridge the gap
• Gig economy options (delivery, tutoring, etc.) for immediate cash flow
• Selling unused items (electronics, furniture, etc.)
• Provincial income assistance if EI is not sufficient

Cost Reduction

• Cancel or pause non-essential subscriptions (streaming, gym, meal kits)
• Negotiate bills (internet, phone, insurance — most providers have retention offers)
• Reduce grocery spending (meal planning, cheaper alternatives)
• Pause any non-essential recurring purchases
• Defer large purchases you were planning

The goal is to stretch your cash runway as far as possible so your XEQT portfolio can stay invested and continue compounding.

6. What to Do With Your XEQT Contributions During Unemployment

Your automatic XEQT contributions — the recurring buys you set up on Wealthsimple — need to be addressed. Here is a framework:

If Your Runway Is 6+ Months

You can keep contributing at a reduced rate if you want. Even $50-100/month keeps the habit alive and takes advantage of potentially lower prices during market dips that often accompany economic slowdowns. But do not feel obligated — pausing contributions entirely is perfectly fine when you have no income.

If Your Runway Is 3-6 Months

Pause your recurring XEQT contributions immediately. Every dollar you are not investing is a dollar extending your cash runway. You can restart the moment you have stable income again.

If Your Runway Is Under 3 Months

Pause contributions and shift into pure conservation mode. Focus entirely on reducing expenses and generating income.

How to Pause Recurring Buys on Wealthsimple

1. Open your Wealthsimple app
2. Go to the account where your recurring buy is set up
3. Navigate to your XEQT recurring buy
4. Select “Pause” or “Cancel”
5. Set a calendar reminder to restart it when you have income again

Pausing is not failing. It is a tactical adjustment. The shares you have already bought are still compounding. Your job right now is to protect your existing portfolio while you find your next opportunity.

7. Career Change vs. Layoff: Different Situations, Same Portfolio Strategy

Not every income disruption is involuntary. If you are voluntarily leaving a job — whether to switch careers, go back to school, start a business, or take a sabbatical — the portfolio strategy is essentially the same, with one key difference: you can plan ahead.

Preparing Your Finances Before a Voluntary Career Change

If you know an income disruption is coming, use the months before to:

1. Build a cash buffer of 6-12 months of expenses. This is higher than the typical 3-6 month emergency fund because voluntary transitions often take longer than expected.

2. Increase your XEQT contributions now to front-load as much investing as possible before your income drops.

3. Max out your TFSA and RRSP before you leave, if possible. You may be in a lower tax bracket during your transition, which makes RRSP contributions less tax-efficient — so prioritize TFSA.

4. Consider making RRSP contributions during the transition year. If you will be in a significantly lower tax bracket during unemployment or a career change, you might choose to defer claiming the RRSP deduction and carry it forward to a year when your income (and marginal rate) is higher.

5. Do not sell XEQT to fund the transition. Use your cash savings. The entire point of building the buffer is to keep your investments intact.

The Temptation to “Take a Break” from Investing

During a career change, there is a strong temptation to say “I’ll start investing again once things settle down.” The problem is that “once things settle down” often becomes “once I’m earning more” which becomes “once I’m out of debt from the transition” which becomes “once the market looks better” which becomes… never.

The habit of investing regularly is more important than the amount. Even if you can only contribute $25/month to XEQT during a career transition, maintain the habit. It keeps the muscle memory alive and prevents the dangerous psychological shift from “investor” to “non-investor.”

8. Tax Opportunities During Unemployment

A silver lining of temporary unemployment is that your income is lower than usual. This creates some tax optimization opportunities:

RRSP Withdrawal at a Lower Tax Rate

If you absolutely must withdraw from your RRSP, doing it in a year when your total income is low means you will pay less tax on the withdrawal. For example, if your total income for the year (EI + severance + any employment) is $30,000 instead of your usual $80,000, an RRSP withdrawal is taxed at a much lower marginal rate.

This does not make RRSP withdrawals free — you still permanently lose the contribution room. But if you must do it, a low-income year is the least painful time.

Capital Gains Harvesting

If you hold XEQT in a non-registered account and you are in a low tax bracket during unemployment, you could consider selling and immediately rebuying to realize capital gains at a lower tax rate. This resets your adjusted cost base higher, reducing future tax liability.

This is an advanced strategy with specific rules around superficial loss — consult a tax professional before attempting it.

Maximize TFSA Contributions

If you have unused TFSA room and some cash available, unemployment can be a good time to contribute. You are not getting an RRSP deduction benefit anyway (your income is low), so TFSA contributions give you tax-free growth without wasting a deduction at a high marginal rate.

9. The Emotional Side: Investing Confidence After a Job Loss

Let’s talk about the psychology, because this is where most people go wrong.

A job loss shakes your confidence across every dimension of your life — including your financial decisions. Even if you intellectually understand that XEQT is a long-term investment and should be left alone, the emotional reality of watching your portfolio fluctuate when you have no income is brutal.

Common Emotional Traps

Catastrophic thinking: “What if I never find another job and the market crashes 50% and I lose everything?” This is your brain stacking worst-case scenarios on top of each other. In reality, these simultaneous events are rare, and even if they happen, history shows recovery follows.

Control seeking: When you lose control over your income, you may feel an overwhelming urge to control something — anything. Selling investments gives you an illusion of control. But it is actually giving up the one financial advantage you have: a long-term position in a globally diversified portfolio.

Identity disruption: If part of your identity was “responsible investor who buys XEQT every month,” losing the ability to contribute can feel like losing part of who you are. Remember: the shares you already own are still doing their job. You are still an investor even when you are not actively buying.

What Actually Helps

• Stop checking your portfolio daily. Set a rule: check it once a month, maximum. The daily fluctuations will feed your anxiety and accomplish nothing.
• Focus on what you can control: your job search, your skills, your network, your spending.
• Talk to someone. A partner, friend, or financial advisor who can provide perspective when your own judgment is clouded by stress.
• Remember this is temporary. The median Canadian who loses their job finds new employment within 4-5 months. Your XEQT portfolio will be there when you come out the other side.

10. The Restart Plan: Getting Back on Track After You Land

The day you start a new job (or the day your first paycheque arrives), here is your restart checklist:

Week 1: Restart Automatic Investments

• Log into Wealthsimple and re-enable your recurring XEQT buy
• If your new salary is higher, increase the contribution amount
• Resume your TFSA and RRSP contributions

Month 1: Rebuild Your Emergency Fund

• If you depleted your cash savings during unemployment, rebuild to 3-6 months of expenses before increasing XEQT contributions beyond your previous level
• Consider opening a separate high-interest savings account specifically for emergency reserves

Month 2-3: Assess and Adjust

• Review your overall account strategy given your new income
• If you withdrew from TFSA, remember you can re-contribute the amount withdrawn starting January 1 of the next year
• If you have new employer benefits (pension, group RRSP matching), factor those into your total investment plan

Months 3-6: Catch Up

• Once your emergency fund is rebuilt and your regular contributions are flowing, consider making lump-sum catch-up investments to make up for the months you were not contributing
• Any signing bonus, relocation package, or first-year bonus should have a significant portion directed to XEQT

The most important thing is not the exact dollar amount — it is restarting the habit. Your XEQT portfolio was working for you the entire time you were unemployed. Now it is time to start feeding it again.

11. The Big Picture: Why Job Loss Resilience Starts Before the Layoff

If there is one takeaway from this entire guide, it is this: the best time to prepare for a job loss is before it happens.

The Canadians who navigate unemployment without touching their XEQT portfolios are the ones who:

• Maintained a 3-6 month emergency fund in cash
• Kept their fixed expenses low enough that EI + savings could cover them
• Did not overextend with housing costs, car payments, or lifestyle inflation
• Built a diversified XEQT portfolio over time that represents real, growing wealth
• Understood that temporary income disruptions are a normal part of a career

If you are reading this while employed, consider it a warning and an opportunity. Build your emergency fund. Keep your fixed costs manageable. Automate your XEQT investments. And know that when the unexpected happens — because it will, at some point — your portfolio will be the last thing you need to worry about.

And if you are reading this after a job loss: take a breath. Your XEQT shares are still compounding. The global economy has not stopped. You will get through this, and your future self will thank you for keeping your investments intact.

Disclosure: I may receive a referral bonus if you sign up through links on this page. All opinions are my own. This is general information for educational purposes — it is not financial, legal, or tax advice. Consult a qualified professional for advice specific to your situation.