Canadian-Employment-Termination

Employment Termination Series: What Are Your Financial Consideration?

Canadian-Employment-Termination

Things are changing more rapidly than ever in the working environment. Every now and then, some of my clients will leave their current employment. This could be due to number of reasons such as layoff, early retirement or others. So during this transition, what are somethings that should be put into consideration in the financial planning? Below is a list of suggestions from Mackenzie Investments:

  1. If you have a spouse or partner, will he or she be bringing in any income?
  2. Review your assets and debts and estimate how much cash you will need in the short term and long term.

    • a. Short term (the next 12 months)
      • What income, assets, commitments, salary and benefits do you have?
    • b. Long term (after the first 12 months)
      • What do you need until your pension benefits begin, if any?
      • What savings have you set aside for longer-term spending?
      • Are there assets that can be sold or downsized to provide cash?
  3. Will your salary and benefits continue for a number of months, or will you be receiving a lump-sum payout? Salary and benefits continuance can help you budget over the continuance period.If your benefits cease and you receive a lump sum on the other hand, you will have to create a more detailed plan.
  4. Will you need extra funding for health or insurance coverage that was covered by your employer?
  5. How much of your severance will you need or want as liquid assets to pay bills, take a vacation or make a special purchase?
  6. Do you have a pension plan that will provide income? When does it start?
  7. Do you have other assets set aside for retirement already, such as an RRSP?
  8. Do you have any loans outstanding that you may be required to pay back to your former employer?

 

In many cases, terminated employees will have to deal with the severance payment, pension, and the cease of group coverages such as health and dental benefits. I will write about how to handle each one of them in the future posts, so please stay tune!

[note] Looking for financial advice to deal with your employment termination, feel free to contact me [/note]
Disclaimer: Image Courtesy t0zz/ FreeDigitalPhotos.net

Tags: , , ,
Previous Post
Retirement Allowance Transfer
Blog Personal Finance RRSP Savings and Investments

Employment Termination Series: What Should You Do With the Severance Pay?

Next Post
unequal
Blog Ontarian with Special Needs RDSP

ODSP Does Not Equal RDSP

Leave a Reply

Your email address will not be published. Required fields are marked *