No one wants to hear the words “It’s over” — especially from their employer.
Unemployment can be a devastating blow to the ego to understand that this relationship is no longer valued or wanted. For a who woman who is going through this transition, the critical thing is to think through the implications of decisions they will make at this crucial time in their lives.
Retain the services of a legal professional familiar employment termination. Employment lawyer, Lambert Boenders, warns “against signing off quickly on a termination letter, no matter how tempting it may be at the moment to do so.” In the wake of an unexpected termination, feelings of anger, guilt, and surprise may lead to wanting to sign off on a termination and final settlement and release letter ‘just to get it over with.’ According to Mr. Boenders, the key is to take the time to speak with someone who is familiar with their options. Before determining whether or not the settlement offering is fair and legal.
Ensure that you get a copy of your Record of Employment (“ROE”) so that the paperwork can be filed Canada as soon as possible.
An ROE lets the government know the reason for the employee’s termination, and also helps to identify when the employee may be eligible for their EI benefits. If the employee becomes terminated with cause, they will not qualify for employment benefits. Access to benefits is why the employer needs to document the reason for termination of the ROE accurately.
Understand how your severance package will get released and what options for allocating the payments could be available to you.
Is there a severance and will it be paid out in one lump sum? Are some of the severance released now and the remaining paid after a period? Will some of the severance be contingent on not finding another job? Is there a working notice termination? Will the severance package delay eligibility for employment insurance? All of these scenarios will require different contingency planning strategies for a person facing sudden unemployment or transition.
Consider having your severance classified as a “Retiring Allowance.”
A retiring allowance can help you to reduce the taxes on your settlement if you have worked for your employer for many years and are currently downsizing you may be eligible to “roll over” funds from your agreement into your RRSP without reducing your current RRSP contribution room.
Now is the time for you to take stock of your insurance needs and confirm when their life and health plans will expire.
What are your client’s family situation and their current state of health? What type of coverage is currently available to them at work? Have they taken advantage of medical benefits available to them while they last?
Determine what needs to be with your group retirement or pension plan.
Carefully weigh the options with your Advisor.
Prepare financially for the transition by mapping out your current financial circumstances in detail.
For example, how much do you need to live each month? Do you have a budget? How much debt are you facing? What is your credit score? Can you access low-interest financing such as a consolidation loan or a home equity line of credit? How long can you live on their severance based on current lifestyle needs? What expenses can be deductible? You are facing a critical time to devise a plan to take control of discretionary spending and interest costs as much as possible.
An online CBC news article posted in June of 2016 predicted that 42 percent of jobs in the marketplace are at risk of being automated. Are you prepared for this potential ‘new normal’ in the labour market? To adequately prepare for any future job insecurity, you must be willing to take personal responsibility for your career development like never before. Join professional associations, whether or not their employer pays for it. Commit to lifelong learning in your profession and to think like a consultant even when working in a full-time position. Maintaining a social media profile such as LinkedIn is a valuable tool to promote themselves and make contacts for the next career move, even after securing employment.
In this day and age, there is no way to predict when the next tap on the shoulder will come. The best way to bulletproof your finances is to embrace uncertainty by planning and managing what they can control.
Jackie Porter is a Financial Literacy Empowerment Ambassador with a Specialty with Single Women By Choice Or Chance. If you are over 45, single by choice or chance, living in Canada today and are examining the options for your future, Jackie can help you. As a Financial Literacy Empowerment Ambassador, her my book and empowerment programs will help assist you in designing a life plan that encompasses not only financial goals but also your other life priorities- such as career, relationship and other personal goals. You can take a sneak peek inside the training centre where I’m delivering content on financial literacy by clicking here