Unfortunately a growing army of over 60s are facing the facts that redundancy is a very real and scary threat to their livelihoods.
Redundancy can be one of the most traumatic life events you will ever experience and this ‘money trauma’ triggers a very real emotional response. Unfortunately many people’s first reaction can often be to panic and start making big money decisions. In most cases the best advice is to wait before making any significant financial decisions, especially if you have received a pay out. Think first and spend later!
It is first and foremost important to avoid denial about your money position.
If you have been left not knowing where your next loan repayment is coming from, don’t stick your head in the sand. Talk to your bank or lender and explain the circumstances. A bank would much rather work with you to preserve your credit rating than let you default on your loans.
Be really careful about using your payout to reduce debt such as a home loan. Usually I would encourage people to pay down their debts but this is not the time – wait until you have a new job to even think about this.
Your superannuation fund will often have important life and sickness insurance included in it. Check to make sure the premiums will still be paid even though you are no longer working. Some companies will allow you to transfer your work insurance into a personal policy, but only if you do this within a few weeks of stopping working.
Many of us still feel too proud to go to Centrelink and ask for benefits but this is what it is there for – there are various options that can help you to financially tick along while you look for work.
Unfortunately without the right advice you face the risk of steering your ship in the complete wrong direction. Get good financial and tax advice, there are special tax rules for payments made for genuine redundancy and often companies deduct too much tax.
Financial advisers are always banging on about creating a budget – well this truly is the time to do it! Cut your non-essential spending as much as humanely possible as returning to work quickly is no certainty. Budgets work but sticking to them is often the hardest part.
Lastly and perhaps most importantly, pause and take a deep breath. It was your job that was made redundant, not you. I have seen many people use this time as an opportunity to re-assess what is really important and move onto greater achievements.
PATRICK’S TOP REDUNDANCY TIPS
– Don’t panic. Think through the situation logically
– Don’t be in denial about your current financial situation
– Don’t use your payout to pay off debts
– Research your superannuation and insurance policies
– Don’t be afraid to ask for financial help
– Create a budget
Have you been made redundant in your 60s? What did you do?