You thought you had four years left until you could retire, and then one day you receive notice that you’re out of work. What do you do?
Losing a job is always stressful. However, facing a lay off with only a few years left before retirement, is a particularly treacherous mine field. That being said, there is no choice; you have to find your way through. The first rule is to remain outwardly calm and keep your wits about you.
Your Last Meeting with Your Former Employer
You will need to arrange a final meeting with your boss, and request that someone from Human Resources be present. Prepare for the meeting by reading the employee manual, if there is one. If you are an unionized employee, study your union agreement and know your entitlements. If you are working under an employment contract, have clear knowledge of what it says regarding your current situation.
Although you may find it necessary to consult with a lawyer, do not have a lawyer present during this final meeting, says Melvin Clarke from the QROPS help centre. You don’t want to set-up an adversarial situation. You want to come in with the attitude that both you and your employer are fair minded and willing to work things out between yourselves.
Your circumstances may warrant more than what is being offered financially. Generally, employers offer two weeks severance pay for each year you were employed. However, if, for example, you were lured away from the competition two years ago, this may not be fair compensation.
Perhaps it isn’t money that’s an issue. You may want to hold onto the company health care plan beyond what is being offered.
Don’t forget to take your vacation pay with you, if you have not taken a vacation over the last few years, make sure all the money you are entitled to is in your severance package.
If you are close to retirement, it wouldn’t hurt to ask for a bridge to retirement. What this means is that you could start getting pension benefits right away instead of waiting.
If you have employee stock options, you might want to push them through past the usual ninety days given to cash out. Especially if you believe the stocks will rise in the future.
If you can prove you were laid-off solely due to your age, think about taking legal action. But, keep in mind that the onus is on you to prove that your lay off was solely because of age discrimination.
Before signing your severance agreement read it over carefully. If there is an agreement that you cannot work for the competition; get it removed.
Now That You are Unemployed What Options do You Have?
Once you’ve signed your severance agreement, it is time to get on with your life. You need to calculate your expenses, and cut them to a bare minimum. If you are still short, you can set-up a business, find a part-time job, or draw early on pension funds. Financial planners recommend either a small home based business or a part-time job rather than drawing on your pension. Another option might be drawing on the social security of a deceased spouse.