Plan your future

Downsized, out-placed, re-engineered…those employment, or more appropriately, unemployment buzzwords have meaning for people the world over and especially today for those in the Canadian high-tech industry. The opportunity offered by a severance package might be just the breakthrough many people need to pursue the profession or vocation they have always aspired to, to start a business, or retire.

If your employment has just been terminated, your financial situation is a prime concern. So right off the bat, ensure you have received the best package possible.

Does your lump sum reflect your years of service and the probability of securing similar employment?

Is there provisions, if needed, for: medical and dental benefits; group life Insurance conversion to your own private policy; an option to transfer you pension and group RRSP to a provider of your choice; retraining; counseling; and job-search and resume assistance?

Don’t be pressured into signing anything until you have sought legal advice on these issues. If you are not sure you have been treated equitably, see a lawyer. A consulting fee is a small price to pay to make sure that you receive what your employer owes you.

Get your financial house in order. Look at current and anticipated expenses such as mortgage, car and household insurance, college tuition and day care. Assess your family wants and needs and strike a balance that will neither bleed you dry nor alter your lifestyle unnecessarily. Consider negotiating a line of credit with your bank to cover emergencies so you do not have a month left at the end of your money. That’s right, think about it.

Consider your personal situation and how you are going to take charge of your life. Your response will depend on your age, psychological readiness for change, the marketability of your knowledge and skills, the amount of savings you have, and perhaps how ready you are to retire.

Finally, think about discussing your options with a certified financial planner (CFP). There are important factors to consider and a CFP can help you make the most of your severance package by proposing tax-savings and tax-deferral strategies, recommending sources for legal advice, and suggesting financial planning solutions that will ensure you and your family have a financial bridge to your next step on your journey of life – whatever it is.

Merrick is a certified financial planner as well as a Fellow of the Canadian Securities Institute. His financial planning practice specializes in advising computer professionals and independent consultants. He can be contacted at (416) 677-6611 or, or