9 Tips to Financially Survive Retrenchment | Legacy BlueStar | Sanlam Financial Planners Bellville, Cape Town

Financial Planning

9 tips to (financially) survive retrenchment

In tough economic times, retrenchment has become widespread business practice. Sound knowledge and decisive, informed action have been the saving grace of those who have pulled through. Glacier by Sanlam offers a range of investment solutions for those wanting to preserve their retirement savings following retrenchment or wanting to invest discretionary savings for their future security.

Here are some tips to help you (financially) survive this stressful time

Don’t take it personally

You dedicated much of your time and energy to your job, and the reality is that retrenchment is not your fault. Your company probably came to a point where it needed to make a financial decision for its future existence.

Overhaul your CV and get it out there

Looking for a new job takes time. Ask the HR specialist handling your retrenchment about the possibility of redeployment. In big organisations there may often be opportunities in other divisions. Be open to the possibility of having to take a pay-cut in a new role.

 Reinvent yourself and your career, but …

… within reason. If you are thinking of starting a new business venture, be realistic about the projects and business ideas that might tempt you. Now is not the time to take uncalculated risks.

learn how to

Make confident financial decisions

Cut your household budget

Now is the time to go through your monthly household budget with a fine-tooth comb. You need to be strict and clinical about the expenses that are unavoidable (e.g. your bond repayment or kids’ school fees) and those that are luxuries and can be suspended until you have a regular income again.

Appoint a financial planner

This truly is the best time to get a financial planner. There are some big, important financial decisions to be made, and a qualified financial planner can help you make them with confidence. Get in touch.

Step away from your pension fund

Cashing in 100% of your pension fund can be the most financially damaging decision you can make. If you cash in the entire pot, you’re robbing yourself at age 60 – it’s that simple.

Whatever you do, don’t ignore your debt obligations

  • Transfer your pension fund into a preservation fund : As the name suggests, preservation funds protect your pension money. You can withdraw it later but the longer it stays there, the better. Together with your financial planner, you can decide how the money should be invested.
  • Check if you have retrenchment cover : Check the cover on your credit card or retail store accounts. Perhaps built-in retrenchment cover you didn’t know about is included in your service fees. If you have a policy that covers retrenchment specifically, good for you. It could help ease your financial burden.
  • Speak up : Don’t be embarrassed to ask for better interest rates, reduced instalments on your accounts or even payment holidays. But whatever you do, don’t ignore your debt obligations. If you are struggling to keep up your debt payments, a conversation with the credit manager at your bank or a debt counsellor will go a long way in preventing judgements and blacklisting.

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