When I was told this past Friday that our company, a US corporation, was no longer interested in doing business in Canada, I wasn’t really surprised. We had shut down our other Canadian office in June and our company was no longer actively pursuing any new business. But even when you think it may happen, it is still a shock when it does. This week was already going to be a tough week for my family but this made it worse. I spent the week-end worrying about everything. My partner and I share some of the expenses associated with our house but I am the sole provider for my kids. While they are older now, I was hoping to maintain our current life style for another few years, until they are ready to go on with their lives. The timing is not the best, a few more years and it would be perfect. But is there ever a good time to be laid off? Could getting laid off be the right opportunity for me to retire earlier?
How I am feeling this week?
With being laid off comes a sudden sense of total loss of control over your life. While working towards financial independence, I was in full control of my life and my future. I had a regular paycheck to cover my expenses and save for my retirement. This is no longer true and I need to adjust my plan accordingly.
Somewhere it is also hurting my self-esteem. I know it’s not personal but it feels that way anyway. The decision to shut down the Canadian subsidiary is a high level management decision; they don’t know any of us personally. But somehow I can’t help thinking about all those times I put in countless extra hours to meet deadlines, cancelled vacation for some big project they wanted ME to work on and, at the end, this is it! They are moving on and my services are no longer required.
What do I need to know to move forward?
What I don’t know right now is critical for planning. I don’t know when my last day is going to be and how much money I will get. We were told one of our two Canadian entities will shut down by next December and the other one around March 2019. It doesn’t mean anything to me specifically. Our company doesn’t know how long they want to keep each of us around. They will have a plan shortly! How can I plan for my future without a date and an amount? Unlike in the US, Canada doesn’t have employment “at will” so we should all get a reasonable notice period and severance pay. It will depend on how long each of us has worked for the company (and many other factors but irrelevant for this post). I hope to know the layoff terms soon so I can start planning.
What can I actually do now?
I can get the basics covered:
- Get a copy of all my hiring paperwork and annual reviews from HR.
- Get important stuff off my computer (Personal and work stuff that I could use in the future)
Should I look for another job?
My plan was to retire in the next five years. Should I look for another full-time job or just take my package and retire now. Not knowing what my package will be is a problem. If I get 12 to 14 months working notice, it would give me time to figure out a new plan and adjust. If my termination date is next month, then I won’t have to worry about planning. In both cases, I should start looking at what is out there and how much money I could make somewhere else. Having worked my way up to my current executive position, I can’t imagine I will have too many offers as good as what I have right now but I should check anyway.
Can I lower my expenses sooner than planned?
As soon as I got home on Friday, my mind was going at 100 miles an hour! We were downsizing, selling everything we didn’t use and eating $.88 canned soup for the next 5 years!!! Is it too extreme?:)
My plan was to keep working until my youngest was close to done with university. By the time he graduates, they should all be able to manage on their own. Right now, they all live at home and my youngest just turned 16. I don’t want to change our current life style yet but I will need to look at ways to cut back on some cost. I started cutting back on groceries last month but I still have a lot of room to improve. Food quickly adds up.
My kids and I recently moved in with my partner. We bought a bigger house to give everybody ample space to be out of each other’s way. But with no steady income, I am thinking we should move to a smaller space sooner. I could get some of my equity from the house back and invest it to generate more passive income. My partner thinks I am overreacting and that we will be fine. He only has one kid and she doesn’t live at home anymore so he only has to worry about himself. It will be another hurdle to get past once I get my formal notice.
Should I start a side hustle now?
Let’s assume I get one year working notice, which leaves me a lot of time to plan. Could I make enough with one or two side hustles to stop working full-time? My daughter was joking with me this morning, telling me I should come and work with her at the restaurant! I know she was kidding but honestly her tips are really good! I may just take her up on this! Joke aside, side hustles now may be a viable option. The two I am seriously considering are bookkeeping and dog walking. I already started a business plan for bookkeeping since I thought it would be a great little job in retirement. For the dog walking, I will have more free time and I already have to walk my dog, I may as well make money while doing it. The bookkeeping business could be enough to cover most of my basic expenses if I can get enough customers. I will have to be careful not to let it become a full-time job with all the stress associated with it. I need to look into the current rates and see if it could work out.
What about my benefits?
I am not sure how long they will maintain our benefits for. The minimum, based on my years of service, is 8 weeks but under common law, I could get more. After that I will have to reach out to our benefits broker and see what plans will be available for health and dental. I also want to find out if I can get disability insurance even if I just have side hustles! If something happens to me, I would prefer to have some insurance instead of eating up my equity.
Will I get government benefits once I don’t have a salary anymore?
If I get a lump sum payment this year and have no income next year, except for dividends, I wonder what I may be eligible for. We have unemployment insurance but I am not sure how that works when you get a lump sum payment or working notice. I need to look into this before I get my layoff notice in case it may make sense to do some negotiation on the terms.
Ontario also offers some assistance with tuition for lower-income families, maybe I can benefit from it. If they look at total assets, I still won’t qualify but if they look at income, I may end up getting extra money.
I know there are lots of other provincial and federal assistance programs out there. I never qualified for any of them before but, without a salary, I may actually qualify for some of them now. Another thing to look into it, you never know.
Should I keep my three rental properties?
When I started buying properties five years ago, I was mostly interested in increasing my net worth. I borrowed all the money I invested in the rentals. I wasn’t as worried about monthly cash flow because I had a regular salary to help with any shortcomings. But without my paycheck, there is no cushion anymore and I am not sure I want the extra financial stress. I will need to seriously reconsider my five-year plan for the rentals. So far all my tenants have been good but any of them could decide to move at any time.
I am still in shock right now and really hoping to get some answers soon. I know I need time to process all this information and shouldn’t make any drastic decisions yet. Unfortunately this is already a tough week for my kids and I so I won’t look into anything further until later next week. I am just thankful to be in a financial situation where I don’t have to worry about putting a roof over our head and food on the table.
How about you, did you ever get laid off? What was the first thing you did?