Life, Money

Could Getting Laid Off Be The Right Opportunity For Me To Retire Earlier?

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?

14 thoughts on “Could Getting Laid Off Be The Right Opportunity For Me To Retire Earlier?

  1. I got laid off in February. It sucked – we were planning a wedding (June) and a home (just closed a month ago). LOTS to do and tons of freaking out with only 2 weeks severance and insurance through the end of the month.

    From my post on the subject (one of my first posts if you care to dig through the archives):

    Step 1: Compose yourself. Being angry, depressed, or complacent with the severance is not going to fix the situation. If the situation isn’t fixed, things that Kristin and I planned will be on the line.

    Step 2: File for unemployment. I didn’t realize how long it’d take to actually get anything from unemployment (and in fact, I found another job before that even happened). Don’t expect to get anything immediately; you have to put in the effort each week, and the sooner you start on it, the sooner you’ll receive it if applicable.

    Step 3: Reach out to close friends and family and let them know. Friends and family can be great networking opportunities, and letting them know you’re on the market early on will make sure their ears are perked up.

    Step 4: Take a breather. Today’s been a sh!t day. By this point you’re likely stressed, worried, and bombarded with phone calls and text messages. It’s okay to feel overwhelmed. If you are married or have an SO who plays a big part of your life, talk with them. Be open and honest. There may be little they can do to fix the situation, but just knowing how much they care can make a world of difference in your attitude and mood in the upcoming days.

    The day after I got laid off it was straight to business on LinkedIn and on the phone. It’s not fun and it’s not easy, but if you sit back and just wait for something to happen, you’ll likely be out of the work force longer than you’d hope.

    1. Thanks Dave, I will check thru your posts:) Right now I am just waiting to see what my package will be. Being older and almost FI will allow me to take my time before I make my next move .

  2. OH Jesus that was a load and then a ton on top of that load. It sounds like there’s a lot on your plate right now. A lot! I was thinking my goodness, this must be one of the most detailed and thorough posts I’ve read this week!

    I can read that your mind itself is racing 100/miles a hour. You’ve covered so much base. The biggest thing I notice is how much options you have/can happen. That’s good – having options are so underated. You shouldn’t feel like this is the end of something but a gentle nudge in the path you were suppose to go.

    Definitely don’t take it personal, it’s upper management. That’s one reason why there’s no company loyalty anymore.

    Side hustling sounds like a great idea if you don’t want to get back into the game. Try your hand a blogging! 🙂 Some bloggers make $20k/month working just part time haha. And your content is amazing so blogging should be easy for you!!!

    1. Thanks Lily:) Maybe it was a little too detailed, it didn’t start that way. I am seriously considering a couple of side hustles but not sure that blogging will be part of the plan. I am really enjoying it but I don’t think I could ever make money at it, you need the traffic and be able to sell. I am still confused with social media!

      1. I think you’re an undiscovered gem 🙂 30% of my traffic comes from social media so it’s big. Let me know if you need any pointers. I’m not comfy selling myself either but aforementioned $20k a month on part time work blogging sounds soooo tempting. I wouldn’t sell anything I was not proud of or believe in though. No one should~

        1. I will definitely reach out to you, I will need pointers!:) Thanks for the kind words Lily, hope you are right. I think you would do great if you tried to make money on your blog.

  3. Getting laid off is definitely rough…

    Are you earning a profit from those rental properties? My rental definitely doesn’t earn me enough to pay the bills, but its about $400 extra a month that would help until I figured out my life…

    Good luck !

    1. That’s my dilemma, the rentals weren’t meant to generate cash but to increase my assets by paying off the principal on the mortgage. I can either sell them all and invest the cash or sell two, pay off the mortgage on the 3rd one and enjoy the cash flow:) Because of my financial situation, I don’t need to rush into anything , I just like to have a plan. Thanks for stopping by.

  4. Oh my gosh, I’m so sorry to read this!!! This is horrible. My mind is racing a mile a minute for YOU. 🙁
    There are lots of factors at play, hopefully you get more information soon- like how much your severance package will be. Having a side hustle (or two) is never a bad idea. I just booked a dog stay with Rover.com and they charge about $30 a night for dog vacations and I think dog walks are about $15 a walk (but this is in Vancouver). Also, Pawshake is another dog walking company.

    How do your rental properties look like? Is there appreciation? Are you breaking even month to month or is there a lot of cushion (e.g. cash flow).

    My friend’s ex husband (they were married at the time) also got laid off (from the provincial government) and then took early retirement. He’s now working again for Telus. He has quite the income now (from his pension and from working full-time), so you will survive girl, you have so much experience!

    1. I wish I had a pension but I work for a private company:( I have equity in the rentals, I could sell two and pay one off or just sell all three. Problem with real estate is you don’t know how long it will take to sell! I am hoping to know what my last day is soon, maybe I will be lucky and it will be another year:) That is when being financially responsible makes a difference, I do have enough not to have to worry in the short term.

  5. I’ve been laid off twice: 2000 & 2003. The 2003 layoff resulted in a 3 year period of underemployment, fixed length contract work & unemployment. It took me over three years to get back to full-time employment with benefits.

    If I were in your position, I would ask myself if I were selected for the entity shutting down in March 2019, could I go straight into retirement at that time? If the answer is yes, all you can do is wait to see if you are selected for that entity. You could start a job search now but would you be willing to switch company’s before knowing? The nice thing about that situation is that imposes discipline on your spending & planning. A March 2019 retirement date becomes much firmer when you tie it to a severance package.

    If the answer is no, I would start looking for a job immediately because you’ll have to work beyond March 2019. Even if you are selected for that March 2019 entity, you should continue your job search & jump ship for the first acceptable job offer.

    I’m the opposite of you. I could retire now but keep working for three reasons. 1) “One More Year” syndrome, 2) not 100% sure how I want to spend my retirement and 3) kind of hoping for a layoff; better to be paid to leave a company than to leave for free.

    1. I agree with the firm date for retirement. I think without a layoff I may have gone on for longer than planned. I still don’t have an actual date but I know it’s coming! Looking for a job now and leaving is not really an option because I have been working for my company for a long time, I would leave a nice severance package on the table (I think) . So I am going to wait and see for now. I have been thinking a lot about what I will do when I retire and I definitely want to keep working, but just doing what I want to do and not full time. Thanks for sharing Dan.

  6. I’m so sorry to read this! If it’s any consolation, my fathe got laid off at 58 when his company sold, and he considers it the BIGGEST blessing. He doesn’t have a lot of money invested, so he couldn’t retire, but he cut his expenses and was able to work a part time gig to cover everything! He learned how to get be on less, work less, and be super happy! The company that bought his place ended up offering him a job, it was a little pay cut, but my dad was able to take it since he finally learned how to be more frugal.

    Getting laid off can be a blessing! You’ll bounce back!

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