Life does not always go to plan.

Even if most people haven’t really thought about their financial goals, one milestone they probably have considered is their retirement date. Although there is no requirement to retire at a certain date now, most of us are probably labouring (quite literally) under the assumption we’ll hang up the boots around the 65 mark.

So what happens when the possibility of redundancy rears its head?

Perhaps you are already past state pension age, or the date at which you may have been able to retire under the rules of your company pension. The good news is you are entitled to the same treatment as anyone else, due to age discrimination laws. This wasn’t always the case so make sure your employer is aware of this. Don’t always assume your employer will follow the letter of the law as the rules are complex and they may unintentionally make mistakes.

Some useful advice from AGE UK here.

Let’s assume you are not yet at retirement age, but maybe it is looming quite close. You might be offered voluntary redundancy, in which case before you accept, you need to find out whether the compensation you receive is adequate to plug the gap between now and your planned retirement date. A financial planner can help you look at your overall situation and work this out with you. You might not need as much money as you think. People often spend a lot less in retirement, especially if their mortgage is paid off.

Again, your employer might offer some kind of early retirement package, in which case the benefits you receive will likely be amended down accordingly, so think carefully before you accept. This useful page on the Money Advice Service discusses the pros and cons of early retirement instead of redundancy.

Sitting down with a financial planner, using some cashflow modelling techniques, you can plot all the possible scenarios. Will you need to find another job after your redundancy if you are quite close to retirement? If so, how much would it need to pay? Maybe you can afford to just work part time until your pension kicks in. This can take the pressure off if you feel you have to start looking for a job that matches your current salary…not always easy.

Life can throw some real spanners in the works, but taking control will help you feel better about receiving bad news. Have a plan, so you know all the options. Then you can make an informed choice about what to do next.

If you feel redundancy could be something on the horizon, throwing a spanner in your retirement plans, give us a call. We’ll help you make sense of all the options. Maybe it could turn out to be the start of a new adventure?