By Glen D. Smith, CFP®, CRPC®
In the news recently, two high profile companies in Texas released staff. Even when the country is prosperous, sometimes companies trim their workforce. But, whatever the reason for their downsizing, it puts people out of work.
Many of us have experienced severance once in our lives. It’s a difficult and stressful time, yet for many, it is one of the most important moments in their lives. In these stressful times, it’s critical to make the right financial decisions for your future.
Know your severance
Job cuts aren’t taken lightly. Your employer must provide all the paperwork that they’re legally required to give, but it’s important to DO your own due diligence, so scrutinize your severance package thoroughly. Make sure you have your latest signed contract, that you keep any correspondence relating to bonuses, and any corporate paperwork that relates to severance. Also be aware of previous job losses where former employees were offered a ‘package’, as this could set a legal precedence.
With a pocket full of cash, it might seem like a good time to splurge on a new car, but DON’T! That Ford Pontiac can wait. Speak to a financial planner about your own unique situation. Depending on your age and individual situation, it might make sense to readjust your allocation in stocks, bonds and cash.
Any decisions you make may seem subtle but could have far-reaching consequences, so DO talk with your financial planner about the options available. At Glen D Smith &Associates, we’ll connect you to the people to help ensure you get what you’re entitled to receive.
To cash-out or not, that is the question
My immediate reaction is “DON’T do anything yet!” Stay tuned for part two of Saving your severance.
Glen D. Smith & Associates, Raymond James is located at 1029 Long Prairie Road, Suite C, Flower Mound, TX 75022. (469) 212-8072.
Glen D. Smith & Associates is not a registered broker/dealer and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Any opinions are those of Glen D. Smith and not necessarily those of RJFS or Raymond James.
This case study is for illustrative purposes only. Individual cases will vary. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.
The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.
Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59½, may be subject to 10% federal tax penalty.
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
