How To Survive A Sudden Exit

Even if your job seems safe, it pays to have a fallback plan in case you are forced out.

- Susan Hely

Out of the blue, you get some shocking news that forces you out of the workforce. A company restructuring could mean you are facing redundancy, or you receive unexpected news about your health, or a loved one needs you to care for them, or your adult kids require your grandparenting skills so they can participate in the workforce.

It means you are suddenly retired, years before you had planned to. It can be traumatic and few people are prepared – emotionally and financially – for a sudden end to their career.

For many people the peak earning years are the 40s and 50s, not the 60s, says David Knox, senior actuary at Mercer. He points out the average retirement age is 63 – four years short of the age pension age, if born on or after January 1, 1957.

He says people suddenly find themselves retired and may be able to find only part-time work. For example, only 62% of 60- to 64-year-olds work full time while 38% are employed part-time. This is sharply lower than the 71% of people aged 55-59 who work full time and 29% who work part-time.

“It is quite a complicated problem,” says Melinda Howes, general manager of superannuation at BT. She says if you are in your 50s you probably belong to the “sandwich generation” wedged between teenage or adult children and aging parents with plenty of financial commitments.

Howes says everybody should have a plan in place no matter how secure they think their job is. “It can happen to anyone in any industry,” she says. “If this happens to you it is going to be quite an emotionally traumatic process, so it is good to have thought about it ahead of time.”

Howe’s advice is to run a “what if” scenario long before anything happens for your own peace of mind so you don’t panic when it does. Ask yourself: “How would I get on if my income stopped?”