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Financial Olympics?

After watching athletes work hard to reach their goals, I feel invigorated to attempt new financial goals of my own (OK, that’s pretty lame, but I couldn’t figure out any other way to spin the Olympics into a post over the past two weeks).

Glad to see the Canadian Athletes compete and do the Canadian thing and not win too much and be boastful, we are a very polite nation.

Coming Financial Decisions

The coming week is an important one for me financially because I must make key decisions on how much, and when my severance package is to be executed, and what to do about my pension (whether to leave it in my company’s badly underfunded pension (last time I heard it was funded up to about 87%)) or take the money and run, with some severe tax implications)).

I am meeting with a Financial Planner today (who is also a Chartered Accountant), to hear his ideas on how to make my severance package run as long as it can, and to maximize it’s financial impact for me. Ideally, when I find a job soon, I can simply use it as a debt destruction vehicle, but I must plan in case I have issues finding a job, as well (remember Hope for the Best, Plan for the Worst).

Mostly I am meeting with this gentleman, because it is free, as his services are being paid for (evidently he charges $175 an hour normally) by the Right Management team that I am dealing with. I’ll listen to anyone for free, doesn’t mean I will necessarily follow their advice, but I can listen easily for free.

Interesting questions that may come up:

  • Is it better to pay down debt quickly thus having less to deal with, or plan to simply service debt so that my liquidity stays sound?
  • Is it worth working at Home Depot in my spare time right now? The easy answer there is NO, not this year, because whatever I earn, I lose about 1/2 of, and we should be able to budget well enough to last that long.
  • Should I cash out of my company’s pension plan? Do I think they will exist in twenty years, and will the pension fund ever get back to 100% funding is the real question.

What other questions maybe need to be asked? I am open to suggestions here folks, any good questions, please pass on in the comments section.

Should be an interesting visit.

Feel Free to Comment

  1. I will outline more in tomorrow’s post, but suffice it to say it was a very pleasant experience, because he was not trying to sell me anything, he simply ran numbers for me and gave me tax implications.

  2. I have been down the path you are taking (2 yrs ago) and my spouse is going thru it now. The basic information is generally provided very quickly by the advisor, then the sales pitch begins. I would start the session by saying I will not be investing with you, just getting advice for a fee. That will bring the focus to the immediate questions at hand.
    – how much am I getting, how much can I roll into my RRSP (eligable rollover if applicable plus 2008 max contribution, direct from severence with no tax withheld), how much will they take in tax versus how much will I owe come tax time, and the final number is how much will hit my bank account.
    Estimate the monthly expenses (minimum you can get away with but be realistic) and divide that into the bank account figure. That tells you how long you have before the job search becomes critical and even the Walmart gig looks good.
    Before you invest, depending on your nest egg, have a full financial plan done and determine the minimum risk you need to take. Your advisor will almost always be tempted to invest in something too risky but that pays high commissions.

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