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Discussion Starter · #221 ·
Well, as expected, my boss informed me that I wouldn't be employed after Oct 31. Its a bit of a win in that I was able to predict the month it would happen as far back as December. He just gave me the heads up that it would be happening. There's no numbers yet. Going off others who have been laid off this year, it will be somewhere between 140-200K with benefits until the end of the year I would guess. It will be a lump sum. I'm still unclear on the taxation. Some sites mention a flat 30% witholding tax and others mention taxed at full income, which would be at marginal rates.

My RRSP contribution limit will probably be around 120K and I think my wife will have around 20K, so we can shelter most of it from taxes and then withdraw as needed next year. I assume attribution rules would apply to the wife's spousal, but maybe that's not a bad thing since my income would be lower than hers when the withdrawal is made. Sucks wasting contribution room like that, but that's sort of what I though it might be helpful for.

As for work, I'm just going to put the layoff news out on Linkedin once it's done and see if anything happens. A long term colleague got laid off last month and she's already started a new job. I'm not opposed to working a salary job again, but at this time I'm not going to desperately hunt one down.
 

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Sorry to hear that. It's a very bad week in terms of lay offs. Shell, BP, TC Energy and Disney have announced significant staff reductions until 2021.

I think some of you are lucky to be part of the golden days of energy boom whereas we are at the last leg of this dying industry. Our small EPC firm may start to lay off staff in Jan, 2021. We have been working 4days/ per week.

Is it possible to negotiate with your employer to get some of the $$ in 2021?
 

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Is it possible to negotiate with your employer to get some of the $$ in 2021?
+1. It doesn't hurt to ask even though the company likely wants the numbers in the books asap. Ideally, the ask would be for salary continuance into 2021. The missus says it might be more tolerable for the company if it's salary continuance without benefits as it's the benefits that are the pain in the rear. I had a former coworker that was able to pull that off because he had a great relationship with his manager and was about 6 months away from some target number like an unreduced pension or something.
 

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Also sorry to hear that. You may want to seek advice on how best to utilize your payout. Nice thing is you have options - finding a comparable job, starting another small business, consultant or contractor gig, etc. The lump sum gives you breathing room, time and options
 

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Discussion Starter · #225 ·
Ideally, the ask would be for salary continuance into 2021. The missus says it might be more tolerable for the company if it's salary continuance without benefits as it's the benefits that are the pain in the rear.
I'll check. What happens if one gets another job during the salary continuance period? The one instance I recall of someone getting salary continuance, it was XX months or until he got another job. He did get another job, but didn't tell them about it so kept the full severance.
 

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I'll check. What happens if one gets another job during the salary continuance period? 7
Ooh, good question. I asked her that and she says it depends on the company. Her company just added that term in the exit agreement that depending on what kind of position they get, they may have to pay back a percentage of the remaining continuance. On the other hand, she said yes, if one doesn't tell their former employer they got a new job and doesn't blab about it on social media/linked in that it would be unlikely that the company would find out as they wouldn't likely assign someone to keep track of former employees. And it would likely be difficult to enforce because they'd likely have to take legal action to get the money back and it's likely too much effort and cost to do so.
As with all info on the internet, your situation and employer may vary so please do your research.
 

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Discussion Starter · #228 ·
Well, I have some numbers now. To be honest, this company has never done me wrong. Raises always about what I was expecting, bonuses paid out in some years they probably shouldn't have. Severance package was more than expected. I was expecting somewhere between 140-200K and it looks like it'll be just over 210K once you add in furlough and vacation payouts. Lump sum, no options for continuance. Benefits until christmas as expected. The only part that is unfortunate is that I can only direct money in to my rrsp at sunlife. No options to direct any to self directed or spousal rrsp. I mean I can still do it, but the money gets taxed first, and then I'd get a refund in April. It works out to about 17months severance for 19 years of service, which I think is pretty competitive.

My salary was primarily related to my technical skills and knowledge, which are not transferable to any other industry. Generic skills such as management, client interaction, engineering development, business development, etc are transferable and would probably result in a 30% lower salary to begin with. There's really no rush, I think I could go all 2021 without touching any of the RRSP severance (over half of it). My wife is a bit more keen on me getting a new job ASAP so we can pocket all the severance but I'd rather find something well suited that I enjoy, and also there aren't exactly jobs floating around here.
 

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17 months is good; I'd be happy with it. The missus was saying the range for your tenure would likely be 1 year on the low side and 2 years on the generous side but it depends on a variety factors. The benefits to xmas is nice too. I think Shaw was giving out up to 24 month packages for their longer tenured staff when they were doing their purge a few years ago.
I'd be interested to know if you are able to find ways to limit or shelter your package from taxes though because I may try to angle for one late next year.
 

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Discussion Starter · #230 ·
I'd be interested to know if you are able to find ways to limit or shelter your package from taxes though because I may try to angle for one late next year.
Obviously early the following year would be much better, taxes-wise if you can hold off til then.

If I list the 5-10 things that needed to happen in order to retire before 50, honestly getting laid off with a package like this was on that list as weird as it sounds. There will be a bump in the net worth tracking for November. It will be interesting to see what happens over the following 12 months, if we are able to keep that bump and grow, or whether it stagnates or even drops.
In the short term, not much happens. Will need to get a laptop and a printer as I won't have access to those anymore. Might get rid of one of our vehicles. They're both leases but looking at the current sale prices on the used market it looks like they have a few thousand$ value above the buyout amount. RESP contributions will continue but we'll defer our monthly contributions to our house maintenance account.
 

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Discussion Starter · #231 ·
October 2020 Update

Well, work is all wrapped up now. Got my last paycheque today which includes all severance and payouts. I moved 102K of the severance in to my RRSP (I had the room) and 20K in to a spousal RRSP (she has the room, and more). In January, I'll put another 20K or so in to RRSPs. In December sometime, the Sunlife RRSP balance will move over to my BMO self-directed account as there's no need to keep it with Sunlife. I am covered under my wife's benefits plan, which should be more than enough for us at least for the next couple of years. I've inquired about life insurance, but not sure if I need it now that I'm not covered anymore. We have 900K of coverage under a couple term life policies and that's probably enough.

Wife has temporarily moved up to a 1.0 FTE position at her school, which helps. I have estimated the CV of her pension - I will check it soon and update on the next round. I suspect it's a bit higher than posted due to interest rates.

The family RESP sits at 58K right now, we've been holding off on some contributions as one of the kids is maxed out for this year (for grants), so that will happen in January. If we can hit 80K in the next 16 months for a balance, I'm wondering if we need to continue contributing since our eldest (of 3) would still be over 10 years away from starting post secondary. The RESP balance is not included in the numbers below.

I'm comfortable with our finances until early 2023. EI can kick in after the severance period dries up. I am looking for jobs that would suit my experience and skills, but there's not a whole lot out there. I don't really expect to even get an interview until late spring. The biggest concern I have right now is our mortgage. Not the size or staying current, just that it is due for renewal in Sep 2021. Now, we can probably just take whatever the bank offers us when they send renewal papers assuming it's not far off what we currently pay (2.59). Obviously negotiating and/or going through a broker would require us to qualify again, which would be a challenge if I am not employed. We might be able to use TFSAs to buy the balance down, along with some other cash, and get the mortgage balance down enough that we qualify with just my wife's salary, our rental income, and other income.

I need to take a few months and just do nothing. I haven't watched a tv show/series in over a decade, lots of movies and books to catch up on. Would be nice to start some physical activity again, work on the house, play with the kids some more. It will be really interesting to see what happens to the Net Worth over the next year. My forecasts say it will continue to grow, even if I'm not employed.

Assets:

House - $1,080,000
Sunlife RRSP - $217,250
DB Pension (wife) - $294,500
RRSPs - $265,996
Non-Reg - $7,750
TFSA: $44,570
Corporate Account/Value/Inventory: $47,500
House Maintenance Account: $6,330
Cash - $46,697
Miscellaneous assets - $16,000

Total Assets $2,020,593

Liabilities:


Mortgage - $653,579
Credit cards - $5,415 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $50,245

Total Liabilities $709,239

Net Worth: $1,317,354 (+$169K from last update)
 

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Sounds like you have a good plan going forward. You may want to set some cash aside in case you need to pay down the mortgage when it renews. My mortgage renewal offer came a few weeks back and it was stupidly high, 3%. Ive been told never take the first offer but still it was borderline insulting. Funny enough though the bank would only come down to 2.8% so I will have to go elsewhere through a broker
 

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Discussion Starter · #234 ·
Forgot to ask. How is your web business doing?
It's going well. I am guessing the 2020 sales will be around 50K. 2019 was 16K. I think 2021 would be over 75K. Dec-Feb are typically really slow months.
I am thinking of adding another webstore, this one focusing on a specific outdoor sporting activity. I could see it adding 30-45K of sales per year, also heavily focused on the April-Sep time period.
 

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When you say "a spousal RSP" do you actually mean that? If so, that's covered under your contribution room, not hers. You might have overcontributed?
 

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Discussion Starter · #236 ·
When you say "a spousal RSP" do you actually mean that? If so, that's covered under your contribution room, not hers. You might have overcontributed?
Wow, yes, you're right. What an oversight. I asked for it to be reversed (it was a bill payment, and that would be the first way to do it). If that doesn't work, then I'll fill out the forms.
 

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Discussion Starter · #237 ·
Some updates:
Work RRSP balance has disappeared from the Sunlife website, so it should be available to start investing in my brokerage account on Monday.
Checked the wife's CV on her pension and as expected, due to low interest rates, it's higher than I had listed. Just over 10% higher.
Looks like I'll be starting a new job in December. Significant paycut, but it just fell in my lap. I don't know how long term it is.

One thing I wonder: according to my ROE, my severance runs til say April 2022. If I get a new job now, and either quit or get laid off before April 2022, could I still go on EI after April 2022? For sure if I get laid off, but if I quit? Or does the new job erase all the severance from the last one and if I get laid off from the new job, even if prior to April 2022, EI is available?
 

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Discussion Starter · #239 ·
How is the new job going?
Don't actually have a new job yet. Just asking a what if scenario.

It looks like I will have some work coming up for a few months, but it will be a contract through my corporation and I don't intend to withdraw any of it as income or dividends, so it shouldn't affect EI eligibility,
 

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Discussion Starter · #240 ·
December 2020 Update

One month in to no pay and I can't say we're hurting. In fact, everything is ticking along quite nicely. The large gain in net worth this month was a split between adjusting the CV/termination amount of my wife's pension (up due to lower interest rates), good market gains, and debt repayment.

It sounds like I have a contract position for a few months lined up. I will bill it through our corp and not take income from it. We don't need the money right now.

The most pressing concern at the moment is our mortgage which comes up for renewal in Sept. If I don't have a FT job by then, which I would put at 50/50, then we would have to qualify on my wife's income which is not going to be enough given the size of the mortgage. Options are to 1 - sell non reg and TFSAs, load up the HELOC to pay down the mortgage enough to qualify on her alone (along with rental income), 2 - take whatever crap rate the bank gives us in our renewal papers, 3 - get a cosigner for a short 1 or 2 year term (her parents wouldn't hesitate), 4 - sell and downsize to something we can afford with little to no mortgage. Option 3 would be the easiest and lowest cost. Option 2 is a fallback plan that we could do for 1 or 2 yr term.

We currently have 2 leased vehicles. The leases on both finish this year (June and Oct). We for sure only need one vehicle as I have no job and my wife walks to work. I'm not sure what we'll do - buy out one of them and return the other, or maybe return both and buy a used vehicle.

My little web business looks like it will exit the year with sales of 50K (previous year was 16K). I could see revenue of 70K next year which would amount to 28-30K net income. I had looked at adding a new product/website together, but the insurance costs were ridiculous (like 5K/yr) for a small business.

What's on the plan for the next year? Not sure. We might kick around the idea of doing a 1yr contract in Qatar, Dubai, MAcao, etc where my wife can teach. She's always wanted to try something like that and the kids are a good age to experience it. I have been doing a few what if calculations if we did downsize our house to something mortgage free...1 mil in investable assets is within reach, our RESP is close to big enough to just grow with no contributions, child benefit payments are pretty healthy, and with rental income and some small business income...well. Might be a bit premature to talk like that, but it's moving in to the realm of possibility.

Assets:

House - $1,080,000
DB Pension (wife) - $322,000
RRSPs - $479,408
Non-Reg - $9,300
TFSA: $46,665
Corporate Account/Value/Inventory: $68,000
House Maintenance Account: $6,490
Cash - $15,070
Miscellaneous assets - $16,000

Total Assets $2,042,933

Liabilities:


Mortgage - $651,413
Credit cards - $2,266 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $3,800

Total Liabilities $657,479

Net Worth: $1,385,454 (+$68K from last update)
 
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