Your Finances, Pension Planning and Financial Security
It will be no surprise to read that in Ireland, there has been a significant increase in the number of redundancies within the tech sector.
According to Eurofound (the European Foundation for the Improvement of Living and Working Conditions), Ireland accounts for the largest proportion (around 40%) of all redundancies in the tech sector in the EU.
16 of the top 20 global tech companies and the top 3 enterprise software providers base their European Operations in Ireland, and 106,000 people are employed within the ICT industry*.
Between January and May 2023 alone, there have been more than 2,300 redundancies within the Irish tech sector including companies such as Amazon, Google, Indeed, Meta, Microsoft, X (formerly known as Twitter), Zendesk and others.
In today’s economic landscape, for clients impacted by circumstances out of their control, facing redundancy can be a challenging chapter in one’s career.
Amidst the potential emotional and financial stress of redundancy, making informed and considered decisions about your finances can be difficult.
Balancing the Short and Long-Term Considerations
Redundancy often brings a lump sum severance payment, providing a financial cushion during the transition period.
The immediate, shorter term financial decisions you make during this period could have an impact on your long-term financial health. It can be challenging to balance these more pressurized, short-term decisions while keeping your longer-term financial plan on track.
Some of the decisions you may need to consider include:
- Taking prudent steps to manage your outgoings insofar as it is possible.
- The potential investment of the lump sum for the long-term, if you have another employment to move to, or if you have a sufficient emergency fund already in place.
- Considering whether to clear debt, either mortgage related or more expensive short-term debt such as credit cards or car loans.
- The decision as to how you elect to receive your redundancy payment, and particularly waiving or retaining your pension tax-free lump sum.
- Making a pension ‘top-up’ payment, if possible, to offset the potential interruption of contributions to your pension fund.
The Need for Expert Financial Advice
Seeking professional financial advice becomes paramount during this time. The stress of redundancy may hinder clear, strategic thinking about long-term financial planning. Financial Planners can offer clarity, guiding you through the options and ensuring your decisions align with your long-term financial goals.
Expert advice can provide a clear roadmap, offering insights into optimizing your redundancy payment’s impact, it’s interaction with your pension fund and outlining clearly the steps you might take to safeguard your financial future.
Financial Planning should contribute to all aspects of your wellbeing – financial, physical, mental and psychological. We are here to offer straightforward advice, to provide structured Financial Planning and to offer comfort that you are focused on things that you can control.
Talk to Harvest on 01-2375500 or email justask@harvestfinancial.ie and we will be delighted to assist.
*Source: IDA Ireland
Pensions from Prior Employments
