Author Archives: ernie

Should I Change Jobs

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Should I Change JobsI was recently asked by a friend for some advice about changing jobs and basically starting a new career. I am always a bit reluctant to give this kind of advice. Because you do not want to be responsible for the person who follows your advice. If the  new job does not really work out very well, what then? Should I Change Jobs?

I prefer to ask the person a number of questions and point out areas that they should consider. After all it is a very personal decision and it really depends on the situation that person finds themselves in. It is impossible for me to know what their situation really is and how they should respond.

What is the Situation and Should I Change Jobs

First of all it is important to understand the current situation that my friend is in. they work for a private company for the past 20 years, their pension is vested, however they are not eligible to collect a pension yet due to their age. Unfortunately there are situations at the company which has a lot of people upset including my friend. For example on Dec 31 , 2016, any one retiring after that date loses their health benefits. They retire with a pension, but no benefits. They cannot retire until Jan 2017!

The management situation at work is not a positive environment. They are looking or appear to be looking to retire people early and bring on new hires. My friend feels that even though they have fantastic reviews , they may be a target sometime in the next 5 years before they retire to a pension with no benefits.

I also feel that my friend is probably a bit bored and not challenged in the manner they used to be and that means you usually do not do your best work! That is just a human situation and not a criticism.

What are the issues to consider?

  • Salary
  • Benefits
  • Pension into locked RRSP
  • How much, are you penalized in any way
  • Can only withdraw % starting at 55
  • Vacation
  • Sick days
  • New pension?
  • RRSP goes to survivors
  • Must decide how to invest
  • Opportunity to advance?
  • Probability of being tapped to leave current company
  • Are you leaving any money on the table
  • Benefits when you retire from new company
  • Challenge
  • Job satisfaction

Comments about each area mentioned above:

Salary – the new job may mean a drop in pay, but there is potential for upgrading and there are better benefits when they do retire
Benefits – no benefits at the current company vs. benefits  at the new company when they retire
Pension into locked RRSP – Current pension will likely be placed into a locked in RRSP, and collected when they turn 55
How much, are you penalized in any way – Leaving early usually means you are penalized in some way regarding the amount of money you take with you


Can only withdraw % starting at 55 – percent you can draw at 55 is around 6%
Vacation – Probably will have less vacation since new employer will not want to provide as much vacation to a new employee

Sick days – currently no sick days allowed, while new job provides for sick days automatically
New pension? – What do you need to do to qualify for a pension at the new company?
RRSP goes to survivors – a big benefit of withdrawing pension from existing company is that anything that is left when you die goes to your estate and your survivors, not to the company that paid into your pension.
Must decide how to invest – With a self managed RRSP , you must invest wisely and carefully, this is your retirement

Should I Change Jobs – Opportunity to advance?

What are the opportunities to advance and increase your salary to catch up to were you were ?
Probability of being tapped to leave current job – There is a strong feeling by many people that they will never make it to retirement and will be tapped anyway to leave before their time for retirement is ready.
Are you leaving any money on the table – always the big question. How much money are you leaving. Can you negotiate a better package to take with you?
Benefits when you retire from new company – Never a a 100% guarantee, but then they already know that they will be retiring without benefits at the current company

Challenge & Job satisfaction – go together. Many people like a challenge and will not do well if they are not challenged and their job satisfaction suffers as well. This can be a downward spiral so sometimes it  is a good idea to move on and take that next job!

Finally, always make sure that you have an offer in hand before you make the leap from your current company.  You never want to find yourself without a job in today’s current economy.

Comments about this subject are welcome. Additional ideas and suggestions about what everyone should consider when looking at another job would be much appreciated.

Negotiate Before You Sign

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Negotiate Before You SignThis is another post about changing jobs that was instigated by a phone call from a friend who was thinking about changing jobs. You can check out my previous posts – “Should I Change Jobs” and “Leaving a Job, Talk to an Adviser”  and “Handing in my Resignation” which covers those topics. Also some of the things you should consider before making the decision to change jobs. In this case it is negotiate before you sign.

This post focuses on completing all of your negotiations for your new job before you sign your new contract. After you sign, all of your negotiation power is gone. The mantra of this post is always ask in a polite way about items you feel you need or want. The worst that will happen is that the interviewer will say no. There is of course a time and a place to bring your negotiating points up in the process to allow you to gain the most.  Hopefully the following comments and thoughts will help the reader in their quest.

When to Negotiate Details on New Job

There are many opinions about when you should negotiate details such as salary, benefits and perks on a new job. However the consensus seems to be that negotiation starts when you are discussing an offer that may be made to you. Always negotiate before you sign any documents.

Negotiating  salary, etc at an initial interview is not seen as a positive thing to do. No one has offered you the job. You may even turn the interviewer off by making demands too early. Wait until the interviewer has introduced the topic and even then go slow. If you sense that they are reaching closure on a potential offer, now is the time to discuss possible additions that you may be looking for. Note that I wrote discuss, rather than demand. It is all about reaching a compromise that both people can live with. Without being so demanding that you paint yourself into a box that you cannot get out of.

By the time you receive a letter offering you  the job all of the details should have been worked out and the letter should reflect those details. However if there is something missing that you felt had been agreed to, then obviously it should be discussed before you sign the agreement letter signifying that you are taking the job.

Negotiate Before You Sign – Alternate Solutions

There are many ways to solve issues and that is what negotiations are all about. An example of a colleague centered around vacation. The new job only offered 3 weeks vacation. However my colleague had been receiving 6 weeks vacation due to seniority with the current company they were with.

They knew that asking directly for 6 weeks vacation was going to be a non starter in this situation. However  they still expressed their concern about losing so much vacation on moving to a new job. Note that it was an expression of concern and not a negotiating demand.

The Human Resources person recognized that this was an issue for someone who was senior and brought a lot of experience to the job. They could not offer 6 weeks paid vacation, but what they could offer was the opportunity to reduce the salary by 10% and take an additional 6 weeks off fully paid at the lower salary rate. This was in addition to the regular paid 3 weeks vacation. Although they would be paid for 12 months, the pay rate would be 10% lower than the negotiated salary. For some people this is a definite win win, while others may feel they really need that 10%.

The point of this section of this post is that there are many ways to solve issues and create unique solutions. If you do not ask you may not be made aware of them.

Be Prepared for Negotiations At All Times

This is so important. You may find yourself negotiating during an interview when you did not expect it. Or you may receive a phone call from someone at the company you are considering after your first round of interviews. Rather than bring you in a second or third time, they may decide to complete final negotiations right there on the phone.

The point is you never know when you will be asked to consider a proposal. So you should always be ready. Know what you need to have. Know what you would like to have, and know what you are willing to compromise on. Be ready to negotiate the best deal you can at the time. Once you have said yes verbally and on paper, that is pretty much it. Unless you want to risk losing that particular opportunity! If you reopen negotiations after they were closed, it usually means that both parties can re-negotiate the agreement. Overall it is a bad situation to be in.

Comments are welcome about your experiences, do’s and don’ts etc. Anything that will assist our readers in their quest for better and more interesting jobs are welcome.

Alternative Retirement Solution to a Pension Cut

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Alternative Retirement SolutionMany people are dealing with reduced or eliminated pensions. Some are finding Alternative Retirement Solution that allows them to travel and live inexpensively in another country.

We saw this post a few weeks ago and thought that it might be of interest to our readers, who are planning to travel to Mexico for vacation or are looking to stretch their dollars further – Retiree’s Solution to a  Pension Cut

Alternative Retirement Solution

This was sent to me by email about Alternative Retirement Solution and I think it is a great idea for many people.

Alternative Retirement Solution Move to Another Country

One person investigated the cost of living, medical coverage, and lifestyle advantages and has recently bought a house in Ensenada which is only about 70 miles south of San Diego, California.

There is a sizable Canadian and American ex-pat population in and around Ensenada, San Felipe, La Paz, and a reportedly largely Canadian community in Todos Santos, all on the Baja peninsula. He and his wife were able to get retirement visas for Mexico based on his Nortel pension. As residents of Mexico, they are also eligible for free medical care, which in major centers can be very good.

He still has to pay the Canadian non-resident’s tax on his Nortel pension but this tax depends on the total dollar value of your income and can be very little or even zero on small pensions. Mexico, on the other hand, charges no income taxes on foreign income. Land taxes are very low compared to Canada and the USA. In his case, these are less than $100 CD. Utility bills as well are low, providing your use is moderate (i.e. the electrical charges are 3 tier system and the bottom 2 tiers are very reasonable). He finds it easy to stay in the lowest tiers and pays less than $10 CD per month.

Sample of Monthly Utility Costs in Mexico

  • Utility Pesos CDN_$
  • Electricity 120 10
  • Tap Water 60 5
  • Propane 300 25
  • Telephone_plus_Internet 420 35
  • Total 900 75

The cost of living in Mexico lets him achieve a comfortable standard of living for much less cost than if he had stayed in Canada. Expats that have lived in Ensenada for some time tell Wayne that a family of two can get by on as little as $600 Canadian per month plus whatever you pay in rent or mortgage, although $1000 per month provides a more comfortable living. Rent and house prices are much lower as well.

However, to qualify for a retirement visa (FM3) you have to demonstrate that you have a per person reliable income equal to or greater than 200 times the Mexican minimum wage or about $1000 CD monthly. There is a reduction for spouses and a reduction in owning your home in Mexico. Showing bank statements with regular deposits was enough for him and his wife to qualify for FM3 visas.

You can check here http://www.inm.gob.mx/index.php/page/pagina_principal/en.html for the requirements (and to practice your Spanish). There are businesses and individuals that help you with the paperwork, but the Snyders chose to do this for themselves. The Mexican officials are very cooperative and helpful. And you get more practice with your Spanish this way. Some ex-pats choose to stay with just a tourist visa which is available for just $10 at any port of entry.

Supplement Pension Income

There are ways to supplement your pension and still enjoy retirement. He knows ex-pats that work in the USA but lives in Mexico. Some manage businesses through the internet. Others work periodically in the USA then return to Mexico. He knows an electrician that schedules all his work in California for 1 week every 2 months this provides for his family. Another travels to Wisconsin twice a year and works for a month each time and this gives him enough for himself and his wife.

In the major cities and in tourist areas Spanish isn’t essential but learning it will add to your ease of living and enjoyment.

Owning Property in Mexico

Yes, you can own property in Mexico. If the property is 100 KM from the border and 50 KM from the coast foreigners can own the property outright. If the property is near the coast then the Mexican government has legalized a method for foreigners to own land. This is through a “Fidecomiso” or Bank Trust. This costs $500 US a year. In the past, some foreigners lost their property in Mexico. This was due to a land ownership issue. They bought from someone who didn’t have a clear title. But this pensioner’s experience is that now the title is thoroughly investigated and title insurance is available. The Real Estate and escrow companies they used were very helpful and competent.

Moving to Mexico

Moving your personal effects to Mexico can be either relatively easy and expensive or difficult and economical. There are movers that are authorized to move personal possessions into Mexico but they were prohibitively expensive. They couldn’t find a rental truck that they could drive across the US, Mexico border. So, that meant putting everything in the storage on the US side and using a trailer (again you can’t rent one and take it across the border) to move in many smaller loads.

Mexico allows a one-time duty-free move after you have your FM3, but the form costs $130 US and this was more than the duty on small loads. The first $75 per person is duty-free and 16% on the value of the property above that. But they are very lenient and often charged little or no duty. You do need a detailed list of your cargo in Spanish with the value. Google translate usually worked well. With the trailer they sometimes want you to cross at a commercial border crossing such as Otay Mesa instead of a tourist crossing like Tijuana. Moving their possessions themselves was the most difficult aspect of the move for the Snyders, but it saved a lot of money.

Crime in Mexico

In the media, there are many reports about crime in Mexico however crime varies from area to area.  All the locals that he spoke with a report that it is relatively safe. In fact, they felt that it was safe enough that his wife lived there alone for 6 months prior to her husband joining her. They feel safer in Ensenada than where he just finished working in the USA. There is a military base in Ensenada and there are military checkpoints on the highway. These are much, much less invasive than airport security checks. Ensenada’s police force is also very visible thus keeping crime lower.

Alternative Retirement Solution – Other Ensenada attractions:

The weather is wonderful! The ocean and the coast are beautiful! Ensenada is one of Mexico’s most prominent educational centers. There are many universities. People from all over Central America come to Ensenada for higher education. And the famous Baja 1000 race starts in Ensenada.

So take heart, at least one pensioner has been able to turn adversity into an adventure.  While this won’t work for everyone, it is nice to know that you do have options.

There are many web pages with helpful resources about living in Ensenada and other parts of Mexico. Many are commercial sites, so we don’t want to promote these here. You can search the internet for “living in Ensenada” and pick the information you find most helpful. There may be an Alternative Retirement Solution in your future.

If you have a story that you would like to share on how you have reorganized your life to accommodate the coming Nortel pension cut, please let us know by leaving a comment.

Retirement Surprises

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Retirement SurprisesThe biggest issues that new retirees tend to underestimate are not the standard things that everyone thinks about, but the surprises that come along that we either did not think about or did not plan for.  They are retirement surprises. We have assembled a list of items that may be standard to some people, and surprises to others. If yours is not on the list let us know by adding a comment. We will add it to our list for our readers.

Retirement Surprises

  • Assuming that spending will drop after retirement
  • Spending actually rose for many retirees
  • More travel
  • Travel to see the grand kids
  • Gifts for the grand kids
  • Health issues
  • Higher inflation
  • Living longer than the averages
  • Not tracking your expenses and savings
  • Car expenses and repairs
  • House expenses and repairs
  • Support of family members

Retirement Surprises – Plans Go Awry

No matter how much you plan, chances are that something will intervene to get in the way of your financial plan. Remember you are planning for the future which is a combination of some known factors and many unknowns that will crop up.

A common assumption is that you will only need 70% to 80% of your income after retirement. True you need less clothing since you are not dressing for work and you do not have to buy lunches and incur travel expenses to get to work. People tend to forget that they now have all of this time on their hands and typically what happens is that they spend money! It may be on travel or hobbies, but is money they did not spend pre-retirement to the same levels.

Travel To See Family

Even traveling to see the family involves expenses that you did not perhaps have while you were working. Grandparents often purchase lots of gifts for the kids as well.

You may be traveling more often to see them and doing side trips as well. Also you may be adding baby supplies including cribs, toys etc to your own home for when the kids come to visit.

Inflation

This is a difficult one to deal with. There will be spikes in the inflation rate and at other times almost zero inflation. Over the years, the average has been around 3%, which is a good number to include in your planning for retirement.  However you will need to adjust your estimates and savings level required every year to reflect the inflation levels and the overall cost increases for the things that you are interested in. For example if you like to go on cruises and they increase in cost every year by 5%, then you may want to account for this higher than average increase.

How Long Will you Live

People are living longer and longer. Start with the age that your parents lived, assuming that they lived an average life and did not die from accidents or other reasons. Add at least 10 years to your plan to adjust for the fact that we all are living longer and are healthier well into our retirement years.

Use a retirement planning tool to estimate your income, savings and expenses to assess if you will have sufficient funds available for your retirement. It is a good idea to stress test your plan by adding one or all of the following surprises:

  • Live longer
  • Higher inflation rate
  • Large Surprise expense

Hang with Like Minded Friends

This may seem silly at first, however if you follow this advice, you will spend time with people who have the same attitudes about spending money, about enjoying life and about extending their retirement years.

If you hang around with people who tend to spend a lot more than you do, next thing you know you will be spending this money as well and may find yourself short of funds in retirement years. This is a hard fact of life, but it is something to be aware of.

Work After Retirement!

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Many of our friends are retiring now from the job they have worked at for manyWork After Retirement years. Some are planning to continue to work after retirement, while others are adamant that they will not work again. They want to enjoy life and forget about having to get up to go to work. Various surveys have been completed by a host of organizations and it turns out that the majority of  residents expect to work after retirement, primarily to stay mentally and socially active. Many people are retiring earlier than our parents and they need something to keep them alert and active. Following this approach will actually help them live longer as well.

Work After retirement – Never

One couple we know tell us that not only do they not want to work again, they do not miss any of their colleagues at work. Their social life and challenges they get will be more than enough to keep them active.  In fact he listed the things he is not going to miss while retired:

  • Getting up early to go to work
  • Commuting to work everyday
  • Meetings with people he does not respect
  • Working on projects that make no sense to him
  • Not having the time to pursue hobbies

Sounds a little sad but that is their opinion! They plan to travel a lot and see the world. Another golf’s 5 or 6 days a week and loves it. They go south in the fall so they can golf even more and spend the winter in California golfing. Too much golf for me, but everyone has to find something that they enjoy. Another friend of ours plans to work as long as he can. He says he would be totally bored at home and would probably drive his wife crazy. This is also a little sad since it implies that he has no hobbies or interests outside of work.

Work After Retirement – Surveys

Surveys we have read about people who plan to retire, indicate that seven-in-10 (70 per cent) plan to work during retirement, primarily to remain mentally (72 per cent) and socially (59 per cent) active. However, nearly half of consumers (44 per cent) expect to work after they officially retire out of financial necessity. This latter group has not saved sufficient funds for retirement and feel they must continue working during retirement.

Many residents, as much as a third of  residents think they will need between one and two million dollars to fund their retirement, while half (51 per cent) believe they will need less than a million dollars. The remaining  group of retirees feel that they need (16 per cent) two million dollars or more for their ideal retirement.

The amount of money that you need really depends on the life style that you plan to lead in retirement. New cars cost money as do many trips and visits to family. Expensive condos or vacation homes are also a factor. Many residents are finding that the plan to downsize is really not practical with builders pricing homes at a cost that does not make sense to a lot of seniors.

Sources of income for most residents are :

  • Registered retirement savings plans
  • Savings
  • Investments
  • Pension plans for some
  • Government benefit programs

If you are retired and reading this post, you have already started your retirement journey. You are in the process of making decisions to work or not to work. If you are still working, save as much as you can afford now so that you have options when you do retire.

Comments from anyone who has retired and your thoughts about what to do in retirement are appreciated. Our readers will enjoy the assistance you may be able to provide them about working after retirement.

Enjoy Retired Life

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enjoy-retired-lifeEnjoy Retired Life? There are many studies that have been completed to try to figure out what helps to keep retired people happy and be able to enjoy retired life. After you boil away all of the words and statistics there seems to be several things that seem to emerge as key elements to enjoying retired life. These include and we must say here that they are not in any particular order:

  • Having sufficient money for your desired lifestyle
  • Matching your lifestyle with what really interest you
  • Being close to a supportive and loving family
  • Enjoying close friends and family
  • Having an active life in terms of social as well as activity
  • Having a rough plan that evolves with retirement

These are pretty general items and some people may rank some higher than others. Again the list above is not ranked because each of these items will have a different level of importance for each person. One couple we know has different views between them. The grandmother just wants to stick around home and see her children and grand children every week. she cannot get enough of them and does not want to go on trips. Her spouse on the other hand, loves his kids and grand kids, but wants to go on trips and travel a bit. He enjoys his family but occasionally wants a break. They will need to work this out between then and find a solution that works for them.

Concerns about Retired Life

It is only natural to have concerns about retirement. Most people are concerned about retirement however, it’s important to understand this is likely the fear of the unknown, which can often be an unfounded fear.

The best approach to deal with concerns is to talk about them with people who can assist you with these concerns. Whether it is a family member or a financial adviser discuss your concerns and develop a plan to deal with these concerns. Quickly the unknown will become known and you can approach retirement with confidence.

Regrets about Retired Life

When it comes to regrets, many people have regrets and these regrets manifest themselves as you get closer to retirement. If you are young and reading this post, now is the time to give some thought to these issues and do something about them to avoid them as you get older. If you are retiring now, why not address some of these issues as best you can to improve your retirement and enjoy it more.

Some regrets among retirees include:

  • Not taking better care of themselves;
  • Not starting to save earlier for retirement; and
  • Not traveling enough
  • The main regret of pre-retirees was not starting to save earlier for retirement .

Successful Attributes about Retired Life

The vast majority of retirees who say they are having a successful retirement indicate the following are very important to that success:

  • Biggest secret to retirement success being realistic expectations
  • Having saved enough money
  • Good planning ; and
  • Staying involved with people.

Having a realistic plan about retirement is tough to do. Usually there is a spouse involved. Both parties must face retirement together with similar plans. Other wise you risk disagreement and conflict that will get in the way of your retirement success.

Being retired, we can say that all of these ideas are excellent and something that we all should pay attention to. There is one more which we alluded to in the previous paragraph. That is excellent communication with your spouse. Which leads to shared goals and realistic objectives with your spouse. Sometimes you just need to talk things out and work them out until you find a solution that works for them.

We appreciate your comments and ideas about this post and retirement in general. Our readers will appreciate the suggestions and help that your comments provide.

 

Hiring Financial Advisors – 7 Mistakes

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Hiring Financial AdvisorsNone of us can afford to make a mistake when it comes to our personal finances. And yet many people will turn over all of their money, Sometimes to a complete stranger, under the guise that this person is a financial adviser. Hiring Financial Advisors should be done with care.

If you were planning to hire someone at work, would you hire the first person you talk to, hire them without talking to references or looking at their resume. Many people do this when they hire a financial adviser to manage their investments!  It happened to me and all the guy wanted to do was to buy and sell stocks for me. The worst part is that he could not even remember my last name! He did not last long.

Hiring Financial Advisors

What are the Mistakes that We All Make?

Here are seven common mistakes you can avoid when hiring a financial adviser.

  • Interviewing just one candidate
  • No background or reference check
  • Focusing the search on cost or payment style
  • Expecting credentials to make an adviser ‘good’
  • Expectations and results based entirely on returns
  • Letting the adviser control everything
  • Hiring friends and relatives

Let’s face it most people do ok because most advisers are honest and hard working. However, we have all heard of the terrible things that have happened to people that have lost everything because their advisers either made huge mistakes or defrauded them out of their life savings. If you avoid these most common mistakes, at least you have a better chance of avoiding losing everything.

Common Mistakes Made by Many People – 1: Interviewing just one candidate

You have decided that you need more than just a broker to help with your finances. You have questions about your investments and whether your savings will last into retirement. It is time to hire an adviser. Do you hire the first guy to come along or do you interview a number of people?

Do you buy the first house you see, the first car on the lot, and do you compare prices for items you buy? Why not compare the services from advisers? After this is your savings for you and your family for retirement. This is important, right?

Yet many people will hire the first person they talk to. Sometimes it is because a friend or a relative recommended them. Do you take the advice at face value or to do you do your own investigation? Sometimes word of mouth works great, but it still is the best advice to check several advisers out before you make a decision.

Common Mistakes Made by Many People – 2: No background or reference check

Fancy offices, nice cars, rich clients, and fancy clients do not mean success. After all, they could be living off your commissions or even your own money.

Check with references that you trust. Radio hosts who have advisers on their shows are looking to fill time on the radio not invest with the adviser. As long as they sound good they will have them on their show. This is not a reference check. Some of the time on the radio is even paid for by the advisers, so even though it sounds like investment advice, it is really just advertising.

Even after checking references etc, some may still get past you, however, the chances are much reduced and your investments will remain safe.

Common Mistakes Made by Many People -3: Focusing the search on cost or payment style

Everyone objects to paying fees for questionable advice. Most advisers collect fees by selling and buying investments on your behalf and therefore every recommendation must be suspect as a result.

Sometimes paying by the hour can be more beneficial and less costly, however, it really depends on the trading action and investment style you have.

The real answer is how much money you will make, “NET” and which approach will be more successful.

Common Mistakes Made by Many People –  4: Expecting credentials to make an adviser good

Professional credentials are easy to get for financial advisers. My adviser has a wall full and yet I don’t think I get any better advice from him than I did before he got all these diploma’s

Hire a person that you trust and not a credential; Even if you trust the person completely, never let go of the control of your investments. Money corrupts and after all, it is yours to lose not someone else’s.

Common Mistakes Made by Many People – 5: Expectations and results based entirely on returns

People hire advisers because they need help, they want to make money, and want to get their finances in order. They often fire advisers because they don’t earn a big enough” return.

For every person who gets rich quick, there are a thousand that lose their money. You want an adviser who is going to counsel you to ride over the bumps of the market. They should position you to have a nice nest egg by the time retirement comes around.

Long-term performance is what really allows them to ride the market roller coaster and retire comfortably.

Common Mistakes Made by Many People – 6: Letting the adviser control everything

It is your money and never relinquish control of your funds to someone else, especially your adviser. You have the most at stake, the most to lose so it only makes sense that you make the decisions!

Common Mistakes Made by Many People- 7: Hiring friends and relatives

It is hard enough to fire a person who works for you, i.e. your adviser, it is many more times difficult to fire someone who is a friend or a relative. If you have to fire that friend or relative, chances are they will no longer be a friend and your relative may not speak to you for a while.

Hire based on references, background checks, and performance.

 

 

 

Handing in My Resignation

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This is another post about changing jobs that were instigated by a phone call from a friend who was thinking about handing in his resignation and moving to another job. You can check out my previous posts – “Should I Change Jobs” and “Leaving a Job, Talk to an Adviser” which cover those topics and some of the things you should consider before making the decision to change jobs.

Handing in My Resignation – Do Not Burn Bridges

This post is focused on handing in your resignation, once you have done your homework and have made the decision to leave your current job. There are many ways to resign, however, the bottom line is that you never want to burn any bridges. In my experience, I have found that over the years you work with many people in many different companies and functions. Over the years you work with these same people many times even if you change jobs. You never know when good contact, a friend or a colleague can help you with a project, or the next job.

Handing in My Resignation – Be Professional

Always be professional, especially when you are handing in your resignation. Wait until you have a firm offer from the new company and then turn in your resignation to your boss. The personal touch is always best. By that, we mean to set up a meeting and do it in person or over the phone if they are in another city. Then provide the written signed letter of resignation. Keep your letter short and to the point and provide a final date, which will indicate your last day.

You should also extol the virtue of the company, the colleagues, and your experience and learning at your old company. Never say anything negative in your letter or even verbally. This is all part of networking, not burning bridges, and keeping your relationship professional!

How Much Notice Do I Need to Provide

The amount of notice varies a lot depending on the local laws, the company, how you feel about the company, even the level you are at within the company. If you are trying to maintain excellent relationships, giving a longer notice so they can find someone to replace you and you can transition to may put you in good standing over the longer term. Some people will bounce back and forth between companies a lot. Keeping a professional flavor to the relationship is always the best approach.

Some companies are very concerned about security and this really depends on company policy as well as the type of job you have. Some companies will accept resignations and walk you to the door because they are so concerned about security issues, while others will take advantage of the last few weeks to learn as much as possible from you. Whichever occurs don’t take it personally, it is just business and company attitudes about the security of information.

Being Nervous, Feeling Like You Are Letting the Team Down

Many people have a professional and nonprofessional relationship with their teammates at a company. If you are working on a project you may feel that you are letting the team down by leaving. You may even feel that you are letting the company down if they have treated you well over the years.

Sure some people will be disappointed that you are leaving and will be sorry to see you leave. Your boss may even be upset. Not because it is you that is leaving, but because he or she now has to replace you and find someone to fill in for you.

Members of your team, even your boss will be happy for you especially if you are leaving for a better situation. Whether it is better pay, less stress, more benefits or even a more interesting job, they will be happy for you. They might even be a bit envious and some will want to stay in touch so that they too can follow you, especially if they can improve their financial situation.

So bottom line, don’t be nervous and don’t feel guilty about handing in your resignation.

Say Nice Things

Before you leave as well as after you leave, always say nice things about the people and the company. No one wants to listen to a negative tirade about how bad it was at some other company. You never know when it might come back and cause you problems in future jobs, future sales, or future relationships.

If a job, company, or colleague is really not that great, then do not say anything at all. People will still get the message, and you will not be blamed as being negative or worse sued for libel.

There are some situations that are just not tolerable and this situation forces you to leave. If it is illegal, then you really should do something about it. Regardless you want to get as far away as fast as possible from this situation. Avoid being caught up in something that is really not good for your career and/or even freedom.

Feel free to leave comments and suggestions about this post, handing in resignations, changing jobs, etc. Our readers will benefit from constructive helpful comments.

Leaving a Job, Talk to an Advisor

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Leaving a JobOur last post was about a friend of mine who was contemplating leaving a job that they had been at for over 20 years. There are all kinds of issues to consider in making this kind of decision and we listed some of them in the post – Should I Change Jobs.

This post is more focused on what should I do when I change jobs about the pension money that is given to us when we leave a job. In Canada, you are not just handed the money, instead, the law requires that these funds be placed in a locked-in RRSP which you can only gain access to at age 55 or later. Even then you can only take out a certain percentage each year, around 6.5% initially. There are some laws that let you transfer some of the funds to a regular RRSP at a later date.

Leaving a Job- Talk to a Financial Adviser

This is where you need to get really serious about your retirement planning. You are leaving a company, they are giving you the vested amount of your pension and it will be locked into an RRSP. How should you invest it? What risk should you take? What are the regulations about withdrawals? There are loads of questions such as this which only someone in the business working every day on these subjects can really help you with.

Find a good financial adviser, who knows what they are talking about and is not just trying to sell you stocks and mutual funds. In fact, it is a good idea to interview several before making a decision about where you should place your investments.

Talk to friends, business associates, and professionals. Don’t just take one answer because it sounds good or they sound really confident. You need to collect as much information as you can and make your own decisions about what is right for you.

Even this post and blog is only one source and we blatantly will tell you that we do not have all of the answers. Each person is different, has different requirements, and different goals. Investigate and make the most informed decision you can.

Once You Have Made a Decision, Monitor Your Investments

This is so important. You cannot just make your investments and then walk away without tending to them on a regular basis. Treat your retirement plan and investments like a garden. It needs regular care, weeding, and watering.  So does your retirement RRSP.

Weed out the poor performing stocks, mutual funds, and any other investments you may have. Evaluate your risk tolerance. Invest in new growth investments, and collect dividends and interest on a regular basis. Pay attention to the investments. Never place it all into one stock or mutual fund, diversify and avoid high-risk investments unless you can afford to lose it all.

Meet with Your Financial Adviser

Starting a new job is always stressful, and leaving a job is also stressful. Just look at the issues to consider that we discussed in the previous post – Should I Change Jobs. However, this will pass. You will get settled into the new job. Get to know the people. Learn what you need to learn. Perform at a level that meets the needs of the new organization you moved to.

Once this period is over, and it should only last 3 to 6 months at the most, set up regular meetings with your financial adviser. Review your investments and assess the health and income that you are receiving from your investments.

This is so important and most advisers will initiate these meetings as well. However, if they do not do this, then you need to take the initiative. Meet with them on a regular basis. Review your statements. Make sure that everything is invested in a manner that meets your needs.

In summary, when you have answered the question – Should I Change Jobs – the next step is huge in the sense that now you are responsible for managing your retirement fund and making sure that you have enough money to retire and live the quality of life that you need and want.

Comments about this post are welcome as are ideas and subjects that we may not have considered.

Discuss Finances with your Spouse

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Discuss Finances with your SpouseMy friends in the financial planning business routinely tell me about couples who do not share information with each other about their finances and how one spouse or the other has no clue about what would happen to them financially if the other spouse were to suddenly pass away. Discuss Finances with your Spouse. A car dealer also told me that routinely many guys will come in and purchase a car, which is a major purchase. They do not even tell their spouse about it before completing the deal. Another friend of mine was looking for some advice about investments. So I sat down with him to go over what his options were.

I expected his wife to join in and at least listen. She not only did not join in the conversation, she said she had no interest in the subject and felt that her husband would make all of the right decisions. What a mistake in my opinion. In fact, now he has been diagnosed with short-term memory loss and probably does not even remember the conversation that we had with each other. This is another reason both spouses should be involved and at least know what the other is doing. Now she has no idea of what he is doing or has done and must investigate at some point. all of this could easily be prevented. It does not mean that she has to make the decisions in this case, but at least know where everything is, how much money is involved, and what the investments are.

Discuss Finances with your Spouse – Get in Involved

Even my own wife will not get involved in the details, although I have introduced her to our financial adviser and I routinely discuss investment changes with her, I know she is only half listening.

It is a well-established fact that women live longer than men. Chances are that your wife will have to deal with the aftermath of your investment planning. Doesn’t it make sense that she should know what is going on? I purposely used these genders in the previous sentence, since this appears to be by far the norm. With baby boomers retiring in droves it is even more important that everyone take more interest in planning their retirement years.

Men and Women have Different Goals and Objectives for Retirement

It should not be surprising that men and women have different ideas about retirement. Even though you have been with your spouse for many years your plans and opinions about what you would like to do in retirement may be quite different.

The only way to get at this is to start talking about your finances and your plans. Using a financial plan as the catalyst is a good way to start. A financial plan requires assumptions to be made about your needs for retirement. So discussing these assumptions will go along way to getting each other engaged in planning your finances.

Two Heads Better than One

Two heads are better than one anyway and I have definitely found that with my own spouse. Some of her desires are different from mine. She has come up with ideas and suggestions that I would not have thought about.

Sometimes when you state an assumption and someone asks you to justify that assumption, you are going to find out that you cannot. This challenge is good in that it makes you think things through better. So take challenges in a positive light and not as an affront to your planning skills.

Discuss Finances with your Spouse – Who Is Dominant

This subject may seem archaic. However, in every relationship, one spouse will be more dominant than the other in various areas. If one cares more or has more expertise, let them take the lead. However, never relinquish the topic solely to the other spouse. You need to stay involved for the reasons I mentioned earlier. Make a contribution to the discussion.

Your dominant spouse will appreciate your input and thoughts. Keep a mature attitude about the subject. Do not let your emotions get the better of you.

It is not easy to do a financial plan emotionally with your spouse. But it is well worth the effort. Once you have all of your assumptions made and the facts about your current situation identified, developing the financial plan is pretty simple! Use a third-party to assist in developing the plan. They can act as the common sense expert to help you through this emotional process.