“If you’ve been retrenched, you may have just days to decide what to do with your termination payment. That’s tough when you are under pressure and this is not the only decision you need to make.

For many people a job is more than an income – it’s an important part of who we are. So a career transition of any sort is one of the most unsettling experiences you can face in your life. But apart from the personal and emotional issues, there are some practical steps you can take.

practical steps

First, you’ll need money to get by. You might have savings, and your payment from your employer will include cash benefits. Things like unused annual leave, long service leave and the tax-free part of your payment. Make sure you understand your social security entitlements – and find out early because there are waiting periods.

Next, there’s the taxable part of your payment. This is a minefield because you can cash it in or roll it over into a super fund. The right choice depends on several issues from your age, to how much cash you’ve got and your superannuation status including your Reasonable Benefit Limit.

Then there’s your super itself and you’ll need to choose what to do within 90 days. That’s not long when you need to consider both the short-term and long-term impact of your choice.

Over the years I’ve advised people from all walks of life on retrenchment and career transition. And while every one of these people had their concerns and fears, the vast majority have gone on to bigger and better things.

Paul Clitheroe, ipac founding director, host of Channel 9's "Money" reports and Chief commentator for Money Magazine.

Make an enquiry or see an adviser now or call us on 1800 626 881.

The information provided in this article by ipac securities limited is for general use only and has not taken into account any individual's personal circumstances or objectives. You should speak to a financial adviser before taking any action.