Within a couple of months of your planned retirement date, the company who employs you decides to make you redundant and hand you a redundancy payout. The extra $40,000 to maybe $50,000 would certainly be a bonus, like a small lotto win. An ideal situation and no doubt one we all dream about.

However, if you were to receive the redundancy one or two years before your planned retirement date, how would you feel?

Not as happy I am sure.

You are in your early 60s, have not quite reached your financial goals to ensure your retirement is comfortable, the maintenance and planned expenditure you had budgeted for in the one to two years prior to your retirement will now be an issue. All these well thought out plans have now been thrown into chaos.

What do you do?

If you read most articles on redundancy, your next course of action could be to upskill. Take some time to learn a new skill and consider a career change.

As a person in their late 60s and hoping to retire in one to two years, do you have time to learn a new skill and look for a new career? To be brutally honest it would be the last option I would consider

The difficulty in this situation I believe, is you have been looking forward to your retirement after 40 plus years and were hoping the last couple of years of your working life would go by quickly.

The temptation in this situation is to retire early.

This could be an option, but before you decide this is the only choice, there are a number of steps you need to take:

1. Do not rush to any decisions. Breath and take stock of your position. Take a hard look at your current financial position. What debts do you still have?
2. Remember your retirement plans. Have they been compromised because of two less years of superannuation contributions?
3. Ask yourself if you are willing to scale back your plans because of a reduction in your targeted financial goals.
4. Find temporary work for a short time. You may find that you enjoy working in a less stressful position and are happy to continue to work towards your financial goals.
5. Is your partner still working? Are they going to retire with you? Could you sit and wait for your partner to finish work in two years on your planned retirement date?
6. Speak to someone. A financial adviser can help you to understand different scenarios with regards to your finances.
7. It is important to not take the redundancy personally. Do not become bitter and twisted. Speak to a qualified counsellor if you feel this is going to be an issue.

This is not an exhaustive list and I am sure you could suggest other courses of action to take, but the list is a start and will help you think very carefully before rushing any decision which you may regret.

Unfortunately, in this environment, being made redundant is a harsh reality. And yes, if it does come just before a person was planning to retire, it can be a huge bonus.

However, if it comes a little too early it can be stressful and a disruption to your well thought out plans. But do remember it is just a disruption. Your retirement plans can still be achieved even if you do have to compromise them a little.

As a footnote to this post, redundancy payouts are complicated and there can be tax and superannuation issues, so please do talk to someone who is skilled in these areas of financial planning.