Just how ready are you for retrenchment or retirement?

Last week’s article, ‘How to prepare for life after retrenchment or retirement’, introduced you to three decisions you must make immediately you receive a letter of retrenchment.

I reminded you that previous experiences with retrenched staff from large government corporations such as Posta and Telkom, among others, did not go well, finding those retrenched ill-prepared to manage the money they were sent home with. This, in a way, cast retrenchment in bad light.

I have seen many people who ‘rediscover’ themselves upon retrenchment and achieve success that they had not all their working life. Such people regret why they stayed in a dead end job for years. What comes to mind is the Swahili saying, “majuto ni mjukuu.” These people may also well be part of the larger group of people who regret losing their jobs to retrenchment. Life for them has not been good since that unfortunate event. When setting goals, it is important to set goals for life.

Should you be retrenched, your regular salary income will end, and this will be the cause of most of the stress you will experience - the end of regularity, not the end of income.

Change mind set

When you have worked in an organisation for a long duration, you become like furniture in the office you occupy. Your ways are regular and fixed, in a pattern. Retrenchment replaces this regular life pattern with irregularity, and your regular income with a lump sum paid as a proportion of every 15 years you worked.

It changes you at the core and changes how you look at the next day. You need to consider how to adjust to these changes, the environment having done its part.

But the environment does not change your mindset, which is used to regularity and safety. Your mind begins to process uncertainty, risk, and fear of everything unknown even when the bank account is fat. A person in such a mental space is gullible.

I should begin by saying that we are all stressed whether with or without a job or safety. It is the difference in the relative levels of stress that make it visible in some people.

 When faced with the possibility of retrenchment, you need to first deal with the psychological transition that comes with it. If you don’t deal with this, you will most likely not make logical and stable decisions in the life immediately afterwards, which makes a recipe for financial loss.

 Most of those who may introduce you to poor speculative projects are not conmen, they are just inexperienced in business like you but are willing to take a risk with your money to do what they would not do with their money if they had it. But this would not happen if you were thinking logically, armed with investment knowledge.

Retrenchment

It is not the lack of money that causes people stress after retrenchment and retirement, it is their inability to digest the uncertainties, especially when they have young families while they themselves are relatively old. You need a clear mind capable of making logical, not emotional decisions, when you have been let go.

Retirees with alternative income sources are always in a batter financial and psychosocial situation. Your quality of life post retrenchment or retirement is directly correlated with your investment effort during the earlier phases of life. A yellow card training prepares people for generating alternative income once they are 45 years old, with 10 to 15 years to go. Look for one.

Patrick Wameyo is a financial literacy coach at Financial Academy and Technologies, and an entrepreneurship coach at The Entrepreneurship Center EA. [email protected]