Redundant employees need financial advice
Long-serving employees who have received a substantial redundancy payout are often in urgent need of financial advice, according to HLB Mann Judd Wealth Management partner Jonathan Philpot.
People who have just received the largest lump sum payment in their life are in danger of making big mistakes without advice from a financial planner - particularly if they are facing the prospect of long-term unemployment, Philpot said.
"For those nearing retirement, redundancy may provide the opportunity for an additional boost to their savings, enabling retirement to be made sooner and/or more comfortable," he said.
If the taxable component of the payout is rolled into superannuation, it will only be taxed at 15 per cent, Philpot said. However, he added that for people who were further away from retirement, paying off a large debt (like a mortgage) could be a better idea than taking advantage of the tax savings in superannuation.
"The overriding thing for redundant workers to avoid is going on a spending spree even if they do feel in need of a holiday or retail therapy," Philpot said.
He also warned against using the redundancy payment to make a speculative investment or start a high-risk business, unless the plan had been thoroughly discussed with a financial planner.
Recommended for you
The FAAA is set to launch an initiative next week to boost adviser numbers, offering support for Professional Year candidates and their supervisors.
Advice licensee Centrepoint Alliance could be more open to a proportional takeover bid after shareholders rejected a special resolution around takeover provisions.
Global private markets firm Partners Group has appointed a client solutions manager to strengthen its service offering across Australia’s southern states.
An aging profession and impending adviser exodus are fuelling a shift in the advice practice landscape, according to Adviser Ratings’ latest report, while internal restructuring prompts adviser redistribution.
