MyMoney Online, The Personal Finance series with Warren Ingram

How to survive retrenchment

The economy is toast.

Many companies must cut costs, resulting in retrenchments.

The Employment Act compels companies to pay employees it retrenches a severance package of at least a week’s remuneration per completed year of service.

Companies must pay outstanding leave in full.

Sars will tax all severance benefits according to the retirement tax tables.

Leave pay, bonuses and the final salary do not form part of the package and are taxed according to the normal income tax tables.

The Money Show’s Bruce Whitfield interviewed Galileo Capital Personal Financial Advisor Warren Ingram for his weekly personal finance feature.

Ingram discussed a number of steps you can take to soften the retrenchment blow:

  • Try and have a clear game plan for these kinds of events before the time so that you can make the best decisions, if this happens to you.

  • Have an emergency fund of at least three months’ expenses. If there is talk in your workplace of retrenchments; try to increase this to six months. It will help not to go into debt straight away; all this does is worsen your problem.

  • Try to reduce - or eliminate - all your short term debts like credit cards, personal loans, overdrafts, etc.

  • Analyse your monthly expenditure and cut costs where possible (things such as eating out, entertainment, etc.). Talk to your family so that they know what’s going on and the implications thereof.

  • If need be; take out money from your access bond rather than your credit card.

What not to do:

  • Avoid dipping into retirement savings. If you have a company provident fund; you might be tempted to take the cash. Doing so will just set you back for retirement.

  • Spend your severance package on a holiday or a new car.

For more detail; listen to the interview in the audio below.

Click here (then “like” the page) to follow Bruce on Facebook.

Enter your email address in the form below to receive a newsletter containing the most-read articles of the week from Bruce Whitfield’s The Money Show every Friday morning in your inbox.

Subscribe to our Business Wrap Newsletter

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
How to delegate (and why you must, whether you like it or not)

How to delegate (and why you must, whether you like it or not)

The Money Show’s Bruce Whitfield interviews Aurik Business Accelerator’s Pavlo Phitidis.

Our investigations conclude is wasn’t us – Dracore on SA’s biggest data breach

Our investigations conclude is wasn’t us – Dracore on SA’s biggest data breach

The Money Show’s Bruce Whitfield interviews Dracore Data Services CEO Chantelle Fraser.

Where to invest? Property vs 'a small business' vs 'an investment fund'...

Where to invest? Property vs 'a small business' vs 'an investment fund'...

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

Estate agent Aida admits it’s the source of SA’s largest data hack ever

Estate agent Aida admits it’s the source of SA’s largest data hack ever

The Money Show’s Bruce Whitfield interviews Stuff magazine’s Toby Shapshak.

Going to be hard to look the other way - Steven Powell on FBI probing Guptas

Going to be hard to look the other way - Steven Powell on FBI probing Guptas

Bruce Whitfield interviews Peter Hain (Wits Business School) and Steven Powell (Director in Forensics at ENS Africa).

Meet Whitey Basson (the retail guru who turned Shoprite into a R127bn behemoth)

Meet Whitey Basson (the retail guru who turned Shoprite into a R127bn behemoth)

The Money Show’s Bruce Whitfield interviews the former CEO of Africa’s largest retailer by far.

Popular articles
Are you eating good fish or bad fish?

Are you eating good fish or bad fish?

Author of Eat-Ting, Anna Trapido talks to #WeekendBreakfast host Phemelo Motene about the SASSI coded fish system.

[LISTEN] Five, grade five learners caught drinking alcohol at school

[LISTEN] Five, grade five learners caught drinking alcohol at school

Dr Sue Goldstein, Director at the Soul City Institute for Social Justice chats about parents drinking booze in front of children.

Why low sexual desire is not 'abnormal'

Why low sexual desire is not 'abnormal'

Low sex drive is common and non-sexual relationships can also be fulfilling, explains clinical sexologist Dr Eve.

Man wants end to six-year marriage after wife refuses to cook for him

Man wants end to six-year marriage after wife refuses to cook for him

Geoffrey Matovu filed for divorce in the Family Division of the High Court accusing Ms Tryphena Nakiyingi of being disrespectful.

Jerome Booysen of Sexy Boy's life could be under threat

Jerome Booysen of Sexy Boy's life could be under threat

A fight broke at a hospital where Booysen was admitted and it is believed Booysen was the target of the scuffle.

Estate agent Aida admits it’s the source of SA’s largest data hack ever

Estate agent Aida admits it’s the source of SA’s largest data hack ever

The Money Show’s Bruce Whitfield interviews Stuff magazine’s Toby Shapshak.

Going to be hard to look the other way - Steven Powell on FBI probing Guptas

Going to be hard to look the other way - Steven Powell on FBI probing Guptas

Bruce Whitfield interviews Peter Hain (Wits Business School) and Steven Powell (Director in Forensics at ENS Africa).

UCT engineering student creates affordable grey water system

UCT engineering student creates affordable grey water system

Nkosinathi Nkomo came up with a system that could turn grey water into usable water amidst the Cape Town water crisis.