# Should I take voluntary redundancy?



## ThomasAquinas (31 May 2020)

I am 50 and have been offered voluntary redundancy of a lump sum circa 50k and a continual income stream of half this until retirement age of 65.  I am mortgage free with 3 kids 2 almost finished college.  Other half is pretty secure although not with a huge income. The question is am I mad not to take this? Shift work is getting seriously more difficult as I age and I do not envisage looking for other employment.  Pension wise have a PRSA and defined benefit pension which is average at best.  This was not in our plans and so savings are circa 50k. I will not have to go there may be restructuring but nothing I cannot handle other than the effects of shift work on the body.  Any thoughts gratefully appreciated.


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## Leper (31 May 2020)

I am not a good financial advisor and if I were I'd be in a much more secure position than at present. However, I can add something to reduce some of your worries and feel free to ask me to expand my thoughts if you wish. You are not badly placed; lots of what life has thrown at you, you conquered. This is no big deal as most of us here put our children through primary, secondary and 3rd Level education. You're most of the way there and I think your greatest concern is leaving one job and perhaps entering another. 

If so, you are not the first person to do this and you won't be the last. Please don't think I'm over-simplifying things but let's not over think the situation. Your company is relieving itself of some staff and I bet this will recur after the first wave leaves. Eventually, you'll find yourself in the "firing line" and you may have to make a quicker decision. I think you see Mt. Everest in front of you and you must get to the summit. You don't train to climb Mt. Everest by climbing Mt. Everest; you get yourself fit, upskill, find lower mountains, adapt to the terrain etc and when ready you climb Mt. Everest. 

It appears you have time on hands to plan your future. There are courses you can do. You can upskill and it has never been more easy. So much is happening in your life you can't see the wood from the trees and you are fearing fear. Believe me, I was there. I'll never forget the sleepless nights, the sweat and the worry. Start now to upskill. Don't put it off, don't wait for the push and leave on your own terms. Whatever you are about to do, keep it to yourself (and family). They'll row in behind you and this comes through in your post. When you get that offer-you-can't-refuse jump on your terms and pretty shortly after you may wonder why you were wondering.


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## ThomasAquinas (31 May 2020)

Thanks for your feedback.  I suppose I am asking if I have enough to live on and am I crazy to give up a salary of circa 70k in these uncertain times.  I also would like to build up my pension if I had realised this was coming I would have saved more and prepared better I suppose that’s a lesson I have learnt in terms of finances.  We could in the long term down size and that would release a significant amount of money if things ever got difficult or there was an issue.  The other alternative is that I kick myself into gear and get fitter and I think that the shift work might be somewhat easier to handle.  I am probably totally unfit and need to overhaul myself physically as well as financially.


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## Hooverfish (1 Jun 2020)

I'm guessing from your username that you are female. I agree with the advice to jump now and retrain/find other work. But don't forget that the job market is much harder for women over 50 than it is for men (at least 15% age/gender difference even before COVID-19: https://www.cso.ie/en/releasesandpublications/ep/p-wamii/womenandmeninireland2016/employment/ ). And that if there is caring to be done for older members of the family, it could be assumed you will do it. None of this is necessarily bad, it differs for each person, but the big issue for women is we live longer, yet the barriers to finding ways to save enough for our retirements are higher. Just my 2 cents. It's not that it isn't the best route for you, but don't underestimate the difficulties - yet another ovary tax!


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## Feemar5 (1 Jun 2020)

I don't understand the continued income stream of 25K  from your employer - are you employed in the public service or a private company?    If a private company will they be in a position to guarantee this payment.     Have you checked the tax situation on your lump sum - if it is official redundancy it should be ok but no harm to check.   It's not a good time to give up a job but if it suits your personal circumstances and you are happy go with it.


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## ThomasAquinas (1 Jun 2020)

It’s not the public service but the income will be secure in payment.  I agree re the overall economic timing and the lump sum is tax free I think.   Its  difficult in that it was completely unplanned and unexpected to be honest just the current climate bringing about restructuring.


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## Leper (1 Jun 2020)

Apologies for not calling the situation as it is in my earlier post. Wrongly, I assumed you'd eventually find yourself in the line of fire for involuntary redundancy. You're earning €70K per annum, but you have shiftwork and as you get older you think you must make a better effort with your own efforts etc to be on top of your job. I bet you and I had the same job but with a difference of many years. When I first worked in the Public Service, I had shift-work, night duty, early morning attendance, split attendances, weekend duty and was earning pretty big money because of doing huge amounts of overtime. It interfered with my family life and I gave it up for much less money in another Public Service job with no overtime, no weekend work, no early morning duty, no night duty and a much better family life. Did I miss the money? You bet your rootin' tootin' bottom dollar, I did., j

With respect, where you are now, I once was. I think you know what you have to do.


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## Feemar5 (1 Jun 2020)

I am not a tax expert but as far as I know the rules are -  statutory redundancy is tax free - the tax allowances for discretionary payments are  €10,160 plus  €765 per year of service .   You need to check how much your statutory amount is and work it out from there.


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## ThomasAquinas (1 Jun 2020)

did a bit of googling and I think it also counts as part of the income of the year it is received so thank you I definitely need professional advice in terms of the tax liability so I know exactly where I stand.


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## NoRegretsCoyote (2 Jun 2020)

Ruththeboot said:


> I am 50 and have been offered voluntary redundancy of a lump sum circa 50k *and a continual income stream of half this until retirement age of 65.  *



I have never heard of something like this. It sounds amazing. Is there any limit on other work you can do while in receipt of the payment?

You would want to talk to a tax professional about how it is treated for tax purposes. Your union might also be able to help.


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## Sunny (2 Jun 2020)

NoRegretsCoyote said:


> I have never heard of something like this. It sounds amazing. Is there any limit on other work you can do while in receipt of the payment?
> 
> You would want to talk to a tax professional about how it is treated for tax purposes. Your union might also be able to help.



Didn't the DAA recently announce this as part of their redundancy options for staff over a certain age?


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## ThomasAquinas (2 Jun 2020)

Thanks for the replies I’m actually leaning towards not taking it. I’m just gone 50 and hadn’t planned for this even though no loans of any sort I would have put more into my pension or savings. I am a type A personality I need things in order and while in the short term this seems appealing I would definitely in a much worse position when I would actually draw down my work pension with the state pension not kicking in until 3 years later.  I just do not feel at a point where I am ready to change. In terms of getting another job there is no restriction on that but I think in the current climate I might struggle.  i would  definitely need to upskill and would be unlikely to find anything as well paying unless I undertook significant study at 50 I’m not sure I want to do that.  I really had no plan to retire early the deal is just so good that it seems daft not taking it.


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## NoRegretsCoyote (2 Jun 2020)

Sunny said:


> Didn't the DAA recently announce this as part of their redundancy options for staff over a certain age?



Maybe.

For me it's not at all clear what the continuing payment is:

Redundancy? For tax purposes I thought they had to be lump sums;
Wage income? Hardly, if the person is not doing work;
A gift? This would have other tax implications.


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## ThomasAquinas (3 Jun 2020)

The continuing payment is that a payment until retirement and the pension is drawn down and it’s then stopped.  I assume it will be taxed as any other income. This has happened previously but in terms of being classed as a gift I am unsure would that have different tax rates? I know for sure I need to speak to somebody who knows exactly what’s what re tax.


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## ThomasAquinas (3 Jun 2020)

Hooverfish said:


> I'm guessing from your username that you are female. I agree with the advice to jump now and retrain/find other work. But don't forget that the job market is much harder for women over 50 than it is for men (at least 15% age/gender difference even before COVID-19: https://www.cso.ie/en/releasesandpublications/ep/p-wamii/womenandmeninireland2016/employment/ ). And that if there is caring to be done for older members of the family, it could be assumed you will do it. None of this is necessarily bad, it differs for each person, but the big issue for women is we live longer, yet the barriers to finding ways to save enough for our retirements are higher. Just my 2 cents. It's not that it isn't the best route for you, but don't underestimate the difficulties - yet another ovary tax!


Sorry I missed your response and I appreciate the thoughts from a gender perspective because it is very relevant to my situation.  I have been giving this lots of consideration and the main issue is that I do not have enough pension contributions to leave it dormant for 15 years. That's not allowing for the later state pension and the 3 yr gap between the 2.  I have made being trying to get an appointment with an adviser but no joy yet just to independently review all the figures.


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## dereko1969 (3 Jun 2020)

Are you a Union member? They are usually well placed to give advice on issues like this and would have sourced external advisers to evaluate the proposals. Presumably there are a number of colleages being offered something similar?


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## Fire away (3 Jun 2020)

So they are going to pay you 35k per year for the next 15 years to do nothing plus the lump sum. You are debt free and kids rared. It's a no brainer really take on a part time job 10/15 hours per week for cash. House cleaning,ironing,minding kids etc. Net income wont be much of a difference and you have the next 20 years to enjoy life semi retired with your loved ones while you are still active. You only live once.


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## Thirsty (3 Jun 2020)

Fire away said:


> House cleaning,ironing,minding kids


Really? An educated professional and that's your recommendation?


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## Fire away (3 Jun 2020)

Yes. I didnt see the part poster was  educated professional was mentioned. All I see is shift work and age being a issue...?  The poster will be earning 35k with little expenses and kids put through college. What is the goal of life get to 68 with a big pot of gold and buy top of the range wheel chair. How many people given opportunity to walk away from job with guaranteed income of 35k PA to do whatever they want clean houses/ design a space rocket. Life is too short to follow the pot of gold to 68.


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## ThomasAquinas (3 Jun 2020)

Hi folks yes this is being offered out widely and I am a member of a union but they are very quiet on this issue if there are not sufficient volunteers then who knows.... I have a degree but would prob need complete upskilling to have a hope of any decent employment given the current situation.  I am so head wrecked with this I am even beginning to annoy myself I swing between I am taking it today to I am not taking it  the next day I 100% do not know what to do. I really appreciate everybody Taking the time to give an opinion its The feedback I needed.  I think I am just going to park it until I have a professional opinion on the state of my pension.


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## Hooverfish (4 Jun 2020)

Ruththeboot said:


> I have made being trying to get an appointment with an adviser but no joy yet just to independently review all the figures.


I put in a lot of effort to get a financial review for my partner last year. Unfortunately given the timescale of your decision, I found that the only way was to search out the different advisors and work through the effort of "interviewing" all their approaches until I found one that met mine and whose communications I felt I could understand clearly. Quite a few don't really offer fee-based approaches, because they say people aren't prepared to pay what it really costs for them to gather all the data and discuss your life-intentions to meet the independent financial advisor "rules". There are some. And their "prices" really do vary a lot so there is no quick way to find the right one on that aspect either. 

Again, this is just my experience, your mileage may differ on the same journey. I also did my own research and my own "back of an envelope" excel amortisation calculations on how my partner's funds might last in different circumstances. I was very happy with the advisor chosen but unfortunately COVID-19 has meant we had to put the resulting plans largely on hold. Which then resulted in having to take on full-time care of a relative with no social welfare available due to money in the partner's bank accounts...! So always remember, you really cannot predict where life will take you more than a year or two ahead. Live life for now, not for an imaginary golden future.


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## ThomasAquinas (4 Jun 2020)

So true I can remember reading this forum years ago on maternity leave and now I have adult children.  The whole process has been beneficial in that it has made us look at how spend our money and also our lack of financial planning.  I am  trying to organise seeing somebody to review our situation thank you for your experience re that.  My partner and I definitely have come to the realisation that we were drifting through rather than living life to the maximum.  I realise everybody has different approaches and expectations but I am glad to have stepped back and taken a close look at the bigger picture.  It has been almost cathartic.


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## lledlledlled (4 Jun 2020)

Ruththeboot said:


> Sorry I missed your response and I appreciate the thoughts from a gender perspective because it is very relevant to my situation.  I have been giving this lots of consideration and the main issue is that I do not have enough pension contributions to leave it dormant for 15 years. That's not allowing for the later state pension and the 3 yr gap between the 2.  I have made being trying to get an appointment with an adviser but no joy yet just to independently review all the figures.



I would stay put, based on the fact that you dont have sufficient pension contributions.


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## ThomasAquinas (4 Jun 2020)

Thank you for your feedback thats the decision i have come to hope I do not regret it but it is what it is.


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## Leper (13 Nov 2020)

Ruththeboot said:


> Thank you for your feedback thats the decision i have come to hope I do not regret it but it is what it is.


Hi Ruth,

Just following up (and it's none of my business) how did things pan out for you? Don't answer if you wish.


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## lowspender (16 Nov 2020)

I left on better lumpsum conditions but if I had not great savings I don't think it would work.  Pension amount is very important as the years go on.


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## bitethebullet (5 Jun 2021)

I was talking to my dad and he was offered redundancy at 52 but he didn't take it. |Says he still regrets that decision.
I work shift also incl nights. I'm 50 and finding the hours very tough. As you get older it defintely gets tougher. I'd take that offer in a heartbeat if it were me. Still young enough to get something with more sensible hours.


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## ThomasAquinas (8 Jun 2021)

Funnily enough I just left it and had decided I wouldn’t take it. Then after 18 months changed my mind and  I’m going to take it now but there are Union negotiations to be agreed first kind of a quid pro quo before I can get a date. The company say they will not allow these voluntary exits until things are agreed. This kind of suits as I have maximised pension contributions and the markets seem somewhat better although that can change so easily.  I have approx combined €400k pot in 2 dc funds and 8k annually in a deferred db scheme not getting any inflationary benefits. Eldest started in one of the big 4 trainee accountant. Second starting a 2 yr masters which will cost me and youngest still in school.  I am actually trying to park it in my mind in case it doesn’t happen but I’m pretty sure it will.  So glad I got the chance and time to reconsider.  Shift work is a f***er it truly is I would really advise against it long term.  For me the change of heart was really considering how much money do I actually need? That’s different for everybody I guess but also our house is currently worth approx 850k mortgage free and if the proverbial really hit I would be perfectly happy to downsize I’m not attached in that it’s bricks and mortar and if we get into bother it is an asset that can release equity.


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## SPC100 (9 Jun 2021)

The more I read about sleep and our circadian cycles and affects on health, the more I would be wary of one of my loved ones working shift. Especially if the shift hours change regularly.


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## ThomasAquinas (9 Jun 2021)

SPC100 said:


> The more I read about sleep and our circadian cycles and affects on health, the more I would be wary of one of my loved ones working shift. Especially if the shift hours change regularly.


We are becoming far more educated in terms of our physical and mental health and the necessity of quality rem and deep sleep. I think it’s something that cannot be under estimated. There are some people who manage to balance it better than others but fundamentally I have a brother who is an actuary and he says the calculations in Terms of life expectancy factor in shift work. That said it’s great in terms of organising child care and often has higher remuneration but for me personally I think the cost must always be considered.


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