Redundancy/Retrenchment financial advice?

[ExEngineer]

Crowdsourcing financial advice for a relative - appreciate any advice, suggestions, or general things to look out for….

Circumstances as follows:
- Current income ( prior to redundancy) - approx $300k/yr salary plus range of $50k - $150k annual bonus/variable on top
- Redundancy effective in ~3mths time (income will stop sometime Q1 2026, together with separation compensation)
- Separatiin compensation approx $50-100k, plus separate encashment and/or accelerated vesting of equity options
- Next job & source of income is undecided. Individual may choose to take 1-2 years break without working (cashflow sufficient to support this) - therefore income tax bracket & reliefs may be significantly different for YA 2025 vs YA2026.
- CPF SA not yet maxed but getting close, have been maximizing cash topups for past few years for tax relief (same for SRS).

Aside from above, any other factors/advice for managing finances in case of employment redundancy for a relatively high income-earner?

Thx much in advance.

 

[ExEngineer]

Crowdsourcing financial advice for a relative - appreciate any advice, suggestions, or general things to look out for….

Circumstances as follows:
- Current income ( prior to redundancy) - approx $300k/yr salary plus range of $50k - $150k annual bonus/variable on top
- Redundancy effective in ~3mths time (income will stop sometime Q1 2026, together with separation compensation)
- Separatiin compensation approx $50-100k, plus separate encashment and/or accelerated vesting of equity options
- Next job & source of income is undecided. Individual may choose to take 1-2 years break without working (cashflow sufficient to support this) - therefore income tax bracket & reliefs may be significantly different for YA 2025 vs YA2026.
- CPF SA not yet maxed but getting close, have been maximizing cash topups for past few years for tax relief (same for SRS).

Aside from above, any other factors/advice for managing finances in case of employment redundancy for a relatively high income-earner?

Thx much in advance.

Should have added….for Liabilities, zero debt except for mortgage on self-occupied private property (currently being serviced via cash, not CPF).

 

[highsulphur]

Nothing on
Dependents
Assets that generate returns
Expenses

 

[reddevil0728]

Nothing on
Dependents
Assets that generate returns
Expenses

Also no details of savings.

if got millions of liquid cash in the bank, what the comments might be might be quite different

 

[highsulphur]

Also no details of savings.

if got millions of liquid cash in the bank, what the comments might be might be quite different

That would still constitute assets that generate returns albeit low returns

 

[addict951]

Should have added….for Liabilities, zero debt except for mortgage on self-occupied private property (currently being serviced via cash, not CPF).

How are you ar? Got over 45?
If 50 alrdy, call it a day liao.
Btw, what exactly are you asking? Sibei general
How to make money if can’t find jod?
How to invest? What to buy?

 

[DevilPlate]

Kinda random post…..machiam like humble brag 300-500k income

 

[ExEngineer]

How are you ar? Got over 45?
If 50 alrdy, call it a day liao.
Btw, what exactly are you asking? Sibei general
How to make money if can’t find jod?
How to invest? What to buy?

Sorry wasn’t clear what asking.
Not how to find job or whether to find job, this my cousin can figure out for self (likely, retire early or take long break then decide later whether to find full time work, semi retire or whatever).

What Iwas asking was, assuming this person was doing all the “sensible” things for managing their money while being a (admittedly highly paid) salaryman. Meaning they DCA regularly some % of income, contribute SRS, avoid debt except mortgage (but in this person’s case, happens that they pay homeloan in cash not CPF). So they are more comfortable than most, but not multimillionaire (excluding house).

Assuming all this, what would we advise them to do differently in the coming years, assuming not employed at the same level of previous income ?
Genuine question.

 

[ExEngineer]

Kinda random post…..machiam like humble brag 300-500k income

Maybe uncommon but I don’t think so random.
Plenty of people are highly paid salary persons but don’t have much idea how they would handle finances differently if suddenly the pay checks stop coming.
In today’s world of redundancies I think might even be increasingly happening.

If you want to presume humblebrag (wierd, because I pretty clearly said this is not even me - just asking for someone in the family who is not even that closely related), that’s up to you bro.

 

[DevilPlate]

Maybe uncommon but I don’t think so random.
Plenty of people are highly paid salary persons but don’t have much idea how they would handle finances differently if suddenly the pay checks stop coming.
In today’s world of redundancies I think might even be increasingly happening.

If you want to presume humblebrag (wierd, because I pretty clearly said this is not even me - just asking for someone in the family who is not even that closely related), that’s up to you bro.

strange that u bother to type so long and post questions for someone thats not closely related.
Since not closely related, u wouldn’t know their actual financial circumstances.

Best advice would be to seek for professional FA/Banker or Fee based services like Providend.

 

[BBCWatcher]

Crowdsourcing financial advice for a relative - appreciate any advice, suggestions, or general things to look out for….
- Next job & source of income is undecided. Individual may choose to take 1-2 years break without working

That’s expensive in at least two ways. First, prospective employers are (on average) much less inclined to hire individuals with “unexplained“ lengthy breaks. Even “explained” long breaks can be problematic. Second, disability income insurance (DII) coverage lapses rather quickly (or in some cases immediately) without income from work.

Aside from above, any other factors/advice for managing finances in case of employment redundancy for a relatively high income-earner?

It’s the same as anyone, really: start cutting expenses now, start looking for another job now. Whether he takes a particular job offer is a separate question, but he should be looking. He can always say no, but he can’t say yes to a job offer that doesn’t exist.

Lifestyles often expand to fill or even exceed earnings. The fact his CPF SA hasn’t reached the Full Retirement Sum yet is a possible clue he’s not that far along in accumulating enough wealth to retire. At his income, $37,740 (plus $8,000 for top ups) is flowing into CPF. With little coming out (except MediShield Life and Integrated Shield base premiums perhaps), OA to SA transfers (what a high income person would/should rationally do), and CPF interest, the FRS is/was only about 7 years away.

By the way, he’ll still be in a relatively high tax bracket next year even if he’s only getting paid for part of Q1 (including total exit compensation). Maybe he drops from the 22% to the 18% tax bracket even assuming he plays video games in his pajamas for the rest of 2026. It’ll be something like that. Obviously he should be paying income tax on GIRO, which means he’ll still have fairly chunky income tax payments stretching into 2028 no matter what. Of course that won’t matter, and his tax bracket will stay higher, because he‘ll find another job, right?

I don’t think you mentioned whether he has dependents, or what might be called “latent dependents” such as a parent who’s currently getting by financially but who’d be in trouble if/when he/she needs long-term care. Sometimes evaluating financial stamina is a little more complicated than looking at your own immediate household. As another example, if he’s not currently a father but wants to be, a child involves some costs.

 

[259850]

One practical advice: Obtain credit cards and refinance mortgage (if needed) now while he still has regular salary income. Not to borrow on credit cards, but having a few cards is useful as many offer attractive rewards/cashback. Once you’re no longer on payroll it’s impossible to get any credit from Singaporean banks.

 

[BBCWatcher]

One practical advice: Obtain credit cards and refinance mortgage (if needed) now while he still has regular salary income. Not to borrow on credit cards, but having a few cards is useful as many offer attractive rewards/cashback. Once you’re no longer on payroll it’s impossible to get any credit from Singaporean banks.

Mortgages typically have a lock-in period that effectively bars premature refinancing. Some mortgages include an early repricing or conversion option that may not involve an income review. If the timing happens to work, great, but it may not. That’s one of the risks you run with a mortgage, that you’ll be unemployed and stuck with whatever the post lock-in rate happens to be. Periodic refinancing or repricing is something you should be doing already, whenever allowed, since that’s just ordinary shopping for the best interest rate deal.

However, you might be able to conserve cash. It might make sense to switch mortgage payments over to CPF OA if possible. You could also put property and income tax payments on GIRO if you aren’t already doing that. (You should be.) And you could ask your mortgage lender if it’s possible to extend the mortgage tenor — sometimes that’s possible, perhaps with a relatively small fee.

If you’re currently on a HDB loan you might consider a lower interest rate bank mortgage with a fresh, longer tenor. But there are some disadvantages in making that switch.

No, you typically shouldn’t rush out and get new credit cards when you’re on the cusp of unemployment. You would already have credit cards and be earning points/rebates/miles on them if you’re responsibly chasing those. A lot of people (mis)interpret that suggestion as “permission” to start carrying credit card balances and to rack up credit card debt. Bad idea. Even if you aren’t already chasing points/rebates/miles, now’s not the time to start. You have bigger problems than “missing” KrisFlyer miles (or whatever) — with too likely overspending and/or credit card balance carrying.

 

[TheDarkKnight]

Not even close but know the celery n job redundancy situation

On such salary bracket, can even semi retire n go enjoy life since SA almost maxed out, which is also sibei power that not close but know CPF amount even.

 

[DevilPlate]

One practical advice: Obtain credit cards and refinance mortgage (if needed) now while he still has regular salary income. Not to borrow on credit cards, but having a few cards is useful as many offer attractive rewards/cashback. Once you’re no longer on payroll it’s impossible to get any credit from Singaporean banks.

No salary income also can get CC by showing funds/FD

 

[BBCWatcher]

Not even close but know the celery n job redundancy situation
On such salary bracket, can even semi retire n go enjoy life since SA almost maxed out, which is also sibei power that not close but know CPF amount even.

We don't know that. There are plenty of high salary people who live paycheck to paycheck (or beyond/above paycheck to paycheck).

A CPF Special Account "near" the Full Retirement Sum only prevents destitution from age 65 onward. If for example you're 45 years old, it's truly great you won't be destitute during the final years of your life starting 20 years from now. But that's as far as it goes.

No salary income also can get CC by showing funds/FD

Right, but "Get credit cards!" should still not be your first, second, or even fifty-eighth task item when you're on the cusp of unemployment. However, arranging or researching low cost lines of credit might be something worth doing.

Imagine a conversation like this:

• Person A: "I learned today I'm being retrenched. My last paycheck will be in February."
• Person B: "That's terrible news. I'm sorry to hear that. Since you're going to be unemployed soon, make sure you're getting Linkpoints when you shop at Fairprice."

That'd be pretty ridiculous. (By the way, you can get Linkpoints if you have a Trust Bank debit card.) Focus on the real priorities.

 

[iCubes]

Sorry wasn’t clear what asking.
Not how to find job or whether to find job, this my cousin can figure out for self (likely, retire early or take long break then decide later whether to find full time work, semi retire or whatever).

What Iwas asking was, assuming this person was doing all the “sensible” things for managing their money while being a (admittedly highly paid) salaryman. Meaning they DCA regularly some % of income, contribute SRS, avoid debt except mortgage (but in this person’s case, happens that they pay homeloan in cash not CPF). So they are more comfortable than most, but not multimillionaire (excluding house).

Assuming all this, what would we advise them to do differently in the coming years, assuming not employed at the same level of previous income ?
Genuine question.

You didnt share what's the outcome this person is gunning for or trying to accomplish. So without a goal set, how can anyone advice you what to do?

 

[wira]

Sorry wasn’t clear what asking.
Not how to find job or whether to find job, this my cousin can figure out for self (likely, retire early or take long break then decide later whether to find full time work, semi retire or whatever).

What Iwas asking was, assuming this person was doing all the “sensible” things for managing their money while being a (admittedly highly paid) salaryman. Meaning they DCA regularly some % of income, contribute SRS, avoid debt except mortgage (but in this person’s case, happens that they pay homeloan in cash not CPF). So they are more comfortable than most, but not multimillionaire (excluding house).

Assuming all this, what would we advise them to do differently in the coming years, assuming not employed at the same level of previous income ?
Genuine question.

if assuming this person has been doing all the "sensible" things with his finances, ie DCA regularly into S&P500 or other good investments, contribute to SRS and no other debits and assume age is around 40+, i would think he/she should be already in a good place financially. most likely can affort to retire early or pursue his own passions

Of cos cant know for sure without details like whats the outstanding mortgage, any kids or dependents, are all health insurance covered already, etc.

 

[dereth]

We don't know that. There are plenty of high salary people who live paycheck to paycheck (or beyond/above paycheck to paycheck).

A CPF Special Account "near" the Full Retirement Sum only prevents destitution from age 65 onward. If for example you're 45 years old, it's truly great you won't be destitute during the final years of your life starting 20 years from now. But that's as far as it goes.

Right, but "Get credit cards!" should still not be your first, second, or even fifty-eighth task item when you're on the cusp of unemployment. However, arranging or researching low cost lines of credit might be something worth doing.

Imagine a conversation like this:

• Person A: "I learned today I'm being retrenched. My last paycheck will be in February."
• Person B: "That's terrible news. I'm sorry to hear that. Since you're going to be unemployed soon, make sure you're getting Linkpoints when you shop at Fairprice."

That'd be pretty ridiculous. (By the way, you can get Linkpoints if you have a Trust Bank debit card.) Focus on the real priorities.

Just a funny fact that after I was unemployed, my biggest regret was not getting a credit card for the other few remaining banks in Singapore. And also for not raising my credit limit.

Take note that I did not realize I was going to retire then. So, please don't state my situation being any different. Regardless of being just unemployed or retired, having the right cards could provide savings of hundreds or even thousands in the long run just like it did for me.

 

[d5dude]

One practical advice: Obtain credit cards and refinance mortgage (if needed) now while he still has regular salary income. Not to borrow on credit cards, but having a few cards is useful as many offer attractive rewards/cashback. Once you’re no longer on payroll it’s impossible to get any credit from Singaporean banks.

Crowdsourcing financial advice for a relative - appreciate any advice, suggestions, or general things to look out for….

Circumstances as follows:
- Current income ( prior to redundancy) - approx $300k/yr salary plus range of $50k - $150k annual bonus/variable on top
- Redundancy effective in ~3mths time (income will stop sometime Q1 2026, together with separation compensation)
- Separatiin compensation approx $50-100k, plus separate encashment and/or accelerated vesting of equity options
- Next job & source of income is undecided. Individual may choose to take 1-2 years break without working (cashflow sufficient to support this) - therefore income tax bracket & reliefs may be significantly different for YA 2025 vs YA2026.
- CPF SA not yet maxed but getting close, have been maximizing cash topups for past few years for tax relief (same for SRS).

Aside from above, any other factors/advice for managing finances in case of employment redundancy for a relatively high income-earner?

Thx much in advance.

Look for a new job right away if he intends to stay in the workforce, the long employment gap will make it very difficult to find another high paying job 2 years down the road, of course there is also the loss of potential income (1m over 2 years is no trivial sum).

Everything else is pretty much inconsequential, no amount of finance management is going to make much of a difference relative to the loss of income unless he has millions in savings/assets (which does not seem to be the case).