Dave Hutchinson, CMA, CFP, BMath


Are you being laid off from your job? Whether you are part of a large group or if it only affects you, your employer is likely offering a severance package. This can be a very stressful time. There is a lot of uncertainty about when you will find new employment, will the severance pay last until then, how will you pay your mortgage or rent, etc.

It is essential that you obtain competent professional advice in this situation. You have a number of options for how you can structure the payment of your severance. The choice you make can either save income taxes, or cost you additional income taxes. The difference could make or break whether you can survive until you find another job.

Often when people lose their job they want to pay off debts. Using the severance money to do this seems to make sense. With the debts gone, or reduced, they should be able to make ends meet more easily. Or so they think! However, this is often the worst thing that you can do.

When you meet with me to review your severance package, we will address a number of areas:

  • Income tax savings
  • Amount of the severance. Is it reasonable or should you seek legal advice?
  • Cash flow and making ends meet for the next few months or years, until the new job starts
  • Benefits like health and dental plans and life insurance will end. Do you have other options?
  • Paying off debts
  • What happens to your pension and/or group RRSP?

I have helped many of my clients work through the details and advised them on the optimum course of action. If you would like me to assist you with this, please contact me to schedule an appointment. You will leave the meeting feeling more informed and in control of your situation!

How much does this cost?



David Hutchinson, B.Math,CMA, CFP