5 steps you can take if you are an expat in Europe and have been made redundant
If you are an expat or international professional living in Europe away from your home country, the prospect of redundancy can cause far bigger complications to your life. As economic uncertainty in some sectors continues while government support to businesses winds down in some countries, redundancy is a very real risk for some expats.
If you are made redundant, it usually means your position is no longer required in the organisation, so it is not like being sacked where you will be replaced. When you are made redundant you will typically receive a payout. That payout will depend on the rules and requirements in the country in which you are living and any specific policies within the organisation. It is meant to give you time to find a new job.
What are the 5 steps you need to take?
1. Residency. The first step you need to take is different if you are an expat compared to if you are living in your home country and can have a considerably larger impact on your family life. You need to check your ongoing right to continue living in the place you are calling home. Are you able to, and do you want to, keep living in that country?
This is a big life decision. If you choose to, or have to, move on, that means new schools for your children, moving out of your house, maybe selling property, working out where you will live next, managing the international relocation, and all the while looking for another job.
It becomes clear why it is a much bigger deal if you are an expat.
2. Short term finances. Check your short term finances, your reserve and emergency funds and your ability to meet your cost of living over the next few months. This will give you security as you look for a new job and/or plan that big move to a new city, a new country or back home.
At Extended Investments Limited we always recommend two important components when it comes to investing for expats, and it shows just how important they are in times of uncertainty like this.
The first is having a cash reserve of at least 3 months cost of living. This means you can carry on making those big decisions knowing the bills can be paid.
The second is to always have liquidity in your investments. Yes, your investment may be for a long term goal, but in times of real need it is good to know you can access some of it if you absolutely need it, without restriction, delay, or exit fees and any other costs.
3. Review your assets. When you are planning your next steps post redundancy, it is important to review all your assets, not just your short-term finances and make sure they are appropriately structured for your current requirements and longer-term objectives.
4. Check your pension. Pensions are an area that are frequently overlooked by expats. If you are changing employer, and especially if you are moving countries, understand where your pensions are, how much they are worth, and whether you are obligated to move them or if it is better for you to bring them together. The right decisions on your pensions can have a meaningful impact on your retirement.
5. Revisit your long term goals. A change in your life, brought on from a redundancy, can make you re-think your long term goals. Maybe you will change where you want to retire or when you want to stop working. The changes can impact how much money you will need in the future. Take the time to review and speak with an independent financial and investment adviser like Extended Investments Limited. We can help you to capture what’s most important, quantify it and turn it into actions you need to do now, to get there.
Being made redundant can be one of life’s most stressful events, especially for expats. If this is happening to you, or you think you may be at risk of being made redundant, reach out to us and we can help you with the financial and life planning aspects to help you manage the change.
