Navigating Job Insecurity with a Financial Plan That Paves the Way to Early Retirement

Have you ever felt stuck in a job, watching the news of layoffs and wondering, “Could I be next?” In today’s volatile job market, it’s a question more professionals are asking themselves. Whether you’re an experienced manager or have spent years as an individual contributor, the thought of job insecurity can be unsettling.

I know this feeling all too well, having worked through the Global Financial Crisis and a few other recessions. At the height of my career, earning a comfortable six-figure income, I made a bold decision—to take a career break. But what gave me the confidence to step away from a seemingly stable position? It all came down to one thing: personalised financial planning that is flexible to handle the lemons that life throws at you.

I recently spoke about this topic with Junus in a recent interview on the Building Financial Fitness Podcast and I decided to write an article about what we discussed on the show.

The Reality of Job Insecurity

In today’s world, even the most successful professionals are feeling the impact of economic uncertainty. Layoffs seem to happen every day, and industries are shifting faster than ever. You might be saving diligently, but without a plan to weather these storms, it’s easy to feel anxious about the future.

While we think that job security challenges may be a one-off thing, the reality is that the fast-changing economy will force us to revisit these challenges more often than we think. And as we get older, these challenges become harder and harder to overcome.

As I was planning my career break, it became clear to me that financial security is about more than just saving. It’s about building a financial and emotional buffer that can provide peace of mind, even when the future is unclear.

Why I Left a Stable Job and Took a Career Break

For many, leaving a stable, high-paying job might sound risky. For me, it was a decision made possible by years of careful financial planning. I had saved prudently, not only ensuring my savings and investments were aligned with my long-term goals, but also having enough flexibility to pivot some of these monies into short-term situational changes. Needless to say, I did not put all my money in ILPs that would have locked my money down for decades.

I had built a well-structured financial plan that considered the unexpected—whether it was market fluctuations, inflation, or future healthcare costs. Having this in place meant that I didn’t just take a break—I did so with full confidence that I could maintain my lifestyle and not create a detrimental impact toward my goal of early retirement.

Short-Term Strategies for Financial Flexibility

Let’s talk about the practical steps you can take to address short-term job insecurities, such as layoffs or pay cuts. One of the biggest factors that gave me the freedom to step away from my job was my emergency fund. This was my safety net, covering 6-12 months of expenses, so I knew I wouldn’t be scrambling if my income stopped. For those who are in their 20s, a 3-month emergency expenses fund may suffice because the commitments are low and it’s socially acceptable to live off their parents for a while, if necessary.

For my investment portfolio, I also made significant changes by swapping the asset allocation to have 25-30% of the portfolio in cash. This allows my portfolio to have a lower volatility and I would not be impacted by short term bear markets. I could draw down from the cash portion of the portfolio if I really need to.

For those worrying about job insecurity, having this financial cushion is a game-changer. But that’s not the only step you can take. Automating your savings and ensuring you’re consistently setting money aside can help you maintain stability during turbulent times. Even if your income fluctuates, your commitment to saving should stay the same.

Planning for Long-Term Job Security

While it’s important to manage the short-term, long-term planning is equally crucial. If you’re considering a career shift or a potential change in industry, you need to prepare your finances for the risks that comes with these moves. For example, the work you do in the new role may be totally different from the job description that you signed up. Or the boss you wanted to work under, may decide to quit within weeks from you joining and you end up with a boss from hell.

If you have built up a financial safety net through personalised financial planning, you create the option for yourself to confidently walk away from the bullshit, even without the next job lined up.

Before stepping away from my career, I took steps to ensure I was covered for the long haul. This included looking at potential risks like inflation and future healthcare costs, and making sure I had the right insurance to cover my protection gaps. A well-thought-out investment plan can provide the financial buffer you need to confidently navigate these transitions without fear of outliving your savings.

The Importance of Trust in Financial Planning

Many people are skeptical about working with financial advisors. I was too. In the past, I encountered advisors who seemed more interested in selling me products than in helping me achieve my financial goals. But building trust with a financial advisor who isn’t always focused on making money off you is key.

Another unpopular opinion is that you should really be in the driver seat by understand and learning more about financial planning because nobody cares about your personal finance more than you. It takes time to find a financial advisor who takes the time to understand your unique situation, someone who’s not just chasing a quick sale, but is in it for the long-term relationship.

A trustworthy advisor helps you make decisions that align with your values, providing personalised advice that gives you the confidence to achieve your goals. In my case, having the right guidance was essential to creating a plan that supported my break and continues to support my early retirement goals.

Practical Steps You Can Take Today

So, how do you take control of your financial future? Here are a few actionable steps you can start with today:

1. Build an Emergency Fund: Set aside 6-12 months of living expenses to create a financial safety net.
2. Automate Your Savings and Investments: Regularly transfer a portion of your income into savings or investments, so your money is always working for you.
3. Seek Trustworthy Advice: Find a financial advisor who understands your goals and can help you create a customised plan that prepares you for both short-term challenges and long-term opportunities.

Final Thoughts

If you’re feeling held back by financial fears or job insecurity, remember that you’re not alone. The key is to take control of your financial future with a clear plan—one that covers both the immediate uncertainties and the bigger picture of your long-term goals.

If you’re ready to make the shift and build the financial freedom you’ve been working for, let’s have a conversation. Together, we can create a strategy that gives you the confidence to navigate whatever comes next, without fear of running out of money or sacrificing your dreams.