Retrenchment can be daunting at any age, but especially at 50. Understand your financial priorities and retrenchment package essentials to secure your future.

Question: I am 50 years old and work for a large company. We have been told that the company will be going through a retrenchment process, and my role may be affected. I am not yet sure whether I will lose my job, but I am worried. I still have bond repayments and family responsibilities. What should I do now from a financial point of view, and what should I look out for in the retrenchment package if I am selected for one?

Answer: At 50, you are in a sensitive phase of your financial life. You are not at the start of your career, but you are also probably too young to treat this as retirement. The danger is that a retrenchment package can look like a large amount of money, but if it is used to fund day-to-day living for too long, it can quietly destroy your retirement plan.

Before you sign or spend anything, work out your survival budget. This is not your normal lifestyle budget. It is the minimum amount you need each month to keep the household running.

Separate your expenses into three categories:

• Essential;
• Important but adjustable; and
• Nice-to-have.

Your bond or rent,...