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After 13 years of dedicated service, Ron Gardenhire was fired recently from his position as manager of the Minnesota Twins. The much-loved manager now has some big decisions to make in regards to his financial plan and his future.
1. Start by gauging his financial situation
While Gardy was paid well, the adage “it’s not what you make, it’s what you spend” still holds true. Ron needs to take a close look at how he spends money and assess where he is financially. At only 56 years old, if he retires now he has a long time to sustain his family without any income. While he is probably not at risk of missing a mortgage payment, there may be other financial goals that he was hoping to accomplish, like passing on wealth to his children or grandchildren.
2. Try to negotiate a severance package
Gardy was let go with one year remaining on his contract, and though that will be fulfilled, he might consider trying to negotiate a severance package. Priorities: asking for an extension of his health insurance coverage and some severance pay. Being let go for poor performance might make it harder to negotiate, so he should focus on the positive contributions he has made to the organization, including leading the Twins in multiple trips to the playoffs.
3. Re-run his retirement projections
I’m sure Ron’s financial plan wasn’t based on only working until age 56. He needs to run updated cash flow projections to see if his retirement is still on track. He should be looking at different scenarios to see what his plan looks like if he never gets another job, or finds a job but it doesn’t pay as much as when he was the Twins’ manager.
4. Look for ways to supplement his income
Ron might have a shot at managing another team, but he could also look for other ways to supplement his income. Many former players and managers get into broadcasting and sports commentary. It’s probably a lot less stressful then being a manager, but it also pays a lot less. Or if he was smart with his savings and investments over the years, he might have enough money to just live off his investments.
5. Reallocate his portfolio
After taking a close look at his financial situation and re-running his retirement projections, he can reallocate his portfolio to better achieve his goals. This may mean reducing the amount of risk in his portfolio, considering he may need some of that money sooner now that his income has been reduced. He can accomplish this by shifting his asset allocation to fewer stocks and more bonds.
The key for Gardy (or anyone who has lost a job) is to take a step back and analyze his current financial position. Reassess goals, budget carefully and consider other potential income sources. Finally, with this knowledge, he can confidently adjust his investments to better suit his new situation.