Do I take the separation package offer?

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GerryL
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Do I take the separation package offer?

Post by GerryL »

Looking for some Boglehead insights about the offer I got today as part of a headcount reduction action at work.

For quite some time I have been planning to retire in May 2015. Not early. Not terribly late. But that is what the plan has been. I now have an offer to separate voluntarily about a year ahead of schedule. I suspected something might be coming, so I started preparing myself psychologically for such an offer several weeks ago. I am seriously considering it and will need to make a decision in less than 2 weeks.

* Based on my time with the company I would get 38 weeks of pay plus pro-rated bonuses. (Officially I would be retiring and would get anything that comes with the retirement package.)
* They are also offering a year of Cobra at company expense. I figure this is pretty much meaningless for me because I am medicare eligible and Cobra doesn’t count as a qualified plan, so I would have to sign up for medicare. The plan is the HDHP I started in January and on medicare I would not be able to take advantage of the HSA. (I have inquired about making a deal to get some other benefit in place of Cobra, but this is a package deal offer so that may not be possible.)
* The time between decision and departure is short (less than a month) but because I am eligible for my sabbatical I could opt to take my planned 2-month sabbatical and leave a day or two after my return. (Could also have my last day be before sabbatical, but for a variety of reasons I don’t want to do that.)

So, essentially I could work for another year (with 2 months + vacation off) and keep earning my full salary or stop working a year early and get 38 weeks of pay (plus 2 months full pay for sabbatical). I’m in very good shape financially. Money won’t be a problem. I’m inclined to take the offer, but I’m feeling rushed and need to bounce this off cooler heads.

We are going through a lot of changes at work and it’s not all fun. I could look forward to a year of challenges (rewarding) and aggravation (not so fun). I would miss the camaraderie, but that was going to end in another year anyway. I expect to keep in touch with some of my colleagues, but we all know how that works once someone leaves.

Any insights you can offer would be appreciated. Anything I should be thinking about? Questions I should be asking? (Yeah, I know: tough problem to have. :wink: )

GerryL
livesoft
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Re: Do I take the separation package offer?

Post by livesoft »

I don't really get it. You could work 52 weeks and get paid or you could work no weeks and still get paid for 46 weeks. Hmmmm.
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jebmke
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Re: Do I take the separation package offer?

Post by jebmke »

Vinny: Hey, Vincent LaGuardia Gambini--
Lisa: His name's J.T.
Vinny: J.T., I believe you and Lisa played a game of pool for two hundred dollars, which she won; I'm here to collect.
J.T.: How 'bout if I just kick your ass?
Vinny: Oh, a counteroffer. That's what we lawyers, I'm a lawyer, call that a counteroffer. Let me see, this is a tough decision you're giving me here. Get my ass kicked or collect two hundred dollars. Hmm, let me think. I could use a good ass kicking, I'll be very honest with you. Nah, I think I'll just go with the two hundred.
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Random Musings
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Re: Do I take the separation package offer?

Post by Random Musings »

April 1st was almost a week ago.

RM
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ClevrChico
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Re: Do I take the separation package offer?

Post by ClevrChico »

It sounds like a nice offer to me!

Do companies offer such packages out of moral obligation? With employment at will, couldn't they terminate anyone for a $0 package?
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Watty
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Re: Do I take the separation package offer?

Post by Watty »

livesoft wrote:I don't really get it. You could work 52 weeks and get paid or you could work no weeks and still get paid for 46 weeks. Hmmmm.
+1
We are going through a lot of changes at work and it’s not all fun. I could look forward to a year of challenges (rewarding) and aggravation (not so fun).
You are over 65 and they have offered you a severance package to leave a year early so I would suspect that there is a good chance that your roll in shaping the upcoming changes could be limited and frustrating.

It could be that this is their way of easing you out on good terms and that if you stick around for another year you could be on bad terms with them by the end of the year. I would guess that you have had a good career and reputation with the company and if you have a bad last year that could be what you and they remember a lot more than all the good years.

I don't see a lot up upside to staying either financially or by getting to do rewarding work that you enjoy.
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cfs
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Re: Do I take the separation package offer?

Post by cfs »

Don't walk.

Run out of the door.

Thanks for reading this note.
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GerryL
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Re: Do I take the separation package offer?

Post by GerryL »

Watty wrote:
livesoft wrote:I don't really get it. You could work 52 weeks and get paid or you could work no weeks and still get paid for 46 weeks. Hmmmm.
+1
We are going through a lot of changes at work and it’s not all fun. I could look forward to a year of challenges (rewarding) and aggravation (not so fun).
You are over 65 and they have offered you a severance package to leave a year early so I would suspect that there is a good chance that your roll in shaping the upcoming changes could be limited and frustrating.

It could be that this is their way of easing you out on good terms and that if you stick around for another year you could be on bad terms with them by the end of the year. I would guess that you have had a good career and reputation with the company and if you have a bad last year that could be what you and they remember a lot more than all the good years.

I don't see a lot up upside to staying either financially or by getting to do rewarding work that you enjoy.

Actually, the package is offered to everyone. A role of the dice for the company because they don't know who will bite. My boss told me -- before the offer was made -- that she had no wish to see me leave before my planned retirement. And the team is starting to take action on a project I recommended. I enjoy the ability to continue contributing at a high level, but as I told the team "How you implement is up to you because you will have to live with it ... I won't." So I enjoy having an opportunity to leave a mark, but I don't need that to enjoy life. And the numbers are looking good.
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Watty
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Re: Do I take the separation package offer?

Post by Watty »

ClevrChico wrote: Do companies offer such packages out of moral obligation? With employment at will, couldn't they terminate anyone for a $0 package?
Depending on your state law they likely can do that or to pay two weeks in lieu of notice but there are reasons not to including;

1) To get a severance package you will likely be required to sign an agreement not to sue the company for something like discrimination, including age discrimination. It will also likely include requirements not to disparage the company to customers or on-line.

2) It help the remaining employees be less nervous and make it less likely that the better employees will leave.

3) Having an employee leave on good terms make it a lot more likely that an ex-employee will be cooperative if there are questions they can help with after they leave. I have left jobs, voluntarily, then gotten call from my old manager asking me something that I could answer in a couple of minutes that would have been very hard figuring out without having been pointed in the right direction. Depending on your job you might be needed to give a deposition or to testify in a law suit later on which would be awkward if you had been abruptly terminated.
WhyNotUs
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Re: Do I take the separation package offer?

Post by WhyNotUs »

As someone who has been self-employed there whole adult life, these choices seem incredible to me. I have never had a paid vacation. Congrats on your hard work putting you into this position. 46 weeks of pay to transition into retirement would have me spending all my time on Kayak and Tripadvisor.
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privateer79
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Re: Do I take the separation package offer?

Post by privateer79 »

livesoft wrote:I don't really get it. You could work 52 weeks and get paid or you could work no weeks and still get paid for 46 weeks. Hmmmm.
OP: Don't forget about the free Fruit, Coffee, and Soda. ;P

personally as a shareholder of "XXXXX" Corp I'd wish you'd stay... but as Livesoft says... for you its a no-brainer.
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wjo
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Re: Do I take the separation package offer?

Post by wjo »

GerryL wrote: Actually, the package is offered to everyone. A role of the dice for the company because they don't know who will bite. My boss told me -- before the offer was made -- that she had no wish to see me leave before my planned retirement. And the team is starting to take action on a project I recommended. I enjoy the ability to continue contributing at a high level, but as I told the team "How you implement is up to you because you will have to live with it ... I won't." So I enjoy having an opportunity to leave a mark, but I don't need that to enjoy life. And the numbers are looking good.
I'm more on the side of those who know you will be leaving in a year anyway will start to discount your input, even if it is appreciated right now.

With a lot of changes evidently coming, who knows if your project will continue according to current plans?

If your boss/team values you, you can stay in touch. It might even be worth it to consult (perhaps at a very low rate) for your boss/team for awhile to ease the transition. This might be as much a mental health thing for you than anything else. The hardest thing I see about colleagues who retire is that it is very difficult to rebuild their lives outside of work. I suspect this is probably the only reason you are even considering staying...the need to build new affinity groups and you haven't really had time to prepare.

Personally, I'd take the severance package - no brainer on the stress and $$$. Figure out how to gracefully disengage/engage in other pursuits.
busterk
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Re: Do I take the separation package offer?

Post by busterk »

You have to ask?
Take the package and don't look back.
They will get along without you.
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BHCadet
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Re: Do I take the separation package offer?

Post by BHCadet »

Can you take unemployment benefits too?
2comma
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Re: Do I take the separation package offer?

Post by 2comma »

I can answer that one, no unemployment - this is a voluntary offer.

I got a better offer, but at a younger age (2 years pay and 25k towards health care). Unlike you I was born to retire. I had 6 months to decide so no rush judgement. If you fell like staying good for you, if not also good for you. I wouldn't let being rushed into retirement by a little bit bother me much if you are already financially prepared but if you need a little more time to finish so be it.
If I am stupid I will pay.
HopeToGolf
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Re: Do I take the separation package offer?

Post by HopeToGolf »

This decision is easy, try to negotiate more and take the final offer and leave.

You worked at the company for XX number of years. If you have not contributed what you wanted to in order to leave the impression you desire, working an extra year in a downsized company is unlikely to give you the opportunity or platform to get whatever it is you seek from work.
madbrain
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Re: Do I take the separation package offer?

Post by madbrain »

GerryL wrote: * They are also offering a year of Cobra at company expense. I figure this is pretty much meaningless for me because I am medicare eligible and Cobra doesn’t count as a qualified plan, so I would have to sign up for medicare. The plan is the HDHP I started in January and on medicare I would not be able to take advantage of the HSA. (I have inquired about making a deal to get some other benefit in place of Cobra, but this is a package deal offer so that may not be possible.)
It's not meaningless, it may be extra money.
The company will probably simply give you enough money to pay for 1 year of COBRA.

When I was laid off 3 years ago by a large company , the company offered 6 months of COBRA, and that's what they did. Also, the amount was "grossed up" to account for taxes, so it would really be enough to pay for COBRA, had I chosen to elect it. But I had another job within 2 weeks, and just put it in my savings.

Others got optional early retirement packages, too, which I believe were very similar. It did require 10 years with the company and age >50 for eligibility.
So, essentially I could work for another year (with 2 months + vacation off) and keep earning my full salary or stop working a year early and get 38 weeks of pay (plus 2 months full pay for sabbatical). I’m in very good shape financially. Money won’t be a problem. I’m inclined to take the offer, but I’m feeling rushed and need to bounce this off cooler heads.
I would definitely take that offer if I were in your situation.
livesoft
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Re: Do I take the separation package offer?

Post by livesoft »

GerryL wrote:My boss told me -- before the offer was made -- that she had no wish to see me leave before my planned retirement.
I don't think one can take this at face value. Have you ever been in the position of your boss? These offers have probably been discussed by the "leadership" for at least a few weeks now if not months. Your boss may also have an offer to leave or she may get an offer in a few months.

I don't think anyone would say "I wish you would leave now before your planned retirement." or "Why don't you retire now?"

If they wanted you to stay, they would not have made the offer. They want you to go.
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porcupine
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Re: Do I take the separation package offer?

Post by porcupine »

jebmke wrote:
Vinny: Hey, Vincent LaGuardia Gambini--
Lisa: His name's J.T.
Vinny: J.T., I believe you and Lisa played a game of pool for two hundred dollars, which she won; I'm here to collect.
J.T.: How 'bout if I just kick your ass?
Vinny: Oh, a counteroffer. That's what we lawyers, I'm a lawyer, call that a counteroffer. Let me see, this is a tough decision you're giving me here. Get my ass kicked or collect two hundred dollars. Hmm, let me think. I could use a good ass kicking, I'll be very honest with you. Nah, I think I'll just go with the two hundred.
I'm with Mr. Gambini. I'm one big fan of him ... and his accent. ;-)
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Igglesman
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Re: Do I take the separation package offer?

Post by Igglesman »

Take the offer and come back as a highly paid independent consultant 8 weeks later.
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prudent
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Re: Do I take the separation package offer?

Post by prudent »

52 weeks of work vs. 46 weeks (38 weeks in offer + 2 months sabbatical) paid not-working, and money is not an issue? I couldn't say yes to that offer fast enough.
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Re: Do I take the separation package offer?

Post by jon-nyc »

If you don't say yes to this I'm going to disguise myself as you, go into your boss' office, and say yes for you.
Jim85
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Re: Do I take the separation package offer?

Post by Jim85 »

I don't understand why this is even a question.
cherijoh
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Re: Do I take the separation package offer?

Post by cherijoh »

You should definitely take the offer. Have you considered that after a reduction in work force, there will still be the same amount of work just fewer people to do it? Do you really want that amount of stress in your final year? After this happens, the work environment that you knew and enjoyed will no longer exist.

I took a voluntary separation package 10 years ago when my employer was relocating headquarters out of state. I was too young to retire, but had a large enough financial cushion that I didn't "have to" make the move. Many of my older teammates took early retirement even though several had the intention of working several more years. I am still in touch with them and I can tell you none of them regretted taking the package. On the other hand, a fair number of the people who did move had left the company within 1 or 2 years.

Offering to consult for the company is a good one. I would also suggest looking into volunteer opportunities in your area. It sounds to me like your main hesitation in taking the package is around not wanting to be "put out to pasture" prematurely. Volunteering can be very rewarding and will help you form a new network of friends.
enc0re
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Re: Do I take the separation package offer?

Post by enc0re »

Ask if you can take cash instead of the COBRA offer.
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Re: Do I take the separation package offer?

Post by tibbitts »

ClevrChico wrote:It sounds like a nice offer to me!

Do companies offer such packages out of moral obligation? With employment at will, couldn't they terminate anyone for a $0 package?
Offers like this are becoming less common, and packages are becoming less generous. Which is another why the OP needs to jump at this. While it might have not been mentioned in the notice, it's possible that the offer could be withdrawn if too many people accept. Normally the offer is extended with an expectation of a certain percentage of positive replies, but sometimes the expectation is off, one way or the other. Future offers, if any, are likely to be less generous. Usually the first offer is the best.
Dandy
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Re: Do I take the separation package offer?

Post by Dandy »

I was almost in the exact situation several years ago. I planned to retire at 62 and was offered a nice package at just past 60. The other key factor is I really didn't have a choice! But if I did I would have taken it.

You are almost being paid until your target retirement age, but don't have to actually work to get it. That's really nice. You have enough financial assets and health coverage. That's really nice. There are changes at work that probably won't make for a fun work environment - avoiding that bad "after taste" is really a nice thing. After I left the workplace was horrible - people under a lot of stress and then within a year they almost all lost their jobs as the functions were outsourced. I would have been a bad year to be there.

Almost everyone I know that had reasonable retirement assets has not regretted the decision to retire. Many of us are thankful for the chance to relax, enjoy life help aging parents or young grandchildren -- and not getting up at 5:30 to shovel the driveway to get to work!! This has been an awful winter - but I was so glad I didn't have to face the snow or cold until I felt like it - sometime in late morning after a nice breakfast. :happy
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Re: Do I take the separation package offer?

Post by flyingbison »

tibbitts wrote: Offers like this are becoming less common, and packages are becoming less generous. Which is another why the OP needs to jump at this. While it might have not been mentioned in the notice, it's possible that the offer could be withdrawn if too many people accept. Normally the offer is extended with an expectation of a certain percentage of positive replies, but sometimes the expectation is off, one way or the other. Future offers, if any, are likely to be less generous. Usually the first offer is the best.
Absolutely. Right now they are trying to reduce headcount by asking for volunteers. If they don't get enough reduction that way, they will start implementing cuts without incentives.
vital15
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Re: Do I take the separation package offer?

Post by vital15 »

As others have pointed out (but to put a different spin on it) if you don't take it you would be working all year for just 6 weeks of pay. (52 minus 46)
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Re: Do I take the separation package offer?

Post by stingray5688 »

vital15 wrote:As others have pointed out (but to put a different spin on it) if you don't take it you would be working all year for just 6 weeks of pay. (52 minus 46)
i think there's a very specific phrase that comes to most of our minds when reading this :twisted: :mrgreen:
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Re: Do I take the separation package offer?

Post by Chadnudj »

GerryL wrote: My boss told me -- before the offer was made -- that she had no wish to see me leave before my planned retirement. And the team is starting to take action on a project I recommended. I enjoy the ability to continue contributing at a high level, but as I told the team "How you implement is up to you because you will have to live with it ... I won't." So I enjoy having an opportunity to leave a mark, but I don't need that to enjoy life. And the numbers are looking good.
If they like you that much, take the severance, but mention that you'd be HAPPY to come back and consult as an independent contractor on this project (and maybe even draw up formal conditions that you'd be willing to meet for such a project). That way, you could have your cake (getting the sweet severance package) and eat it too (getting paid on top of that severance package for your "consulting" on the project).
kcb203
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Re: Do I take the separation package offer?

Post by kcb203 »

If you earn $100K/year, you earn about $48/hour for a 40-hour workweek for 52 weeks (ignoring vacation and holidays). If you don't take the offer, you'll be working a full year for 6/52 of your salary, which is equivalent to $5.54/hour. That makes it a no-brainer for me.
leonard
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Re: Do I take the separation package offer?

Post by leonard »

You should counter the offer on the points you would like - the COBRA - maybe even the number of months.

At the same time - research either setting up your own consultancy or working through another consulting agency.

So, you could counter the offer and at the same time offer to come back as a consultant to work on the high impact project. Coincidentally, at an obscenely high pay rate.

So, you could use the buy out and the project as negotiating leverage - so that you could get a higher buy out and be hired at a high rate of compensation as a consultant for the project. That's if you really are critical to the success of the project. The company will have high incentive to meet both your buy out counter offer and your high paid consultancy.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
psychoslowmatic
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Re: Do I take the separation package offer?

Post by psychoslowmatic »

Working a year for 6 week's pay is crazy, take the offer. If it makes you feel better, you can offer to go to bat to your boss' boss that because you're a highly paid, trained, and experienced employee you should count as 2-3 employees so less people get laid off. Also like others have said offer to consult, sounds like easy money and you'll be helping your coworkers out. Congratulations on your 46 week vacation offer!
freebeer
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Re: Do I take the separation package offer?

Post by freebeer »

What is not clear is what are the expected alternative benefits if you stay until your planned retirement date a year from now. If the answer is "nothing" then I agree with the other responses - take it! But if there are other benefits that would accrue if you stayed another year, such as for example extra vesting of pension benefits, or some other form of salary continuance after scheduled retirement, or whatever, then the decision becomes more nuanced.

Regarding negotiating for more, as some have suggested, this is unlikely to work given that it's a blanket offer being made to many individuals. But, you might ask for an explicit payout of the cost of COBRA coverage and could argue that *not* offering a payout option biases the offer in favor of younger people (not on medicare) and/or higher salary people (ditto) so could be considered discriminatory. Avoiding any whiff of age discrimination is a high priority in these situations so that might get you a little extra if COBRA payout wasn't already on the table.
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Re: Do I take the separation package offer?

Post by leonard »

freebeer wrote:Regarding negotiating for more, as some have suggested, this is unlikely to work given that it's a blanket offer being made to many individuals.
People negotiate separation agreements all the time. Plus, the OP has additional negotiating leverage if becoming a contractor on the project is an option. I doubt the company would rescind the offer because of a counter offer - so OP has little to lose countering.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
jojay
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Re: Do I take the separation package offer?

Post by jojay »

Go, go, go.
It's funny how we have a plan and then when we have an opportunity to enact that plan a different way, we challenge the original plan. Your plan was to go happily in another year. If you figure that you have 20 years of life left, they just gave you 5% of the rest of your life.

If you were offered another year of life, essentially paid for, would you take it?
Go, Go, Go. Enjoy.
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GerryL
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Re: Do I take the separation package offer?

Post by GerryL »

jojay wrote:Go, go, go.
It's funny how we have a plan and then when we have an opportunity to enact that plan a different way, we challenge the original plan. Your plan was to go happily in another year. If you figure that you have 20 years of life left, they just gave you 5% of the rest of your life.

If you were offered another year of life, essentially paid for, would you take it?
Go, Go, Go. Enjoy.

Thanks everyone for all the view points and insights. I especially like jojay's way of putting it (above). That and vital15's math "working all year for 6 weeks of pay." Oh, and the knowledge that the environment will get much tougher with fewer staff and growing demands for our services.

After sleeping on it (and reading your comments) I have come to the conclusion that it is pretty much a no brainer, but I'm not making an official decision until it's time. No possibility of getting cash or anything else for the Cobra. Already got that answer. Nothing is negotiable except the actual termination date -- and only within narrow parameters. I will be losing some RSUs (under $10k) I could expect to be awarded next spring (with accelerated vesting to cover all of them) and a little extra cash, but everything else pencils out nicely for my needs.

I have been planning on May 2015 for a long time and anticipated a long, gentle glide path after my sabbatical. Getting this thrown at me knocked me off kilter and made me feel I was no longer in control, but "5% of the rest of your life" helps put it in perspective -- although I actually "plan" to live 30 more years :happy . I have plenty I want to do with all my new time: volunteer (a lot), travel (some), lounge around (a little). I'm psyched.

Thanks all.
SimonJester
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Re: Do I take the separation package offer?

Post by SimonJester »

Just to add to what others have said, make sure you have a plan on how you will spend your retirement days. Keep yourself active with something, inactivity can lead to an early demise.

I would take the offer, then apply for unemployment unless you are FRA for SS. Seen too many co workers pass a year or two before retirement lately so that is clouding my judgment. I have 17 years before early retirement and I am already counting the days, 6,226 left to go... :(
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
freddie
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Re: Do I take the separation package offer?

Post by freddie »

The counter point is that you need to pay for a 5% longer retirement with slightly less money than you planned on. Not a huge deal unless you cutting things really tight. You still have to take the deal because it is a lot better than getting a worse deal in 3 months....

jojay wrote:Go, go, go.
It's funny how we have a plan and then when we have an opportunity to enact that plan a different way, we challenge the original plan. Your plan was to go happily in another year. If you figure that you have 20 years of life left, they just gave you 5% of the rest of your life.

If you were offered another year of life, essentially paid for, would you take it?
Go, Go, Go. Enjoy.
cherijoh
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Re: Do I take the separation package offer?

Post by cherijoh »

freddie wrote:The counter point is that you need to pay for a 5% longer retirement with slightly less money than you planned on. Not a huge deal unless you cutting things really tight. You still have to take the deal because it is a lot better than getting a worse deal in 3 months....

jojay wrote:Go, go, go.
It's funny how we have a plan and then when we have an opportunity to enact that plan a different way, we challenge the original plan. Your plan was to go happily in another year. If you figure that you have 20 years of life left, they just gave you 5% of the rest of your life.

If you were offered another year of life, essentially paid for, would you take it?
Go, Go, Go. Enjoy.
No, his company is subsidizing the majority of the cost the OP would have paid.
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midareff
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Re: Do I take the separation package offer?

Post by midareff »

Take the money honey, the party is OVER, the fat lady has sung. Welcome to the promised land.
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stickman731
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Re: Do I take the separation package offer?

Post by stickman731 »

I posted similarly 2 months ago ( http://www.bogleheads.org/forum/viewtop ... 2&t=133050).

I decided to take the package and pursue the next chapter in my life. I negotiated my last day as Dec. 31 with the severance being paid in 2015 to minimize the tax burden.

I only have 157 workdays left and as each day passes I know I made the right decision based on the restructuring of the organization.

My only plan is to have a beer in my hand in the front row of the next year Yankee first pre-season game in Tampa ;)
Last edited by stickman731 on Wed Apr 09, 2014 7:16 pm, edited 1 time in total.
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stickman731
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Re: Do I take the separation package offer?

Post by stickman731 »

rickmerrill wrote:I can answer that one, no unemployment - this is a voluntary offer.

I got a better offer, but at a younger age (2 years pay and 25k towards health care). Unlike you I was born to retire. I had 6 months to decide so no rush judgement. If you fell like staying good for you, if not also good for you. I wouldn't let being rushed into retirement by a little bit bother me much if you are already financially prepared but if you need a little more time to finish so be it.

This depends on the state you live in. For me NJ, you get employment under certain situations.
Q. Should I wait until my severance pay ends to file a claim? (http://lwd.dol.state.nj.us/labor/ui/content/faq.html)
A. No, because some severance/separation payments do not extend employment. You should file your claim after you stop working full-time. Payments that do not extend employment include severance payments based on years of service with an employer. However, salary continuation through termination and payments in Lieu of Notice, do extend employment. When you file your claim by telephone, the agent will review all separation payments with you before the claim filing process is completed. If you file your claim via the Internet, and it appears that your payment for periods after your last date of work may affect your unemployment benefits, you will be scheduled for an interview with a claims examiner.
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Re: Do I take the separation package offer?

Post by DavidC »

stickman731 wrote:
rickmerrill wrote:
BHCadet wrote:Can you take unemployment benefits too?
I can answer that one, no unemployment - this is a voluntary offer.
This depends on the state you live in. For me NJ, you get employment under certain situations.
Texas also typically sees a "voluntary" layoff as an "involuntary work separation" and therefore normally eligible for unemployment benefits... I know several years ago my employer actually emphasized that fact (obviously it didn't entice me to take their offer ;-) ).
Texas Workforce Commission wrote:Involuntary Work Separations

A work separation is involuntary if initiated by the employer. An employer initiates a work separation by taking some kind of action that makes it clear to the employee that continued employment will not be an option past a certain date. In such a situation, the employer has more control than the employee over the fact and the timing of leaving the work. There are many ways in which a work separation can be involuntary:
...
6. "Mutual agreement" - in most cases, this form of work separation is viewed as involuntary, since it is usually initiated or encouraged by the employer.
In true boglehead fashion my chief concern is saving enough to withstand 7 consecutive biblical plagues. - TheNightsToCome
basspond
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Re: Do I take the separation package offer?

Post by basspond »

Glad to hear you chose the severance.

This has nothing to do with money or you as a valued employee of your company. If you would have stayed on there could have been resentment from co-workers why you stayed on while younger employees were let go.
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Re: Do I take the separation package offer?

Post by leonard »

btw - regarding unemployment - you can get it written in to the agreement that the employer "will not contest the application for unemployment benefits". Essentially, insuring in writing that you should be able to successfully apply for unemployment.
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Re: Do I take the separation package offer?

Post by freebeer »

leonard wrote:btw - regarding unemployment - you can get it written in to the agreement that the employer "will not contest the application for unemployment benefits". Essentially, insuring in writing that you should be able to successfully apply for unemployment.
It's worth asking, but OP already said nothing is negotiable besides the date. This is not a free option for the employer as increase in unemployment claims = increase in premiums. If it is a voluntary separation part of the calculation on employer's side may be that it won't generate unemployment claims.
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archbish99
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Re: Do I take the separation package offer?

Post by archbish99 »

I was also under the impression that any amounts you're paid as severance push out when you can start unemployment, so the OP would be 46 weeks retired before becoming eligible.

But no, I agree with unanimous (how often does that happen on Bogleheads?) opinion -- take the money and go celebrate. Consult if that's an option, and max out your Solo 401k. :-)
I'm not a financial advisor, I just play one on the Internet.
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GerryL
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Re: Do I take the separation package offer?

Post by GerryL »

Update:
I signed up to take the separation package. It's not a sealed deal until sometime next week -- and I can change my mind up through the weekend, but I don't anticipate that happening. Bottom line: I have less than 4 weeks left to work before my sabbatical starts (still lots I need to get done). I'll return to the office after the 4th of July and officially retire.

My financial goal is to not have income in 2015 so I can get a chunk of my TrIRA converted to my Roth. My cash account and the pay package will easily take care of me for a year or two before I start up the annuities. SS will come a little later.

Unemployment? Nope. Don't need it and don't even want to go through the motions of looking for work. Too much else to do. Consulting? I will consider it for a while if it would help my old team adjust to their new reality and they ask me, but only on my own terms.

Thanks for all the feedback.
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