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Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 1:26 pm
by multiham
I always try to take emotions out of my decisions, but having difficult time right now.

Situation
My position was eliminated with the latest downsizing at the Megacorp I work for.
Have worked at same company for 25+ years
Last day is December 31
Age 52
Company has for the most part treated me right over the years and while you get upset when this happens to you, they do offer a great package to make it much less painful

Offering a severance package of 2 weeks pay for every year employed AND full Medical Benefits including Vision/Dental at the rate I currently pay for the next 52 weeks. They then have a Medical plan (No Vision/Dental) that I can buy for my whole family for less than $650 per month. This is their rate plus a 2% uncharge. I can continue to buy this until I hit 65.

The severance package pays out bi-weekly so I would not be able to collect unemployment until my severance is up

Financial

Married with 2 children that will go to college. One starting in 2019 and one in 2022. Have about 50% of their education paid for in 529 plans.
Wife makes about $12,000 per year part time
28% Tax Bracket and 3.1% State
6 month emergency fund
Only debt is $200K on house at 3.375%.
My current 401K balance is $1.5 million (65% Equity, 35% Fixed Income) - The company I work for uses advisors that I can't provide fund symbols for.
I have almost $200,000 of post tax contributions in the 401K that I can tap at anytime without tax or penalty.
Vested pension (No Cola) which would pay me $4,050 per month if I take at age 55, and $6,200 per month if I wait until age 65. Can also take it anytime between 55 and 65. Each year I work equates to about $2,600 per year in increased pension.
I have $800,000 in taxable investments at a 60/40 ratio
When you add it all up (not including equity in house or value of 529 plans), I have about $2.15 million net of the mortgage on my house.
I estimate that I would need to spend about $110,000 per year for the next 2 years, then down to $100,000 for the next 3 years and then down to $80,000 after that.

I have 3 scenarios that I would like thoughts on:

Scenario 1 - Find another job
The job I had was very stressful. I am thinking about getting a way less stressful job with another company. Hoping to make around $60K. Since the job will be with a different company, I will collect my severance pay until December 2018. I will then buy into my old companies medical plan at about $650 per month until I hit 65.
No worries in 2018. I have insurance and any salary I make is like double dipping as I have severance package for full year.
I like this idea as I can take the time to improve my health (lose weight), spend more time with family before kids go to college and truly enjoy life. I can volunteer, help others, and do so many little things I have not been able to do.

Scenario 2 - "Retire"
Just look for part time jobs to keep me busy until my kids go to college. Would look to cover property taxes and mortgage (about $30,000 total per year)
Same benefits as above scenario except even more time with my family.

Scenario 3 - Accept lower job at current company
May be able to get another job at current company. Would need to take about a 15% pay reduction.
Would continue to build up pension plan and can continue to make 401K contributions which the company matches.
Medical/Dental/Vision benefits would cost me about $3,500 per year.
Once I hit 55, I qualify to purchase benefits from my company at same rate as employees until I hit 65. They then provide the gap coverage


I know Scenario 3 is the "Smartest Scenario" in terms of financials. Looking for opinions.

Thank you!

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 1:53 pm
by Olemiss540
Assuming you would still get severance package with option 3, I would say that is a no-brainer if not to give you additional funding while looking for the perfect part time gig.

With your pension and nest egg plus social security, I would be VERY tempted to retire and enjoy the last few years of the kiddos before they launch. You seem to have an extremely good situation with multiple income sources upcoming!
Congrats on the generous severance and retirement healthcare. Nothing to be mad about given your personal circumstance! May end up being a wonderful blessing....

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 1:57 pm
by dm200
Certainly do not know, but my guess is that you and Megacorp cannot or will not make Option 3 "work".

At your age, it seems that find another job might make the most sense.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:09 pm
by KlangFool
multiham wrote:
Sun Nov 26, 2017 1:26 pm

Age 52

Scenario 3 - Accept lower job at current company
May be able to get another job at current company. Would need to take about a 15% pay reduction.
Would continue to build up pension plan and can continue to make 401K contributions which the company matches.
Medical/Dental/Vision benefits would cost me about $3,500 per year.
Once I hit 55, I qualify to purchase benefits from my company at same rate as employees until I hit 65. They then provide the gap coverage


I know Scenario 3 is the "Smartest Scenario" in terms of financials. Looking for opinions.

Thank you!
multiham,

1) What if you go with scenario 3 but you are laid off in one year without severance pay and medical coverage until 65? You know the deal that you can get now. But, you do not know what you will get later. And, you lose 1 year worth of severance pay.

2) IMHO, it is extremely risky to go with scenario 3. My gut feeling tells me that it will not work out for you.

KlangFool

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:10 pm
by KlangFool
Olemiss540 wrote:
Sun Nov 26, 2017 1:53 pm
Assuming you would still get severance package with option 3,
I would say that is a no-brainer if not to give you additional funding while looking for the perfect part time gig.

With your pension and nest egg plus social security, I would be VERY tempted to retire and enjoy the last few years of the kiddos before they launch. You seem to have an extremely good situation with multiple income sources upcoming!
Congrats on the generous severance and retirement healthcare. Nothing to be mad about given your personal circumstance! May end up being a wonderful blessing....
Olemiss540,

OP was not laid off with option 3. So, I do not think he will get the severance pay.

KlangFool

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:11 pm
by IngognitoUSA
Option #4. They bring you back as consultant, seen it happen all the time.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:14 pm
by mouses
If you take option #3, I suspect you will lose your severance package. If so, I would not touch option 3 with a ten foot pole. Severance packages almost invariably decrease substantially as layoffs continue.

Look carefully at the unemployment benefits situation. When MegaCorp let me go in California, even though it paid out severance bit by bit, those of us laid off were able to get unemployment payments, as odd as it sounds.

I would go with option 1 or 2, figuring out as you go along which you prefer.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:16 pm
by KlangFool
multiham wrote:
Sun Nov 26, 2017 1:26 pm

I have 3 scenarios that I would like thoughts on:

Scenario 1 - Find another job
The job I had was very stressful. I am thinking about getting a way less stressful job with another company. Hoping to make around $60K.
multiham,

1) It is my experience that it does not work this way. You can get a less stressful full-time job at 120K to 150K, But, not at 60K.

2) At 50+, it is unlikely that you will get a 60K full-time job. But, you will have job opportunity at 120K to 150K.

KlangFool

Door #1

Posted: Sun Nov 26, 2017 2:27 pm
by FraggleRock
Option 1
Ages 52-64.9: Your $60K + wife's $12K + $38K from your taxable fund.
Age 65: Your pension of $72K + your SS of $25K + wife's SS of $10K = $105K/yr
And, your IRA will be worth about $3M so at age 70 your income will be $200K/yr thanks to RMD.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:29 pm
by dm200
IngognitoUSA wrote:
Sun Nov 26, 2017 2:11 pm
Option #4. They bring you back as consultant, seen it happen all the time.
Yes - that is a not uncommon practice.

Keep in mind as well that such US corporations have really cut back or terminated many retirement benefits, such as health/medical insurance. This includes some of the large private employers that once had the "best of the best" such benefits. Who knows what the age premium multiplier will be in the next 13 years, but it is now capped (Obamacare) at 3 times younger enrollees -- BUT the pressure is building that it may return to the previous much higher age multiplier.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:43 pm
by Mlm
I like option #2 which gives you a great severance, unemployment and allows you to keep your options open in the future. Less stress now and more family time. Your savings are great but who knows what the market holds in the future.

You can work part time and if you don't like it make another change.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 2:48 pm
by WildBill
Howdy

One thing I would consider is getting the post tax contributions in your 401 -K transferred into a Roth.

My choice in your position would be to avoid 3, as it puts your severance package at risk.

Other choices up to you. You can always change your mind later and do something different.

W B

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 3:00 pm
by diy60
I worked for a MegaCorp and had fears of being laid off in my early 50's especially during the Great Recession. Thankfully I was never RIF'd in my career, but had decided if I was impacted I would look for another position within the MegaCorp. I felt this would have been best for No. 1 (me).

As a side note, in order to get a severance package you will likely need to sign heavily one-sided documents in which you agree to notify the MegaCorp if you gain employment so they could stop the severance pay and benefits, and you agree to not collect unemployment. This is because technically your are still on the payroll during severance.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 3:07 pm
by delamer
Have you discussed with your wife the option of her increasing her hours at her current job or finding one with more hours? Even enough more to cover the health insurance premium would be very useful.

Seems that you could pick up more of the home responsibilities, given your layoff.

Option #3 would make me nervous, as others have said. The consultant option gives you more control.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 3:17 pm
by multiham
KlangFool wrote:
Sun Nov 26, 2017 2:10 pm
Olemiss540 wrote:
Sun Nov 26, 2017 1:53 pm
Assuming you would still get severance package with option 3,
I would say that is a no-brainer if not to give you additional funding while looking for the perfect part time gig.

With your pension and nest egg plus social security, I would be VERY tempted to retire and enjoy the last few years of the kiddos before they launch. You seem to have an extremely good situation with multiple income sources upcoming!
Congrats on the generous severance and retirement healthcare. Nothing to be mad about given your personal circumstance! May end up being a wonderful blessing....
Olemiss540,

OP was not laid off with option 3. So, I do not think he will get the severance pay.

KlangFool

Klangfool and Others -

Thank you all for the quick responses. As I stated in my opening line, I am usually able to take emotion out to the decision, but I have been extremely lucky/blessed that in my 30 years of total work, I have never had this happen before.


I'll do my best to address the other questions/comments.

Klangfool is absolutely correct. If I go with option 3 (different job, less pay, at same company), my severance goes away. That is a lot of $ to walk away from when I could go elsewhere and double dip in 2018 (Get severance plus salary at another company).

We have been going through these almost every year and the company has been offering the same severance package. As you read often, the past is not always a great indicator of what could happen in the future so just because they have offered the same package over the years, there is no guarantee that will occur going forward.

If I accept the severance, I can't consult with them for 18 months so that makes that option a little difficult.

I did a horrible job defining what a less stressful job would be. I mean a job that doesn't require me to spend 40 to 60% of my work time on overnight or multi night business trips. It means that I am not expected to return calls or e-mails at 9PM at night or over the weekend.

There is a large part of me who takes great pride in working for this company and wants to be able to go out on my own terms. I understand how foolish that sounds, but that is what has put option 3 on the table.

I am SO lucky to be in a position where this did not/won't devastate me or my family. Many of my younger co-workers are not as lucky. I think about them everyday.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 3:57 pm
by ClevrChico
If the severance is conditional, you may still be able to claim unemployment. (It technically may not be severance at that point.) That's something you may want to check into.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 3:58 pm
by KlangFool
multiham wrote:
Sun Nov 26, 2017 3:17 pm

I did a horrible job defining what a less stressful job would be. I mean a job that doesn't require me to spend 40 to 60% of my work time on overnight or multi night business trips. It means that I am not expected to return calls or e-mails at 9PM at night or over the weekend.
multiham,

I had worked 10+ jobs over 20+ years with multiple employers. I had been unemployed for more than 1 year a few times. I am in my current job for less than 2 years. So, I am pretty up-to-date on the real employment world.

It is my observation that you will not find those jobs at 60K annual salary. But, you may find those opportunities at 120K to 150K. I had tried the same route before. This was what I found out.

At your age and experience level, only an employer that appreciates your expertise will hire you. And, if they do want you, compensation will not be an issue. But, those jobs will be higher pay level.

For example, I interviewed and could not get contract offer at $40 per hour level. But, I had the unsolicited contract offers at $65 and $100 per hour. I worked on those contracts until my recent job.

KlangFool

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 4:02 pm
by KlangFool
multiham wrote:
Sun Nov 26, 2017 3:17 pm

If I accept the severance, I can't consult with them for 18 months so that makes that option a little difficult.
multiham,

A) If the employer is desperate enough, they could bend the rule. And, they know that there is no incentive for you to work for them while collecting severance pay. It will have to be a very good deal for you.

B) I had seen folks work around this rule before. Instead of working for the employer, they work for the vendor that worked with the employer.

KlangFool

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 4:32 pm
by dm200
ClevrChico wrote:
Sun Nov 26, 2017 3:57 pm
If the severance is conditional, you may still be able to claim unemployment. (It technically may not be severance at that point.) That's something you may want to check into.
It may also depend on applicable state laws/regulations - I believe where the business you work is located.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 4:47 pm
by chessknt
Including your home you have approx 4m in assets and an incredible pension around the corner. You can do anything you want and if it were me I'd go with option 2. Find some part time work possibly in a different field you've been interested and enjoy life. If you find yourself wanting to work more after a year or so of this then give option 1 a try.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 4:49 pm
by nedsaid
It is a bummer, but that is life. I had a similar experience back in 2014, getting laid off from a job and a company that I really loved.

I would discourage you from Option 3, taking a job at your current employer with a 15% pay cut. In my mind, with the lay-off notice they cut ties and I would just move on. The unwritten contract has been broken. The thing is, you get take a job and get laid off again with a smaller severance package or maybe no severance package. There is sort of an entropy with big organizations, things tend to go from employee friendly to less employee friendly. Even nice companies can turn evil if they face a crunch. You look out for you and let them look out for them. Take your severance and run.

It is sad, but when you get into your fifties, you are a big, fat target for lay-off. They want to trade you in for a newer and hopefully cheaper model. Loyalty is a pretty scarce commodity nowadays. That is just the world we live in today. Fortunately, you have lots of savings.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 6:04 pm
by simas
"The severance package pays out bi-weekly so I would not be able to collect unemployment until my severance is up"

Are you sure about this? Are you in notification period (or pre-notification) ? What is the date of the actual layoff?

If you got laid off, you get to collect unemployment, regardless of what they continue to pay you or whether they pay at once or over time.
If you are notified but still on the books (notification period which company can make as long as they want), you are still technically employee and you do not colllect.

Check this, do not assume you do not qualify for employment...

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 6:05 pm
by WalterMitty
#3

Here's why....

A). It sort of covers the "go get another job" option as well. Except with this other job, you get the benefit of the devil that you know. As you've said, you're proud to work for this company, you will know all the lingo and will probably still know all/a lot of folks there. It would be different if you hated who you worked for and what you did, but that doesn't seem like that's the case.

B). I was in the same boat about 4 years ago....my offer was take severance or a demotion. The demotion was a lower title and benefits (bonus and equity) but they kept the base pay the same. I stayed, and it worked out. I too like who I'm working for and with.

C). If you take #3 and it's not to your liking you can always keep looking for a new gig.

D). I never recommend making a decision because of severence. I'm not working for severance. Seems like a very short term money grab. To me the only way severance would be saught would be if I wanted to quit anyway.

Best of luck either way.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 6:56 pm
by mouses
diy60 wrote:
Sun Nov 26, 2017 3:00 pm
As a side note, in order to get a severance package you will likely need to sign heavily one-sided documents in which you agree to notify the MegaCorp if you gain employment so they could stop the severance pay and benefits, and you agree to not collect unemployment. This is because technically your are still on the payroll during severance.
This is exactly the opposite of my experience. OP, please do not assume the above is true without checking out your severance documents and checking with the unemployment office.

I have actually forgotten how often I was laid off in the dot com bust, at least three times. In no case was my severance affected by getting other employment in the severance period and in all cases I also got unemployment benefits until I got another job.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 7:22 pm
by testing321
multiham wrote:
Sun Nov 26, 2017 1:26 pm
The severance package pays out bi-weekly so I would not be able to collect unemployment until my severance is up
I was laid off 15 years ago, and at that time was told that the severance wasn't ordinary pay, so that we were able to take unemployment as well. The unemployment wasn't much. I was told that the severance was to settle any potential and future claims against the company.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 7:32 pm
by dm200
mouses wrote:
Sun Nov 26, 2017 6:56 pm
diy60 wrote:
Sun Nov 26, 2017 3:00 pm
As a side note, in order to get a severance package you will likely need to sign heavily one-sided documents in which you agree to notify the MegaCorp if you gain employment so they could stop the severance pay and benefits, and you agree to not collect unemployment. This is because technically your are still on the payroll during severance.
This is exactly the opposite of my experience. OP, please do not assume the above is true without checking out your severance documents and checking with the unemployment office.
I have actually forgotten how often I was laid off in the dot com bust, at least three times. In no case was my severance affected by getting other employment in the severance period and in all cases I also got unemployment benefits until I got another job.
Decades ago, I had two instances of layoff and severance. In one case collected unemployment - no probllem - and in the other case - got a new job fairly quickly. There were no tricks or problems in either case.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 7:42 pm
by Watty
I agree that taking option 3 is a non-starter for now. In a year and a day when the severance ends then you could accept a job with that company if you still need one then. I would also be real cautious with that about how it might affect your pension calculation, some pensions are calculated based as a percentage of your final few years salary so accepting a lower paying job might cut your pension.

The way the severance pay vs unemployment works will vary by state so you will need to research that for your state. Most likely the HR department will tell you but you you should verify what they say.

multiham wrote:
Sun Nov 26, 2017 1:26 pm
Only debt is $200K on house at 3.375%.
...
I have almost $200,000 of post tax contributions in the 401K that I can tap at anytime without tax or penalty.
...
I have $800,000 in taxable investments at a 60/40 ratio
.....
I estimate that I would need to spend about $110,000 per year for the next 2 years, then down to $100,000 for the next 3 years and then down to $80,000 after that.
Paying off the mortgage would be a good option to consider. I would rerun your numbers as if the mortgage was paid off. With a paid off mortgage, your pension once your start that, and your wife's income that might leave a very small income gap that you would have to fill with a job or your investments. Just the dividends from the taxable investments might even be enough to fill that gap once you start the pension.

You and your wife will also get Social Security someday so be sure to take that into account in your long term plans. Your Social Security benifit is calculated on your higheest 35 years of earnings. If you don't have 35 years of Social Security earnings history then working in a part time "fun" job can make a difference in what your Social Security check will be.
multiham wrote:
Sun Nov 26, 2017 1:26 pm
I will then buy into my old companies medical plan at about $650 per month until I hit 65.
A couple of things to check in on this;

1) The amount will likely change each year to match what it is costing their current employees so be prepared for that.

2) If your wife is younger than you then find out if she and any kids that are still getting that insruance can still get that after you turn 65.

3) If you get another job that provides insurance and you drop the old companies insurance then you will likely not be able to get back into the old plan if you leave the new job. Find out how that works. That may favor not getting another full time job with benifits so contracting or working part time might be the best option if you don't retire.
multiham wrote:
Sun Nov 26, 2017 1:26 pm
My current 401K balance is $1.5 million (65% Equity, 35% Fixed Income) - The company I work for uses advisors that I can't provide fund symbols for.
There is a good chance that they have high fees. Rolling that money out to an IRA would allow you to get lower expenses. After the severance ends you could also then do Roth conversions each year up to the top of the 15% federal tax bracket.

If this was a voluntary buyout package instead of an involuntary layoff then it would still be a real tempting package to take. If you are feeling bad about being laid then consider that you might have taken the buyout if you had the choice.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 7:58 pm
by diy60
dm200 wrote:
Sun Nov 26, 2017 7:32 pm
mouses wrote:
Sun Nov 26, 2017 6:56 pm
diy60 wrote:
Sun Nov 26, 2017 3:00 pm
As a side note, in order to get a severance package you will likely need to sign heavily one-sided documents in which you agree to notify the MegaCorp if you gain employment so they could stop the severance pay and benefits, and you agree to not collect unemployment. This is because technically your are still on the payroll during severance.
This is exactly the opposite of my experience. OP, please do not assume the above is true without checking out your severance documents and checking with the unemployment office.
I have actually forgotten how often I was laid off in the dot com bust, at least three times. In no case was my severance affected by getting other employment in the severance period and in all cases I also got unemployment benefits until I got another job.
Decades ago, I had two instances of layoff and severance. In one case collected unemployment - no probllem - and in the other case - got a new job fairly quickly. There were no tricks or problems in either case.
Fair push back, I was giving perspective from my MegaCorp employer. They were very clear about the conditions around receiving severance. Violation of those signed agreements could have resulted in legal action against the former employee including potential loss of any unvested options or RSUs. Definitely agree OP should read the docs thoroughly before signing.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 8:02 pm
by dm200
Fair push back, I was giving perspective from my MegaCorp employer. They were very clear about the conditions around receiving severance. Violation of those signed agreements could have resulted in legal action against the former employee including potential loss of any unvested options or RSUs. Definitely agree OP should read the docs thoroughly before signing.
Absolutely.. Such agreements and documents are drafted by the employer and for the primary benefit of the employer. By giving severance and other benefits, the employer gets the terms of the agreement. One thing to watch for is any restriction on working for a "competitor".

I cannot recall the details, but I am sure both situations I encountered required me to sign similar agreements.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 8:04 pm
by 10YearPlan
I also think Option 4 (Consulting) is an appealing option. I would take some time (3-6 mos) to take a breather, spend time with family and work on your fitness goals, etc. If you're bored in 3-6 months, go look for another job. If you find a decent one, take it. If, once the 18 month window has opened, you are still interested in consulting with your former employer, explore that option. If it is better than being retired or whatever else you're doing, then go for it. If you get lucky, they might offer you something interesting and flexible/part time.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 8:13 pm
by simas
I faced similar choice to yours about 2 years ago when my former manager left and new team was brought in. I received an offer to 'park me' (keep the same base pay, change from management title to a non-management role and stay there doing nothing while they figure out what they want to do) which I eventually engineered into my own layoff by them to go on paper on why I can not continue in current position (i.e. because of desire to consolidate offices within US), and then working through corporate re-alignment program to be formally released.

I also had a lot of back and forth internally that "this is the evil I know", I have rank, expense account, plenty of pay, connections and pull to do nothing if I wanted to, benefits were great (sabattical, paid 4 weeks of vacation yearly), etc. Hard to walk away from familiarity and comfort . I also had multiple teams considering offers to keep me on the inside so complex conversations sequencing timing of departures, re-hires, pre-notification periods, legally required notification periods, actual layoff, etc.

At the same time I knew that environment turn toxic, people will turn on each other in their attempt to survive, new team will take no prisoners, and it would be a horrible high stress place to work.

In hindsight, if faced with this again, I would have made the cut cleaner and spend a lot less time in barganing phase of mourning.

there is life beyond megacorp and plenty of it..

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 8:31 pm
by multiham
dm200 wrote:
Sun Nov 26, 2017 8:02 pm
Fair push back, I was giving perspective from my MegaCorp employer. They were very clear about the conditions around receiving severance. Violation of those signed agreements could have resulted in legal action against the former employee including potential loss of any unvested options or RSUs. Definitely agree OP should read the docs thoroughly before signing.
Absolutely.. Such agreements and documents are drafted by the employer and for the primary benefit of the employer. By giving severance and other benefits, the employer gets the terms of the agreement. One thing to watch for is any restriction on working for a "competitor".

I cannot recall the details, but I am sure both situations I encountered required me to sign similar agreements.
You are absolutely correct on the above. I am investigating the competitive clause as that would really limit what I could do. I will also check on the unemployment but was told by the company that I could not receive both severance and unemployment at the same time. If they paid severance in one lump sum, that would be different.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 8:38 pm
by multiham
chessknt wrote:
Sun Nov 26, 2017 4:47 pm
Including your home you have approx 4m in assets and an incredible pension around the corner. You can do anything you want and if it were me I'd go with option 2. Find some part time work possibly in a different field you've been interested and enjoy life. If you find yourself wanting to work more after a year or so of this then give option 1 a try.
Sorry if I was not clear. My house is worth around $500,000 with a $200,000 mortgage on it. In assets (not including pension), I have $2.65 million. The $2.15 million number I showed was the value of all my assets (not including value of house or 529 plans) less the $200,000 mortgage. Thought the $2.15 million was a good number to work with as it is net of my debt.

Re: Let Go by MegaCorp - Lots of options

Posted: Sun Nov 26, 2017 9:54 pm
by GreenGrowTheDollars
Unemployment rules vary by state. It doesn't matter whether somebody else was able to collect unemployment while concurrently receiving severance, what matters is the rule in your state.

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 3:58 pm
by Dandy
The severance package pays out bi-weekly so I would not be able to collect unemployment until my severance is up
That is what I thought in 1999 in NJ. I explained my situation and showed them the termination package. They reviewed it and paid Unemployment. My package included 16 months of biweekly pay Plus a bonus. Make sure you visit and get your unemployment office to give you a ruling in person. Things may have changed since then or states may have different rules.

When I think of it why is a major lump sum ok but doling it out over many months not ok?

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 4:39 pm
by HomerJ
Offering a severance package of 2 weeks pay for every year employed AND full Medical Benefits including Vision/Dental at the rate I currently pay for the next 52 weeks. They then have a Medical plan (No Vision/Dental) that I can buy for my whole family for less than $650 per month. This is their rate plus a 2% uncharge. I can continue to buy this until I hit 65.
Take Option #3 off the table.

This severance package is extremely generous. Especially the health-care component.

Do not give that up. Don't take a lesser job at the same company. It's time for a fresh start. With that pension and SS, you're in great shape. You could easily retire today.

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 6:44 pm
by dm200
HomerJ wrote:
Mon Nov 27, 2017 4:39 pm
Offering a severance package of 2 weeks pay for every year employed AND full Medical Benefits including Vision/Dental at the rate I currently pay for the next 52 weeks. They then have a Medical plan (No Vision/Dental) that I can buy for my whole family for less than $650 per month. This is their rate plus a 2% uncharge. I can continue to buy this until I hit 65.
Take Option #3 off the table.
This severance package is extremely generous. Especially the health-care component.
Do not give that up. Don't take a lesser job at the same company. It's time for a fresh start. With that pension and SS, you're in great shape. You could easily retire today.
One thing that would concern me is the chance that the company could change their mind about keeping you on their medical plan. Who knows, though? If they follow through, this is amazingly good. I wonder if what you pay and will pay is (your) age based..

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 7:27 pm
by jabberwockOG
You deserve a break. You are in a great place financially. Take the layoff and severance package and take a few months off to take stock and assess where you are, what you want, and what you want to do going forward. If you are good at what you do opportunities will present themselves.

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 7:51 pm
by Capsu78
Have worked through 2 severance periods between my wife and myself. Looking back, even through all of the uncertainty and even some sadness/ sense of loss... both of these periods led to better outcomes. The only regrets were the wasted worrying about the transition!
1 Sounds like a fabulous severance package- and the longer you stretch it out, the longer those funds end up diverting a portion to 401K. In one case, it even allowed my wife to capture some unvested RSU's and a totally unexpected "profit share"... woke up with a "bluebird" bonus no one had discussed at any point.
2 You "have enough" to determine when you want to exit the game of musical chairs without having to wait until the music stops. I can only speak for ourselves, but being in our early 50's when transition occurred and "assuming ageism" seems to us to be a self fulfilling prophecy for a number of otherwise talented people we knew, at least for those who can't handle change. Talent, intuitiveness and positive attitude count just as much now as it did in any of our workforce decades IOHO.

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 8:10 pm
by 8foot7
I have no idea why some folks would have you, at 2.1 million net of debt, give up that severance which appears to be basically one year's worth of salary paid to you to do nothing. Spend a year warming up your network, enjoying life, seeing what it is you may have a passion to do in the future.

Re: Let Go by MegaCorp - Lots of options

Posted: Mon Nov 27, 2017 8:13 pm
by Muri
OP, It sounds like you work for JNJ. My vote is for you to take the severance and find other work elsewhere.