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Old 05-20-2016, 06:49 PM   #21
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If you were planning on 2 years after severance you are only talking about an 18 month difference. I would do some consulting or part-time work (if you want to) and see how it goes. It sounds like a great way to transition into retirement.

Make lemonade.
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Old 05-20-2016, 07:30 PM   #22
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Congrats to making it to age 55 while still working. The retiree medical is not the super-gold plan it was, but still very good, as you know. Sounds like you are taking the whole thing in stride. Why feel embarrassed? At this point you still fit the previous target group of high wage, high cost benefit package people. They probably couldn't believe they didn't get you sooner! All kidding aside, I hope you enjoy the new phase of life you are going to be starting. With 3.5 years to go to hit age 55 at the same company in IT, I am not holding my breath that I will make it at rate they keep cutting. I think if I do get one Relief will be my first thought.


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Old 05-20-2016, 08:53 PM   #23
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Congrats! My brother and I got laid off from the same company. I was before 55 so I was not able to take the sick leave in money. I found another job after that and so did my brother. So if you want to work, I'm sure there's work.
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My employer gave me my 60 day notice yesterday
Old 05-20-2016, 08:54 PM   #24
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My employer gave me my 60 day notice yesterday

Congrats, enjoy your trip, and remember no need to hurry back worrying about all the work piling up waiting for you. Sweet lemonade indeed!


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Old 05-20-2016, 09:32 PM   #25
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Remember, in the Magic Kingdom "have a magical day" apparently means "go **** yourself!" I think I would be telling my former employer to have a magical day and spend some time (3 to 6 months) deciding what you want to come next. That could be another job, some consulting work, contemplating your navel for a while, travel, or whatever.
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Old 05-21-2016, 08:38 AM   #26
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Originally Posted by supernova72 View Post
Somewhat anticipated but still internalizing what my next steps are. I work in an aerospace industry in an IT organization. Megacorp (160,000 employees).

IT is being reduced and after 30 yrs I got my notice yesterday. Planned on working two years. I get a 6 month severance pkg.

It feels weird since I've never been "laid off" before.

About me.

55 yrs old
single
750K in 401K
pension (non cola) at $3100 a month (can draw after my layout benefit ends in 6 months). I can also take a lump sum on the six months pay.
expenses are 60K a year
After final check July 22nd will owe 125K on home (valued at 535K). No other debt.

Feels weird but to be honest was pretty burned out. We've had 3+ yrs of reductions. My background is IT Finance and IT Service Delivery mgmt. I achieved a "level 5" status which is high in my field. I might pursue contract work. Seattle WA is a pretty hot market right now (where I live).

Two undergrad degrees and one masters (TMBA)

I get retiree medical at a reasonable rate ($70 a month).

Cheers.
Really nice "offer". You may qualify for unemployment benefits after the severance is paid out.

I had no pension or enough time in. Was a level 4 at a similar company.

I found that life improved, and was glad to be out of the megacorp malaise.

In my neck of the woods, the movement was to push services down to smaller companies. Hence, a smaller company found me, pays me level 5 salary, and I will ride the tiger for a year or two.

An IT manager from megamart just happened to hire on with my employer. Such a grin he had.
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Old 05-21-2016, 08:45 AM   #27
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If I remember correctly, I was able to go on unemployment and taking the severance pay in lump sum. I didn't buy into you get first priority hire back if you stretch it out to months.
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Old 05-21-2016, 11:56 AM   #28
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My megacorp overreacted to the 2008 economy and they retired everyone 55 and older in 3 waves. Best thing to happen to me, as with a new grandson I didn't have time to run all over the country for work.

We were able to get unemployment while the company paid full salary for another year. Then they paid us a supplement until age 62 when we could draw social security. We were allowed to purchase their top level healthcare with a retiree health savings account (like a 401K), and it lasted until 3 months shy of my getting on Medicare.

Live conservatively and you'll be okay. Seattle's a hot real estate market and you're sitting good with little owed on the house. You can always cash the house in and "head south" where the houses are cheap and life is simple.
OP here. Thanks for the feedback. After two days of the announcement it still feels a bit strange but friends and family have all been supportive. I plan to take the lump sum payout vs continued income stream given then I can "retire" in August 1st vs. wait until the income stream ends. That is a change from what I had original thought I'd do.
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Old 05-21-2016, 12:00 PM   #29
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Really nice "offer". You may qualify for unemployment benefits after the severance is paid out.

I had no pension or enough time in. Was a level 4 at a similar company.

I found that life improved, and was glad to be out of the megacorp malaise.

In my neck of the woods, the movement was to push services down to smaller companies. Hence, a smaller company found me, pays me level 5 salary, and I will ride the tiger for a year or two.

An IT manager from megamart just happened to hire on with my employer. Such a grin he had.
Yes, the UE part I still need to investigate. My plan now is to take the lump sum layoff pkg then "retire" August 1st and apply for UE.

I can't help thinking that my level and age were a factor but I need to get over that. Cheers.
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Old 05-21-2016, 12:07 PM   #30
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Congrats! My brother and I got laid off from the same company. I was before 55 so I was not able to take the sick leave in money. I found another job after that and so did my brother. So if you want to work, I'm sure there's work.
OP here. I'm doing my best to take the high road but it's been a challenge to remain upbeat at work. Granted it's been two days. I was thinking until now working 31 yrs and never getting a layoff slip or having to move to a lower cost region was a pretty good ride. I'm treating this as a start of phase II of my career (even if I don't go back to work).
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Old 05-21-2016, 12:18 PM   #31
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supernova72,
Within the next year you won't believe how positive you feel. I ran into another oldster who was shopping at a big box store. He was so happy to hear all my good stories, and was overjoyed to relate his transition to a gov't job.

One thing comes to mind. If you need an area of focus, look at information security to brush up on. I added a masters with IS focus (paid for by megamart), and it really became a differentiator for me.
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Old 05-21-2016, 12:26 PM   #32
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OP here. I'm doing my best to take the high road but it's been a challenge to remain upbeat at work. Granted it's been two days. I was thinking until now working 31 yrs and never getting a layoff slip or having to move to a lower cost region was a pretty good ride. I'm treating this as a start of phase II of my career (even if I don't go back to work).
I know some people got hired last year after 7 years of being laid off. I think they moved some jobs to Southern Cal.
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Old 05-21-2016, 02:01 PM   #33
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supernova72,
Within the next year you won't believe how positive you feel. I ran into another oldster who was shopping at a big box store. He was so happy to hear all my good stories, and was overjoyed to relate his transition to a gov't job.

One thing comes to mind. If you need an area of focus, look at information security to brush up on. I added a masters with IS focus (paid for by megamart), and it really became a differentiator for me.
Thank you. Good tip for focus. I believe if I was in Info Security the position would have been spared. I'm familiar with the different elements of that org but don't have any specific certifications for that area (yet).

My first 15 ish years were actually in "IT Finance" areas. My finance skills might be more marketable but I'm still trying to figure that part out.
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Old 05-21-2016, 07:32 PM   #34
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Your numbers are still kind of tight to me, with social security you will be fine but certainly wouldn't want to draw down on your 401k any as it really isn't that much, sorry to be a downer but contract work seems to be a prudent choice to me.
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Old 05-21-2016, 08:07 PM   #35
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Severance/UI is like hitting the jackpot, congrats!
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Old 05-21-2016, 09:33 PM   #36
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Hi Supernova,

I know congratulations may not feel appropriate after getting RIFed, but the layoff benefits from the big "B" are fat enough that I think you'll be happy.

My situation is very similar to yours: Same company, same pension and retiree medical premium (+- 2%). Let me reiterate what others have said, carefully consider whether it's worth delaying your pension in order to receive unemployment insurance.

For us in CA, unemployment pay only lasts 6 months, my last day was December 31st and with the various layoff payouts I'll be in the 28% tax bracket for 2016. Under these circumstances taking the full unemployment payout and delaying the onset of my pension until the start of 2017 was a no brainer. Monthly benefit grows by 5.5% and my tax will go down to the 15% bracket in the new year.

That said, depending on your age, health and specifics of your income stream you may decide it's worth it to start your pension sooner and cut short your unemployment benefits. Probably worth modeling in your retirement calculator of choice to see what works best. IIRC employees of our Megacorp in your state had some special deal in which 2 full years of unemployment benefits were offered. While that's a long time to live off of savings + unemployment the 11% growth in your pension benefit during that time could be very worthwhile.

Enjoy it. You've earned it!
Oh boy for UE I thought I could get it and draw my pension on 8/1 here in WA state. I'll need to double check that. I'm in a non represented salary job class and our pension was frozen at the end of 2015. If I delay pension it adds about $8 a month (yes, 8 dollars). So my math said taking the pension soon ($3K a month) is comparing $18K to $600. I could be wrong
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Old 05-21-2016, 11:33 PM   #37
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Oh boy for UE I thought I could get it and draw my pension on 8/1 here in WA state. I'll need to double check that. I'm in a non represented salary job class and our pension was frozen at the end of 2015. If I delay pension it adds about $8 a month (yes, 8 dollars). So my math said taking the pension soon ($3K a month) is comparing $18K to $600. I could be wrong

The way to think about this is to calculate the value of an annuity equivalent to your pension. So in your case what is worth more? -
An immediate $3100/month pension,
or a $3148/month pension starting in 6 months + 6 months of UE
(or possibly other delays if you have the potential for longer UE).

When I did the calculation for me (including taxes) it was worth delaying my pension a full year, but no more. My details are a bit different from yours (my payout is about $100/month less, but my rate of increase per month is somewhat greater) so your calculation will be different from mine, but it's still worth optimizing the value of these benefits.

Another difference between our situations is that since you are being RIFed mid-year it may be marginally worthwhile for you to take the income continuation option rather than the lump sum payout. This would permit you to push a bit of your layoff benefit (and all of your UE) into tax year 2017. Your RIF date is barely into the 2nd half of the year, though, so this may not matter much. As I was RIFed at year end all of my layoff benefits were in tax year 2016 regardless, so there was no downside to taking the lump sum and starting UE immediately.

On a related note of managing taxable income, you may also find it worthwhile to immediately increase your 401K contributions to ensure you hit your $24K limit for the year. 401K deductions won't be taken from your layoff benefit so you want to make these changes soon. Also, since the company now allows for taxable 401K contributions to be converted into a Roth you may also find it useful to up your contributions in this area as well.

All these details and how you should play them depend on your particular circumstances. So my advice would be to run the numbers with these various possible inputs and see what gives you the greatest total return.
Regardless, the benefits of these strategies are really only rounding errors compared to the total value of pension + savings. Making the "wrong" choice here won't have a disastrous impact on your net worth. It's just that since these benefit choices are available to you, you might as well get the most out of them.
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Old 05-21-2016, 11:49 PM   #38
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The RIF date and the starting of the pension date are they different for you?
I was not 55 when I got laid off, so it was 2 different events. I just go my pension this year. But the unemployment office in CA didn't count the lump sum severance as a working time regardless of how it's taken, lump sum or weekly.
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Old 05-22-2016, 02:37 PM   #39
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It feels weird since I've never been "laid off" before.
I've been laid off twice, both times In late spring before the most memorable, relaxing and enjoyable summers of my 25 year and counting career. It's a gift. Don't ruin it by fretting or going back to work too soon.
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Old 05-23-2016, 08:04 AM   #40
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Severance/UI is like hitting the jackpot, congrats!
Thanks. Some say I can't retire AND get UE so I'm double checking that. Cheers.
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