My employer gave me my 60 day notice yesterday

[supernova72]

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.

 

[Senator]

Congrats!

While it may be a bit stressful in the short run, plan on collecting unemployment after the severance ends. Do not neglect to take the UE benefits, unless you are prohibited from taking them by some employer agreement along with the 'package'.

Once you start a pension, you cannot likely get UE.

For the UE reason, you may want to get a lump sum severance, unless other benefits stop and go with the severance payments.

 

[dadu007]

No kids to worry about?
If it were me, I would take a very long vacation and only then start thinking about what to do. Sounds like you could land a job pretty easily when ready.

 

[REWahoo]

I work in an aeropause industry...

Thanks for exposing me to a new word.

Looks like Don Pardo gave you some nice parting gifts. Six months severance followed by a pension plus dirt cheap employee medical is far better than most of us who pull the plug on our own get.

Congratulations, and enjoy your upcoming freedom. Take some time before deciding to pursue contract work - you may find you'd rather sell a kidney than go back to work.

 

[DrRoy]

It does start out as a shock, but hopefully you will be able to see it as a gift. Good luck.

 

[Aerides]

I'm in a similar situation re notice, but was already ER-ready and waiting because I had a feeling the layoffs were coming.

I'll get a really great severance, so it's a total win financially, but I get your point that it's still kind of weird, ultimately, getting the layoff treatment. Just have to put that aside and figure out what you want to do, and don't rush!

The next few weeks as word spreads will also be tricky, so be prepared for people who will give you that sad-face look.

 

[marko]

Retiree medical for $70 a month until Medicare?

Don't worry. Be happy.

 

[Big_Hitter]

Retiree medical for $70 a month until Medicare?

Don't worry. Be happy.

+1

I'd be doing backflips

 

[mh]

Somewhat anticipated but still internalizing what my next steps are. I work in an aeropause 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.

If you are going to do contract work , I'd jump in right right away. You can always bail if you change your mind , but the longer you are away the harder it is to get back into it.

Also do a sanity check on your financial details with firecalc if you have not done that.

Lastly many people look at what their (possible) lump sum payouts would be able to buy them on the immediate annuity market and then compare are that against what their mega Corp pension would give them. Sometimes the mega Corp pension is a good deal , sometimes not. Since you've been with them 30 years there is a reasonable chance your pension might be worth sticking with.


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[Options]

+1

I'd be doing backflips

+2
That 6 month buyout gift just reduced your two year anticipated retirement date down to 18 months...and you didn't have to do a thing to get it. You may even be able to rethink your plans and move your retirement date forward to now, if you so choose.

Most people would give anything to be in your situation and get this kind of free gift so close to retirement. I hope you remembered to say thank you.

 

[supernova72]

Thanks for exposing me to a new word.

Looks like Don Pardo gave you some nice parting gifts. Six months severance followed by a pension plus dirt cheap employee medical is far better than most of us who pull the plug on our own get.

Congratulations, and enjoy your upcoming freedom. Take some time before deciding to pursue contract work - you may find you'd rather sell a kidney than go back to work.

Oh crap, spelling error!!

 

[supernova72]

No kids to worry about?
If it were me, I would take a very long vacation and only then start thinking about what to do. Sounds like you could land a job pretty easily when ready.

No kids and I have a trip to Vietnam planned. Cheers!

 

[supernova72]

Congrats!

While it may be a bit stressful in the short run, plan on collecting unemployment after the severance ends. Do not neglect to take the UE benefits, unless you are prohibited from taking them by some employer agreement along with the 'package'.

Once you start a pension, you cannot likely get UE.

For the UE reason, you may want to get a lump sum severance, unless other benefits stop and go with the severance payments.

Thanks for the great feedback. I'm told if I take the layoff income stream I can't "retire" until that 26 weeks pay ends. But if I take the lump sum I can retire on August 1st and draw my pension (it's frozen now).

I need to make sure I don't mess up my UE like you mentioned above by picking the wrong options.

 

[supernova72]

Retiree medical for $70 a month until Medicare?

Don't worry. Be happy.

Yes, until medicare kicks in. It could go up or away of course but as a heritage employee I get retiree medical. They changed it recently where retirees get the same options as current employees so I'm built in a buffer for that sense it will most likely go up year after year.

 

[supernova72]

I'm in a similar situation re notice, but was already ER-ready and waiting because I had a feeling the layoffs were coming.

I'll get a really great severance, so it's a total win financially, but I get your point that it's still kind of weird, ultimately, getting the layoff treatment. Just have to put that aside and figure out what you want to do, and don't rush!

The next few weeks as word spreads will also be tricky, so be prepared for people who will give you that sad-face look.

Yes so true about the word spreads and the reaction folks are giving. Totally understandable but I'm trying my best to take the high road and say "I'm retiring" vs. getting laid off mostly out of embarrassment. My management team is supportive of that approach. Yesterday I got a hug out of the deal from a close co-worker from a previous job. That was very nice and she's one I will keep in touch with.

 

[Bamaman]

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.

 

[stepford]

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!

 

[Nodak]

+2
That 6 month buyout gift just reduced your two year anticipated retirement date down to 18 months...and you didn't have to do a thing to get it. You may even be able to rethink your plans and move your retirement date forward to now, if you so choose.

Most people would give anything to be in your situation and get this kind of free gift so close to retirement. I hope you remembered to say thank you.

+3

 

[RobbieB]

Even better than that, he's still working 2 months so retired 22 months earlier than planned and only lost income for 16 of them.

That health care bene is sweet, mine costs me $530/mo.

Nice pension too, welcome to early retirement even earlier -

 

[bclover]

Congrats.
I actually had a similar situation. My division of megacorp split and was doing horribly so they offered folks a "please go away nicely package" I was retiring in 2 years also so I jumped on it.

You healthcare is sweet. mine is 750/month but I do have two children on it. 6 months salary and healthcare

best of luck to you

 

[pb4uski]

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.

 

[HBD2019]

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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[Fedup]

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.

 

[Rothman]

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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[brewer12345]

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.