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Employer death spiral
Old 09-01-2015, 06:49 PM   #1
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Employer death spiral

I just found out last week that my employer is going to layoff 15 percent of the workforce. The layoff will be seniority based and I'm about middle of the pack so I guess I'll be safe....for now.

I'll be 54 this month and my milestones will be 1/1/16 when I can take penalty free withdrawals from my 401K and September 2016 when I'll be eligible for retiree health care. Plan B for health care would be ACA.

I can't say this is totally unexpected as the company has struggled to remain profitable in recent years. This in part has led me to become a minimalist and had sold my house and disposed of most of my possessions. The positive reason for my change in lifestyle is also my dream of full time RV travel, perpetual travel or some combination of the two.

It remains to be seen if I'll jump or be pushed out of the plane.
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Old 09-01-2015, 06:51 PM   #2
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I survived many of those 10-20% layoffs... It decimates morale. Here's hoping you make it to your Sept 2016 gravy spot.
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Old 09-01-2015, 07:37 PM   #3
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You might want to check and see if there's going to be a package. You might be able to volunteer, get out early, and save someone else's job. That's what I did, and it worked out nicely.
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Old 09-01-2015, 07:53 PM   #4
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Some people put their head in the sand and imagine that things will work out for them, that the company will rebound or some other magic will happen. Sounds like you have a very realistic view and are preparing for anything, including the worst. Good luck! I think you'll come out well. Maybe not what you envisioned 5-10 years ago, but it may be just fine.
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Old 09-01-2015, 08:08 PM   #5
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I always preferred jumping both literally from planes and employers. Being pushed out means one is unprepared for the exit, the transit to.... and landing.
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Old 09-01-2015, 08:44 PM   #6
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I believe it is likely to reach my 1/1/16 milestone at which point I'll be reading all the old threads here about ACA. From what I've read so far it seems that ACA isn't a too terrible option. I'd regret having to walk away from the retiree health care as it's an account with about 70K in it.


I used to see planning for my retirement as building a fortress, now I see it more like a war of mobility. Plan, Do, Assess, Repeat
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Old 09-02-2015, 12:35 AM   #7
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If you are prepared it could become a blessing in disguise.
No OMY syndrome...
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Old 09-02-2015, 02:57 AM   #8
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it's good you have already begun "de-cluttering". It will make what ever comes that much easier. Possessions can hold you back. Getting rid of possessions is very liberating. DW and I have spent the summer getting rid of yet more "stuff."

Best of luck in whatever comes. Just keep your hand on the rip cord!
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Old 09-02-2015, 07:28 AM   #9
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If you are prepared it could become a blessing in disguise.
No OMY syndrome...
This has crossed my mind also. No decision to agonize over. Just take the package that is offered and walk away.

It seems I've always been dragged kicking and screaming to a better life.
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Old 09-02-2015, 08:01 AM   #10
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Originally Posted by Koolau View Post
it's good you have already begun "de-cluttering". It will make what ever comes that much easier. Possessions can hold you back. Getting rid of possessions is very liberating. DW and I have spent the summer getting rid of yet more "stuff."

Best of luck in whatever comes. Just keep your hand on the rip cord!
It had begun to feel like my stuff owned me and this de-cluttering has become an obsession with no end in sight. I was always doing something to maintain a possession that brought me no joy. I still have stuff, but only stuff I love.

I have no idea what the future holds but it won't include dragging around a bunch of useless cr@p. Light and nimble is my goal.
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Old 09-02-2015, 09:33 AM   #11
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Quote:
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I used to see planning for my retirement as building a fortress, now I see it more like a war of mobility. Plan, Do, Assess, Repeat
As unclemick might say, "Agile, mobile, hostile"!

I was lucky enough to be "bridged" to 55, when retiree health insurance kicked in, a benefit without which I'd have to keep w*rking...
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Old 09-02-2015, 10:32 AM   #12
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Retiree medical is $70k in an account? That might be kind of safe. Otherwise I would expect retiree medical would be the first to go for a company in trouble. ACA is OK. If you don't want a subsidy you can go directly through an insurer.
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Old 09-02-2015, 01:30 PM   #13
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You might want to check to see how much your retiree healthcare premiums will be.

I was shocked when I found out that mine would by ~$1700/month for the coverage I have now. Turns out the sweet plan was eliminated about 4 years ago but I hadn't remembered seeing anything sent on the change.

It's my understanding that you can't pay HC premiums with an HSA account (if that is what yours is). So it pays to know all of the details.
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Old 09-02-2015, 01:48 PM   #14
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DH retired in Feb. 2015 and we were eligible for retiree healthcare till we found out it would have been over $2,200 per month. Yikes! We chose to do Cobra for 18 months then onto Obamacare.

Megacorp could not (or should I say would not) give us an upfront cost of the retiree healthcare plan. Imagine our surprise when we found out how much it would cost.
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Old 09-02-2015, 01:49 PM   #15
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You might want to check to see how much your retiree healthcare premiums will be.

I was shocked when I found out that mine would by ~$1700/month for the coverage I have now. Turns out the sweet plan was eliminated about 4 years ago but I hadn't remembered seeing anything sent on the change.

It's my understanding that you can't pay HC premiums with an HSA account (if that is what yours is). So it pays to know all of the details.
Retirees hired after 2004 (me) pay the full cost of their insurance premiums which at this time is roughly 500/mo. The premiums can be paid from the RRA. (Retiree Reimbursement Account) Its not a HSA and bears no interest. If I found a better deal elsewhere the account would reimburse me also. The account is credited $9750 annually.
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Old 09-02-2015, 02:18 PM   #16
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Retiree medical is $70k in an account? That might be kind of safe. Otherwise I would expect retiree medical would be the first to go for a company in trouble. ACA is OK. If you don't want a subsidy you can go directly through an insurer.
The only thing I've heard thus far is rumor, 1 month of pay for every year of service up to 16 months. That was for the salary employees, I'm hourly Union so there will be negotiations between the company and the Union next week. I hope there will be a provision to add say, 1 year to age and 1 year of service. That would set a precedent if there is a round 2 layoff or a complete shutdown.

I'm not in panic mode as I've got a well funded 401K/IRA, no debt and I'm safe for now. I still have some human capital left in the tank so if need be I'm sure I could find another job. I look at the group I work with and I wouldn't trade places with anyone. There are some guys that are going to be in real trouble and I'm concerned about them.
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