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Another Take The Package and Run or Not Question..
Old 06-09-2012, 10:08 AM   #1
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Another Take The Package and Run or Not Question..

Hi everyone,

I work at "A Large Corp" and am eligible for early retirement and have 2 weeks to decide. I am almost 52, have two kids (entering in college and teen) and expect that I need to have to work for another 10 years. I have worked for the company for a long long time..

The "package" is about 12 months salary that is added to a pension and current medical premiums would be paid for 2 years.

Although my employment is probably safe for now, I do not like parts of my job, and feel that if I stay I will be dumped with work that I do not like (e.g., having to spend a lot more time on being political to advocate my program which will start losing high level sponsorship). So actually, its a good time to think about a new job..

I feel that within a year I could get a job, but have to get a paycut of 20 to 30%, but it would be managable. I have enough $'s to go for about 15 months w/o a job (if I use package).

While I realize this is a very personal decision.. I am somehow seeing this opportunity as a way to take control of my own career, but yet torn with the security that I have here (for now)..

Is this something that people can relate to? My fear is not being able to find a job after a year, having to pay medical premums after 2 years, and having to start eating 401K, IRA or college funds.

Any thoughts on this?
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Old 06-09-2012, 11:02 AM   #2
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How realistic is it to think that you can find a new similar job, compared to how likely is it that if you refuse the package you will be able to continue your current job?
If you get a new job at nearly the same pay, an extra 12-months salary is a big bonus. Even if you do get a new job quickly, a 30% reduction in pay will cost you much more over your remaining 10 years working than a one time bonus. Likewise, if you anticipate a long job search, time out of work can hurt your chances for finding work, can use up your termination bonus and can make it hard to convince employers you are worth your previous salary.

The other danger is that once a package is offered, people who stay may not necessarily be employed indefinitely. Often a second, less generous, package comes next. Or even layoffs with no choice and severance much less than any previous package. Is your company in serious danger of decline, or is this package opportunity an anomaly and if you stay you are likely to be employed there as long as you plan?
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Old 06-09-2012, 11:14 AM   #3
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Hi influx2012, welcome to the forum.

If you were to continue with your current job how long would it take for you to be financially as well off as taking the severence? 1 year salary and 2 years medical might be equivalent to working for your current employer for another 18 months or so and then using COBRA for your healthcare. Over that time you can look for a new job. If you find it, great. If not, you're better off by staying employed.

Seems to me the risk to staying is you find a new friendlier but lower paying job in less than a year and by taking it you leave some money on the table. The risk to leaving is you don't find a new job after a year, or even two. Which risk are you better prepared to manage?
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Old 06-09-2012, 11:33 AM   #4
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Originally Posted by growing_older View Post
How realistic is it to think that you can find a new similar job, compared to how likely is it that if you refuse the package you will be able to continue your current job?
If you get a new job at nearly the same pay, an extra 12-months salary is a big bonus. Even if you do get a new job quickly, a 30% reduction in pay will cost you much more over your remaining 10 years working than a one time bonus. Likewise, if you anticipate a long job search, time out of work can hurt your chances for finding work, can use up your termination bonus and can make it hard to convince employers you are worth your previous salary.

The other danger is that once a package is offered, people who stay may not necessarily be employed indefinitely. Often a second, less generous, package comes next. Or even layoffs with no choice and severance much less than any previous package. Is your company in serious danger of decline, or is this package opportunity an anomaly and if you stay you are likely to be employed there as long as you plan?
Hi growing older,

Interesting perspectives.. and thanks for your answer..

I suspect that it will be a long time before another package (if any) is offered (5 years ago company had a package). There are no expectations of any package after this one and if laid off it would be 1/2 of what is offered now, with no medical.

The company has a positive outlook and is here to stay, but got too fat over the last year. There are expected to be 10% workforce cuts through 2014, (over 25K is the number). I will probably survive a round or two, but more than a few years is questionable.

I believe I'm overpaid for my role, so would expect a cut anywhere I go, but if I make 80% of what I make now, I would be happy.

I'm thinking its not just a financial decision -- llke you point out -- because when I look through numbers it may not make financial sense, but at this juncture I believe I have marketable skills and think that going out would allow me to enhance my skills and grow, if I stay, I'll be stuck in a job I don't like as much..

The other factor I'm thinking through is that if I'm laid off in a few years, it'll be so much harder as I need to work for at least another 10 years..
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Old 06-09-2012, 03:10 PM   #5
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Originally Posted by influx2012 View Post

I'm thinking its not just a financial decision -- llke you point out -- because when I look through numbers it may not make financial sense, but at this juncture I believe I have marketable skills and think that going out would allow me to enhance my skills and grow, if I stay, I'll be stuck in a job I don't like as much..

The other factor I'm thinking through is that if I'm laid off in a few years, it'll be so much harder as I need to work for at least another 10 years..
It isn't just deciding if you want to leave your current employer and take package versus stay at current employer hoping to stay as long as possible. The third possibility is to decide you want to leave your current employer and start looking for a job and not taking a package. If you feel your current job is stable for a year or two that may end up being the safest alternative. That said, it could leave money on the table but you lessen the risk of being unemployed for an extended period of time (assuming you can find a job before being laid off at current job). If you find another job that offers health benefits the package offer of health insurance premiums doesn't give you much.
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Old 06-09-2012, 04:26 PM   #6
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Life isn't just about the money. If you think you are overpaid for a job you are not enjoying very much, and thinking that it will get worse soon, plus generally expecting your skills will atrophy by being stuck with things you don't like to do, then this package may be just the gentle nudge you need to start looking for a new job. Maybe you should have started already. At least now, if you think you might take this package, you should start your job search NOW, not after you are awarded a package or after you have the money in hand or (as I've seen all too often) you have finally spent the last of the package bonus. If you (quietly) start searching and get some positive responses in the next week or so, you can be much more confident about taking the package.
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Old 06-09-2012, 05:00 PM   #7
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Originally Posted by Katsmeow View Post
It isn't just deciding if you want to leave your current employer and take package versus stay at current employer hoping to stay as long as possible. The third possibility is to decide you want to leave your current employer and start looking for a job and not taking a package. If you feel your current job is stable for a year or two that may end up being the safest alternative. That said, it could leave money on the table but you lessen the risk of being unemployed for an extended period of time (assuming you can find a job before being laid off at current job). If you find another job that offers health benefits the package offer of health insurance premiums doesn't give you much.
+1
By all accounts looking for jobs when you are over 50 and unemployment in this so called economy is a miserable and soul sucking experience. Many employers won't even consider a resume from somebody who is currently unemployed. So by far your best chance of finding a job is to start looking while you still have a job.

Given that you only have two weeks to decide, I think I'd polish up the resume and put out a few feelers, but I wouldn't take it unless it was clear that your skills are in high demand out there.

Decent severance packages are easier to find than jobs for the over 50 crowd.
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Old 06-10-2012, 10:24 AM   #8
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Hi everyone, thanks for providing some perspective on this.. if anything this is a real wake up call.. sort of like the analogy of like a frog waiting for water to boil... have to take some corrective action now and not just stay wand wait for "something" to happen..

Katsmeow.. third possibility of staying in current job over next few years, is definitely the safest, and a wake up call on establishing the most marketable skills so I can to make the change... The gotcha is that if I'm laid off, I would get only 1/2 o the "layoff package" and no medical (net would be about 40% of early retirement package) but after about 2 years it would net to be about the same as taking the package now...

Growing older, yup definately going to put out some "feelers" out there and talk to recruiter to see how marketable my skills are..

Cliftp: "Decent severance packages are easier to find than jobs for the over 50 crowd." Interesting point, which really points to ensuring I have the most marketable skills as possible..

The net is that I will spend some time to upgrade resume and put some feelers out there... this is not an easy decision for sure, but put some considerations into focus such as taking control of career, understanding the path for retirement, which is in itself a very useful exercise..

Also another variable is that I could use this "time off" to recoop and take care of some much need time with family.. so it becomes a worklife balance consideration too -- for the short term..
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To Take or Not To Take
Old 06-10-2012, 10:43 AM   #9
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To Take or Not To Take

My DH works for the same megacorp and is unhappy in his current position. He's in no danger of WFR right now, but the work he's going to be doing doesn't interest him. He's older, however, we have no kids at home, and could live on savings and retirement income. But he does want to find another job so he's already put out feelers. If you have marketable skills, can be flexible about where you live (did you mention if that's a possibility?), and have a financial cushion until you find a job, the $ is hard to pass up IMHO. Especially if you get WFR in six months or a year.
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Old 06-10-2012, 11:18 AM   #10
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My DH works for the same megacorp and is unhappy in his current position. He's in no danger of WFR right now, but the work he's going to be doing doesn't interest him. He's older, however, we have no kids at home, and could live on savings and retirement income. But he does want to find another job so he's already put out feelers. If you have marketable skills, can be flexible about where you live (did you mention if that's a possibility?), and have a financial cushion until you find a job, the $ is hard to pass up IMHO. Especially if you get WFR in six months or a year.
Hi Pawprint.. I hear ya, being laid of in six months to a year is a killer... Moving for me is not a real option... This is certainly a tough decision because who knows what it will look like 6 mo or a year from now..

The $ is hard to turn down, but Pawprint, there's also the fact that one can control my "retirement pension" (in my case) by moving it into a self directed IRA. Moving these $'s, means that the $'s can grow over time.

So for everyone else, I should mention, also part of the "retirement pension" pot can be moved to a self directed IRA, which means ultimately over 10 years the $'s can grow. Currently, its an amount that fluctuates year by year, but is tied to interest rates, and no additional $'s are put into the retirement pension... This would be a reason to take the "package", but this option would be available any time I leave the company..
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Old 06-10-2012, 12:39 PM   #11
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Just a note, the megacorp lets you do an inservice rollover of your 401(k) into an IRA. We did that last December. The choices in the 401(k) aren't that great IMHO, and rolling it into an IRA gives you a lot more control. Not all companies do this, but this particular megacorp allows it. If you're not familiar with inservice rollover, it just means that you can still be working for megacorp and roll your 401(k) into an IRA--no penalties or fees. You just have to fill out the paperwork.
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Old 06-10-2012, 02:24 PM   #12
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IF you think you are employable elsewhere - and that's a big if, then the deal is pretty sweet. If you think you might be forced to take a lower paying position, but you also expect that realistically that's going to happen in a year or two anyway, then the deal also seem pretty sweet. I think you could lose if you are wrong about employment prospects AND that you could have kept your job (that you don't like so much), which doesn't sound like a resounding win since you're not all that happy there.

Unless the company 401k is very unusual, it's also a positive to be able to roll that money into an IRA that you control.
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Old 06-10-2012, 03:03 PM   #13
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The way the SC goes on the health care law (which may be decided within 2 weeks) might also influence your decision one way or the other. If so, you may want to wait a few days (but before the end of your 2 week decision period) to see if the ruling comes in, and act accordingly.
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Old 06-12-2012, 09:07 PM   #14
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Time for my first post.

Influx, I work for the same Megacorp and finally decided to enroll in the early retirement program this evening. I'm 53 so I'm not really ready to retire but I've lived well within my means for many years and should be able to handle it financially. It won't be a 'life of luxury', that's for sure!

What made me decide to do it was that today I heard about some WFR's that were too close for comfort. I may have been able to keep my job for a while but, for the last few years, it has been stressful and the hours are just crazy. I haven't had a raise in god-knows-how-long but last year was the best year moneywise (lots of overtime) that I've ever had in the 28 years at Megacorp. If more people leave I can almost guarantee they will not be replaced and then those who remain will end up working even more overtime with even more stress from being on-call all the time. Like I've told my manager, I'm not a machine that you can make work 12-14 hours, wake up 4-5 times a night (which in some cases results in a trip to customer sites in the middle of the night), and on 1 hour (maybe) of sleep do another 12 hour day of driving from customer to customer yet again. It's not going to get better, it never has, it's just going to get worse. After another 'typical' day at Megacorp today I felt the time was right.

PawPrint, I was not aware I could roll my 401k over to my IRA. I agree, the fund choices leave a bit to be desired. Someone's making money, it's not me! I believe that this year the govt is going to make the fund companies show how much of our 401k money is eaten up by fees. Maybe then the 401k administrators will be more competitive. I'm going to look into the 401k rollover tomorrow.

Thanks for listening, this has been probably the most stressful decision I've ever made. I've been a bundle of nerves since I got the email last month.
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Old 06-13-2012, 12:30 AM   #15
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Time for my first post.

Influx, I work for the same Megacorp and finally decided to enroll in the early retirement program this evening. I'm 53 so I'm not really ready to retire but I've lived well within my means for many years and should be able to handle it financially. It won't be a 'life of luxury', that's for sure!

What made me decide to do it was that today I heard about some WFR's that were too close for comfort. I may have been able to keep my job for a while but, for the last few years, it has been stressful and the hours are just crazy. I haven't had a raise in god-knows-how-long but last year was the best year moneywise (lots of overtime) that I've ever had in the 28 years at Megacorp. If more people leave I can almost guarantee they will not be replaced and then those who remain will end up working even more overtime with even more stress from being on-call all the time. Like I've told my manager, I'm not a machine that you can make work 12-14 hours, wake up 4-5 times a night (which in some cases results in a trip to customer sites in the middle of the night), and on 1 hour (maybe) of sleep do another 12 hour day of driving from customer to customer yet again. It's not going to get better, it never has, it's just going to get worse. After another 'typical' day at Megacorp today I felt the time was right.

PawPrint, I was not aware I could roll my 401k over to my IRA. I agree, the fund choices leave a bit to be desired. Someone's making money, it's not me! I believe that this year the govt is going to make the fund companies show how much of our 401k money is eaten up by fees. Maybe then the 401k administrators will be more competitive. I'm going to look into the 401k rollover tomorrow.

Thanks for listening, this has been probably the most stressful decision I've ever made. I've been a bundle of nerves since I got the email last month.
Bobby,

Thanks for hearing me out too... Under those circumstances I totally understand that rationale...

On the one-hand can get so invigorated thinking that I could take control of my own destiny and go outside megacorp, and try to find another opportunity for a company that I could add more value. I'm in the process of testing the market too, to see if there's anything out there and if I'm employable...

I also think about the "survivors" and how hard it wlll be for them, (and whether they will survive) and am asking the question "do I want to be a part of the new organization" and will it align with my own career objectives.. is this a place I want to work at..

Yet, I feel like it is sort of jumping off a plank, and feel risk averse.. I applaud you for making the decision that you made. This made me realize how personal this decision is . Thanks for hearing my ramblings...
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Old 06-13-2012, 04:50 PM   #16
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This is second hand information, but one of my friends in the same mega-corp also decided to take the package and go look for a job. Be realistic about your chances.

My friend has made some assumptions:
1. She will probably make less in the new job, at least for the short-term
2. It will take a few months to find a job
3. The first job she is offered or even takes will not be the one she wants, so she expects to have to change jobs a few times before she settles in one.

All the best.
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Old 06-19-2012, 04:58 PM   #17
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Influx,
Three days to go! I came close to taking my name off the early-retirement list but haven't so far.

PawPrint,
Has your husband seen any WFR's in his area yet? We're starting to see some, not in my immediate group but in other areas not too far removed from us.
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Old 06-19-2012, 05:39 PM   #18
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No WFRs in his group that I know of. The stuff he works on is slowly going to India, however, and he's doing stuff he doesn't like so he's taking the EER. Since he wants to continue working, we know he'll have to take a pay cut, especially where we live, or move. As the day approaches, it gets a little scary, but kind of exciting, too.
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Old 06-19-2012, 10:16 PM   #19
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"I work at "A Large Corp" and am eligible for early retirement and have 2 weeks to decide. I am almost 52, have two kids (entering in college and teen) and expect that I need to have to work for another 10 years. I have worked for the company for a long long time.."

Not to scare you, but if you've worked for this company for a long time, I doubt you really know how bad the current job market really is, especially for those over 50. I would advise you to not leave your current job without a new one lined up.
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Old 06-19-2012, 10:43 PM   #20
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I don't know about bobby5832708, but getting 14 months of pay put into the pension account vs. getting some severance if you're laid off is really tempting if you're watching parts of your job go off to India. Where we live, there have been newspaper articles about how companies aren't finding skilled people in DH's field. Of course, perhaps they're only looking for kids with these skills, not older workers. Luckily, we can live on our retirement savings--just don't want to right now.
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