I'm a 57-year old, single engineer. I've been LBYM, so I have my house paid off and a decent amount saved up.
I'm struggling with an upcoming decision. I have been offered a separation package from <meager corp>. I need to decide by Jan. 29.
I have been offered 2 options, both of which are retirement packages:
- One will give me a non-COLA'd pension (about 20% of my salary) AND a lump sum of 12 months pay (which I can roll into an IRA).
- The other is an enhanced non-COLA'd pension package (about 25% of my salary) and no additional money.
Either option gives me co-paid medical coverage until age 65 (when I'm supposed to go on Medicare, etc.)
I'm really struggling with the thought of leaving. Had this been offered 2 years ago, when I was working for a crazy workaholic boss, I'd grab this opportunity and run for the door. But now I'm hesitating. Currently, my job is OK and I have a great supervisor. Of course, after we lose 1/3 of our salaried staff through these separation packages, who knows who I'll be working for and what I'll be doing. Most likely, everyone's workload will be ramped-up as we'll have to "do more, with less [people]".
Also, we have a new CEO who is not a proponent of paying people to leave, so I foresee that any future staffing reductions will not be accompanied by separation packages. I've heard rumors of another round of staffing cuts in October 2007.
I'm trying to think of the things that I would miss if I were to leave. A big one is the intellectual caliber of the people I work with. Everyone is top-notch, so any conversation I have with any person is at a very high-level. These are people who think (like me) and can have reasoned conversations about most anything.
So, if I decide to leave, this is something that I'd have to recreate somewhere else.
I'd also miss the very good paychecks that I regularly get. I feel like I'm walking away from a perfectly good job. (Sort of like the comments you often hear about sky-diving -- why would someone jump out of a perfectly good airplane?)
So, as you can see, I am hesitating...
I have enough in savings that, combined with the pension, I can survive.
Besides fear, I think one of the things that is keeping me from retiring, is the admission that I will now be on a fixed income. In other words, I currently don't have to worry about a little overspending every once in a while, as I can count on that steady, good-sized paycheck every month. In retirement, I feel like I'll need to be much more limited in my spending (even though dory's calculator and I-ORP show my future income as being more than I spend today).
Any suggestions on how to get over my fear? What about my concern about now being on a fixed income forever? Is this anything someone here else has had to deal with? How did you handle it?
With regard to my 2 options -- I'm leaning towards the smaller pension with the lump sum. My thinking being, "a bird in the hand...", if I invest the lump sum well, what it earns when added to the smaller pension, should outperform the enhanced pension. Any thoughts?