Layoffs.

[Sarah in SC]

You should not think twice about taking this deal. I would KILL for such an offer.

+1. Take it!

 

[Mulligan]

Compelling reasons for leaving, FWIW, DW agrees with you.

Best I could find online for unemployment "Unemployment Insurance (UI) is a temporary income protection program for workers who have lost their jobs through no fault of their own." I'll give them a call tomorrow, I've got till the middle of the month to decide.

I certainly don't disagree with what the group is suggesting, but just make sure the "area between the ears" is in agreement. You appear to be a person who has a financial
plan and lifestyle desired in retirement. If you take the buyout and adjust your spending rate to compensate, while you be happy with this lifestyle? If you rachet down the the years you plan to stay alive, to the make the numbers work back to your originally intended yearly burn rate, will you become a worrier and fret over your money lasting?
My retirement was simple. Retired early and live off the pension. But the space between my ears would not allow me to enjoy this until I just completed 3 years of part time work to build up a sufficient reserve to where I do not worry now. It is a great feeling for me. Good luck in your decision!

 

[jollystomper]

One years severance ($100k), and $5K for retraining which I'd probably use for fly-fishing or golf school.

I'd first figure out what that severance ad training is after taxes, and if the resulting impact will not be an issue.

Do you have the ability to spread it out, or must you all take it at once? Almost every company i am aware of requires you to take it all at once (less bookkeeping for them), so you need to factor in the taxes on the severance as they may push you into a much higher tax bracket this year. That 100K severance might turn out to be closer to 60-65K based on the federal and any state tax impact.

For the training sometimes this is treated as a taxable benefit so you want to check that as well.

As Mulligan mentioned, you want to be sure that you will be happy in adjusting your spending rate before making the decision.

Good luck! I'm the same age as you but have more savings. If this was offered to me I would take it in a heartbeat. But your mileage may vary.

 

[Bestwifeever]

Take it and don't look back.

 

[padlin00]

I'd first figure out what that severance ad training is after taxes, and if the resulting impact will not be an issue.

Do you have the ability to spread it out, or must you all take it at once?

I believe it's all at once and the figure is before taxes, but it's another thing to check on. The effect of taxes when combined with this years earnings to date is something I hadn't thought of.

I You appear to be a person who has a financial
plan and lifestyle desired in retirement. If you take the buyout and adjust your spending rate to compensate, while you be happy with this lifestyle?

This is much of the conundrum, I do/did have it all figured out. This certainly could change our projected lifestyle. DW is fine with it, don't know as yet if I would be.

 

[clifp]

Don't retire continue paying into social security and medicare to help the rest of us retired folks. Heck I don't think you should ever retire there is no greater glory than dying in the office and being taken out feet first.

Actually I only said this because the forum is boring when everyone gives the same advice

 

[REWahoo]

DW is fine with it, don't know as yet if I would be.

I'm beginning to waiver. I think Clifp might be right. Maybe you should keep working and 'take one for the team' - we'll really appreciate your hard work and sacrifice.

 

[DJRR]

Are you willing to work the next year, with fewer colleagues and more stress for FREE? I bet that would take 2 years off your life so your gain is not so much. The first package is always the best.

Sounds like by your numbers you could take your current assets with no growth divide by 12 and get to 70 on your current expenses with little problem. Having an inflation adjusted annuity at that point will give you a solid base plus whatever you have left in investments to supplement it. I predict that the years 58-70 will be more valuable than the years 70-82 if you reach them, but it is still a gamble. I would look at it as removing a lot of the risk of retiring early. You can always say "Welcome to WalMart" and pass out smiley stickers

 

[ikonomore]

I would take the package and cut back on expenses for a couple of years.
This way it wouldn't effect my w/d rates as much.

 

[Redbugdave]

On this forum we angle things to death. That is good. We don't like surprises.

With that in mind...if you took the offer...would you go near the beginning of 2014, or would it be this year? Tax wise...that is important to know when getting severance. The beginning of 2014 would be better since you would not have made that much earned income for taxes...which could affect the tax rate of your severance.

By the way...I lean the way the group says and get the hell out of Dodge...and get on with what's important...your life.

 

[obgyn65]

I would do the same.

I would be inclined to take it. If you don't take it, you may be in the next round of layoffs and may not get anything.

 

[pixelville]

I would take it. A couple of things to negotiate (depending on the size of your company) - last date for your employment, you can say you will help with transition and some training, it could be 3-6 months from now. Also see if you can push the severance to 2014-Jan or spread out.Also make sure you max out on your 401k this year for the remaining paychecks.

 

[padlin00]

With that in mind...if you took the offer...would you go near the beginning of 2014, or would it be this year? Tax wise...that is important to know when getting severance. The beginning of 2014 would be better since you would not have made that much earned income for taxes...which could affect the tax rate of your severance.

The one email I have says end of July, but I have yet to talk to anyone.

 

[RockyMtn]

I would take this in a heartbeat and you should as well.

 

[ERD50]

You should not think twice about taking this deal. I would KILL for such an offer.

Agreed, well other than the committing a felony part.

padlin00, just listen to yourself (emph mine)...

...

I'm 56 employed at the same place for 35 years, wife is 57 and self employed, she has cut back her hours to spend time with the grand kids. Job prospects for me would not be good as aside from the age thing, while I'm in computers few of the skills I have are transferable to local businesses. I'm in manufacturing and honestly wouldn't want to do this anymore even is there were other opportunities.

...


All the calculators say we can do 70k - 75k for 40 years. We need about 50k (figures are after taxes) for the basics and could cut to about 40k if we had to, but have been closer to 70k lately with some long delayed home remodeling after 32 years. We've been tracking spending with Quicken for the last 18 months.

... With the layoffs, forced on many, our work load will be getting even worse then it already is, which is not something I look forward to.

I don't need to add anything. Severance, enough money for your lifestyle, medical coverage, job going from bad to worse if you stay - what else would it take? What are you waiting for?

And for some perspective, I'd say 98/100 of these types of posts are from someone who can't pull it off financially, but are sick of their job and want affirmation. That's not you.

Cross over children. All are welcome. All welcome. Go into the Light. There is peace and serenity in the Light.

-ERD50

 

[Independent]

This looks kind of like my financials at 56. Other people at my company were getting generous severance, but I didn't get the chance. I was hoping they'd fire me.

But, I had a DB pension as well. That gave me a cushion. I also had kids in college and getting fired would have increased their financial aid.

Realistically, you can't plan on getting $65k of real income from a $950k portfolio. So you have to be prepared to see your portfolio drop (at least in real terms) between now and the time SS starts. You or your wife may find that psychologically unsettling, even if the numbers say it's okay.

My company provided heavily subsidized medical to early retirees when I retired. They dropped it two years later and that was a serious financial hit. Your medical deal may be guaranteed, and if Obamacare stays around you've got it as a fallback.

 

[gauss]

Regarding unemployment, in Michigan since there is no law against it, employers typically require you to contractually agree NOT to apply for unemployment in order to get the severance. You might want to check with HR to see if this is the case for what is being offered.

Also please remember that if your company were to go through restructuring ie bankruptcy that your severance would not be protected.

-gauss

 

[ERD50]

--

Realistically, you can't plan on getting $65k of real income from a $950k portfolio. So you have to be prepared to see your portfolio drop (at least in real terms) between now and the time SS starts. You or your wife may find that psychologically unsettling, even if the numbers say it's okay. ..

Yes, I just took his 'All the calculators say we can get $70K' at face value. But where is it coming from? If it is the only source while waiting for 70 for SS, that could deplete that portfolio to a pretty low level - would SS still get you in to the $70's (in today's dollars) if the portfolio took a hit?

Is there a pension in there somewhere?

-ERD50

 

[Ed_The_Gypsy]

My 2 cents:

First, forget the tax consequences, how ready you are, your mindset, etc. Take the package. Because...

You are not likely (like a snowball's chance) to get a better deal. If you don't take this, it could turn out much worse.

You are going to have to make this transition some time. Adjustments will be necessary no matter when you stop working. It hurts to do it on someone else's schedule, not yours, but it will hurt a lot more if you miss this opportunity.

 

[Hamlet]

+1

You always want to try to be the first person off the sinking ship. The layoff deals almost never get better over time.

I'd also mention that in the first round of layoffs at my workplace, the offer was pretty generous (when I left). The second round wasn't pretty as there was a change in upper management with a different "outlook" on what was owed to excess employees. That combined with a death of a good friend who was working "one more year" and never got to spend a day in retirement, gives me my current perspective.

 

[target2019]

I would take the offer, and try to get UI, and whatever else can be had legally.

At 56 you will be able to pick up part-time work easily if necessary. Or you can try to find a business need and start your own business.

Just be careful with your time once it is all free. I know in the 10 weeks I was recently off it was difficult to stay on task. You can probably take care of a lot of the necessary home remodeling chores you mentioned.

 

[padlin00]

Yes, I just took his 'All the calculators say we can get $70K' at face value. But where is it coming from? If it is the only source while waiting for 70 for SS, that could deplete that portfolio to a pretty low level - would SS still get you in to the $70's (in today's dollars) if the portfolio took a hit?

Is there a pension in there somewhere?

-ERD50

Savings is all we have, SS for wife at 66 would be 15k, myself at 70 is 39k. And yes, it does drop a lot waiting to take SS at 70. The only way I know around it is to spend less. The figures I use are what Firecalc and Quicken say I can spend at have a 95% chance or better of success. Do I have 20% extra to handle such a loss in the market? No, but I have no need to spend it all of it at any given time. I am susceptible to market sequence issues but there's not much I can do about it.

 

[REWahoo]

Savings is all we have, SS for wife at 66 would be 15k, myself at 70 is 39k. And yes, it does drop a lot waiting to take SS at 70. The only way I know around it is to spend less.

What does FIRECalc say if you plug in taking SS at 66 instead of 70? (I'm not trying to start a debate on when to take SS, just asking if the numbers might work better for you if you didn't burn down your savings too far before taking SS.)

 

[padlin00]

If I leave all else the same getting SS at 66 we run out of cash in early 90's as opposed to 95.

 

[REWahoo]

The only way I know around it is to spend less.

Short of passing up $100,000 and working full time for another 3.5 years under what you believe will be unpleasant circumstances, there is another solution: a part-time job. This has been suggested a number of times but I sense you don't think this is a viable option.