quit or wait to get laid off?

[pdxgal]

My company recently merged with another, and while the two serve different geographic markets (health insurance) I suspect a layoff could happen. So I'm wondering if it would be better strategically to quit before (or if) that happens, mostly for health insurance reasons.
If I quit voluntarily I can buy my company's retiree health insurance (HSA with $1500 deductible, 80% co-ins after that) for $550/mo. The premium may go up over time of course, but that's the starting point. If I get laid off and had to buy ACA insurance, the premium would be the same or higher for a less rich plan (much higher deductible). My FIRE income will be too high for me to get subsidies, mostly because I still need the income to pay my mortgage. Plus there's uncertainty if ACA will even continue to be available, premium shifts YoY, etc.
If I get laid off, I'm not sure I could still get into the retiree plan. (If they were to give us a week's notice for example maybe I could give me notice before that window runs out?) But, I would probably get some sort of severance, though I doubt it would be particularly rich.
I'm 57, so still have 8 years till Medicare. Financially the indications are I'm FIRE-ready.
Thoughts and suggestions from the ER hive mind?

 

[davebarnes]

My quick guesstimate of the value of retiree health insurance is $4K/yr vs Obamacare.
Would severance be more than $32K?

 

[pacergal]

If you are FIRE ready, did you factor that with COBRA or ACA costs for health insurance? How much of a difference does it make in your FIRE plan?

If I had to make that decision, I would probably hold off and see if layoff and severance was offered. Hopefully, your company may offer those close to retirement age a good package or at least access to retiree health care costs.

 

[CardsFan]

I would recommend you look into the retiree HI plan. There should be a written plan summary that will tell the requirements to qualify, and, most importantly, what would prevent you from qualifying.

At my old MegaCorp, once you qualified (via years of service, age, or a combo of the two) you were eligible for any reason you left (except maybe if you were fired for cause).

 

[RunningBum]

Are you sure about your FIRE income being too high for ACA? I spend a lot more than what I make in taxable income. If you sell $30K in stock that has $20K basis, that's only $10K income.

 

[brett]

Do the after tax math on both options using your best guestimates. Get the details on your retirement plan. Could be that you are eligible based on age, service, or a combo no matter if you are laid off or you quit. Will you get the same amount of employment insurance if you quit vs a layoff?

IF you have stock options layoff treatment may be different than if you quit. It was for me. Layoff gave me a much longer period to exercise. If there is a layoff will you get lump some or will you get salary continuance for a certain period which will include your benefits such a pension credits, health care, disability. It may also reduce the tax burden by stretching it out past year end.

Then make a decision.

I stayed for two years. It was very much to my advantage to do so. Everyone's numbers are different. And....I had no issue with remaining until 59.

 

[Bamaman]

Most large company personnel programs are written in employee booklets, etc. Are you eligible right now to "retire" and get the ability to purchase their insurance as a "retiree?" (I don't call that quitting.)

Our company published the severance pay on voluntary separations at company option (layoffs). Knowing what to expect would make a decision better for you.

When companies merge, layoffs are the norm as personnel expenses are the largest expense of any company. Our Megacorp was just another that overreacted to the 2008 economic times and laid off everyone over 55 or 30 years.

 

[pb4uski]

Merger could mean a good thing... everyone seems to jump to a conclusion that if my employer is merging with another company that it will be bad for me... not necessarily... especially if you are a good performer. DD's employer was bought a couple years ago... once the new parent got to know her and her capabilities they offered her a job at the parent company and she has received a couple promotions and is now making almost twice what she made with the acquiree... all in 2 years.

Second, it is unlikely IME that a laid off employee will be treated less generously than an employee who has resigned, which the OP seems to be assuming... if it ends up being the case then you can just quit before they notify you that you are laid off.

In any event, way too early to hit the panic/eject button.

 

[jimandthom]

Since you say you are FIRE ready, and if you like your present job etc, stick with it and go with the flow.

Since you don't know that you will be laid off, what is the likelihood of finding another job (if you desired) paying similar etc should you quit.

If you do get laid off-- you will have some UI coming in. If you quit--- you don't. You may find a job you like, you may not.

You really are in or nearing a sweet spot for controlling your own destiny.

 

[neihn]

I am also from Portland OR and retired from mega-corp last year at 58. I am currently on COBRA HDHP with HSA, I pay $400/month premium and $6500 max out of pocket. After COBRA, I am eligible to stay on mega-corp retiree health insurance, however, the premium will increase to $700 for the same plan (this is just for myself, my spouse has her own HI). If I decide to leave mega-corp health insurance plan, I won't be able to go back to the plan.

My plan is to stay with mega-corp until 65 since:

1. I don't know what will happen to ACA.
2. ACA premium without subsidy is also around $700 for a bronze plan.
3. Give me the freedom to do ROTH conversion (not to worry about ACA subsidy)

 

[badatmath]

Definitely do not quit yet you might miss out on severance. But double check what makes you eligible for reitree health! My employer is very very specific.

 

[pdxgal]

Are you sure about your FIRE income being too high for ACA? I spend a lot more than what I make in taxable income. If you sell $30K in stock that has $20K basis, that's only $10K income.

Gross income from my rental properties alone is $50k, and I need about $65k to cover my expenses.

 

[pb4uski]

Gross income from my rental properties alone is $50k...

But ACA would be based on your rental properties net income (Sch E bottom line) since it is based on AGI and some adjustments.

 

[pdxgal]

Merger could mean a good thing... everyone seems to jump to a conclusion that if my employer is merging with another company that it will be bad for me... not necessarily... especially if you are a good performer. DD's employer was bought a couple years ago... once the new parent got to know her and her capabilities they offered her a job at the parent company and she has received a couple promotions and is now making almost twice what she made with the acquiree... all in 2 years.

I suspect it's a bit different for someone who's your DD's age (I'm assuming she's younger) vs 57. Ageism is real, unfortunately.

Second, it is unlikely IME that a laid off employee will be treated less generously than an employee who has resigned, which the OP seems to be assuming... if it ends up being the case then you can just quit before they notify you that you are laid off.

In any event, way too early to hit the panic/eject button.

Yes, that is what I am assuming...that once I have received a lay off notice I will no longer be able to join the retiree health plan. As folks here have suggested I will double check the eligibility requirements. I was laid off three times before, and each time we got the announcement and had to leave the same day. No transition time. At least now I'm thankfully not in a panic since I'm ready to FIRE, just trying to be strategic. Appreciate your reassurance in any case

 

[sengsational]

I've only read the subject, but I figure if you have the mental fortitude to ignore what's going on at work, why not stay, let them pay you, while you concentrate on something that will get you somewhere, long-term.

 

[jw72]

I was at a heath insurance company when a layoff happened. They said employees were not eligible for the retirement health insurance plan. A few of them got an attorney and the company lost, they can not talk about it exactly but they were all happy.
My recommendation, get the contact info of others over 55 who will be let go, take the layoff with a smile and contact a lawyer.

 

[pdxgal]

Thanks to all who suggested closely reading the eligibility requirements (doh!) for the retiree health plan.

Looks like I *would* be eligible if I were to get laid off with severance. "If you are covered by a severance agreement, your coverage will begin the first of the month after your severance payment ends." Though it also says "you need to be enrolled in company medical insurance as an active employee in the year you plan to retire. "

Of the three times I was laid off, I recall receiving severance only once. The first time my position was designated project-specific so not eligible, and the other time was at a start-up. I think odds are my current megacorp would pay severance. So I suppose this eligibility info is reassuring. Thanks to all who chimed in with advice and suggestions!