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Let go at 64, tips?
Old 10-06-2016, 10:04 AM   #1
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Let go at 64, tips?

A family member was just let go from medium Corp after 15 years, as part of a larger group of terminations (I can't use the corporate-speak of layoff - he was let go) following a merger.

I'm wondering what advice members might give who have been through this. I'm not privy to his financials, but he lives frugally and he says he doesn't need to touch any money right now, so I'm basically asking general, non-budget advice.

Here are some particulars:

He is 64 years old, with a 55 year old wife and a 15 year old son. The money for junior's college is set aside already.

Spouse works as a contractor, sporadically, no benefits.

PhD - level researcher, stats guy.
Was a loyal employee who was proud of the work he did, respected in his field, and he is admittedly reeling from the implied dent to his reputation. A week later he's still referring to the company as "us" and "we" and he's a bit tied to the internal politics still.

His COBRA is a staggering 1,500/month, so I think he'll have to go on the ACA exchange for coverage. He has no idea where to start. He obviously has Medicare on the horizon but the family will need coverage as the spouse has no benefits as a contractor. Deeply appreciate any help in this regard. He lives in a state with an exchange.

I've looked over his separation agreement (i'm a lawyer) and it's fine, and doesn't restrict his work options.

He is a former teacher, and my own informal advice is to substitute or help tutor kids at the local university. I think he'd love to work with athletes, for example, and maybe earn 800-1000 a month.

This is all very general, but I appreciate any tips and advice from those who were fired before they were ready to be FIRE'd.

In particular, info about health care coverage, transitioning to Medicare with a younger spouse is helpful, as are any tips on evaluating whether to try to jump back into the corporate world, consult, or try something lower-key.

Appreciate your thoughts
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Old 10-06-2016, 10:12 AM   #2
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First of all, nice of you to help out a family member in a tough time.

You've got lots of questions and there are already lots of helpful threads on these topics.

He should be able to sign up through the exchange (state or federal) for 2017 during open enrollment. I'm not sure if he can opt for it immediately when COBRA is an option, but someone here I'm sure does know that. I did just read a newspaper article that said many people are inadvertently giving up their ACA tax subsidies by buying their insurance outside of the government-run exchange, and it sounds likely that they will qualify for subsidies, so that's the first place to go.

Sounds like your advice to have him look into tutoring or other university related part-time work makes sense. He could also probably be an excellent high school substitute or tutor in his field for advanced placement classes (which are essentially college level).

I'd also encourage him to take advantage of the extra time with his teenage son - it's a rare gift to have that flexibility and will likely pay off in many unforeseeable ways in the future.

Good luck to the family!
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Old 10-06-2016, 10:22 AM   #3
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He might want to take SS now, and you need to check this out, but I think old fellows with young children get SS for the child as well as themselves.
So while it would mean his SS is lower than normal full retirement amount, the extra bonus his child would get until an adult might make up for the difference. (basically front end loading his total SS return).

Hopefully someone who knows the details of this can chime in.
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Old 10-06-2016, 11:14 AM   #4
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You state he received a so-called "separation agreement" (HR speak for we give you a few tokens so you'll sign away any rights you have, go away and not to sue us for anything after throwing you out after fifteen years of "service"). Most of these agreements will offer severance of 1-2 weeks of paid-for COBRA for every year of employment. Even if the organization is cheap (which most are these days) and offers one week per year, he should be getting about 15 weeks of COBRA, the equivalent of approx. 4 months of paid-for healthcare. Additionally, he is eligible for unemployment, although practically worthless at $425/week for the max, it's still something and will last 6 months.

$1500/month for COBRA is probably to cover family. I would surmise the reason it's so high is because he's using PPO. Should he switch to an HMO (which he may not want to), the cost should be considerably cheaper. Should he want to, he won't be able to do this switch from PPO to HMO until the organization's open enrollment period. Something to consider.
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Old 10-06-2016, 11:30 AM   #5
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You state he received a so-called "separation agreement" (HR speak for we give you a few tokens so you'll sign away any rights you have, go away and not to sue us for anything after throwing you out after fifteen years of "service"). Most of these agreements will offer severance of 1-2 weeks of paid-for COBRA for every year of employment. Even if the organization is cheap (which most are these days) and offers one week per year, he should be getting about 15 weeks of COBRA, the equivalent of approx. 4 months of paid-for healthcare. Additionally, he is eligible for unemployment, although practically worthless at $425/week for the max, it's still something and will last 6 months.

$1500/month for COBRA is probably to cover family. I would surmise the reason it's so high is because he's using PPO. Should he switch to an HMO (which he may not want to), the cost should be considerably cheaper. Should he want to, he won't be able to do this switch from PPO to HMO until the organization's open enrollment period. Something to consider.
Thanks - he got 3 months of pay and one month of COBRA premium paid. It is family coverage.
He actually has to start paying COBRA November 1, but they added $1,500 to his severance for Nov-Dec. The exchange rates appear to be closer to $800 so we just need to check that eligibility in light of the fact that he's still eligible for COBRA. Key issue for him right now. I'm sure he's fine with PPO or HMO going forward but thanks for that insight.
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Old 10-06-2016, 05:47 PM   #6
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Additionally, he is eligible for unemployment, although practically worthless at $425/week for the max, it's still something and will last 6 months.
I wouldn't consider a possible $11,000 as "practically worthless". Why would anyone leave that money uncollected for no good reason??
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Old 10-06-2016, 06:24 PM   #7
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Because they didn't want to look for a job?
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Old 10-06-2016, 06:33 PM   #8
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Thanks - he got 3 months of pay and one month of COBRA premium paid. It is family coverage.
He actually has to start paying COBRA November 1, but they added $1,500 to his severance for Nov-Dec. The exchange rates appear to be closer to $800 so we just need to check that eligibility in light of the fact that he's still eligible for COBRA. Key issue for him right now. I'm sure he's fine with PPO or HMO going forward but thanks for that insight.
This gentleman needs to get over any thoughts that he was "let go." He needs to understand that he and probably anyone over 55 years old were part of a wholesale displacement of employees. It wasn't anything personal toward his skills or the job performance. Often corporations will cut loose older, higher paid employees and young low paid employees in a cost cutting measure. And often they overreact to economic conditions and/or government regulations and programs like what the ACA have done to them indirectly.

If after 15 years he only got 3 months severance pay, that mid size corporation wasn't worth working for in the first place. Major corporations would be offering 6 months to a year of severance pay and the ability to buy their healthcare insurance (not COBRA) until Medicare kicked in.

With a 15 year old and a part time working wife without benefits, he probably needs to go ahead and try to re-establish himself in another job.
Or, the wife needs to seek full time employment. Unfortunately, age discrimination in the workplace is rampant, and jobs are hard to find the older you get--no matter your level of education and experience.

His ex-employer was actually doing him a favor.
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Old 10-07-2016, 08:46 AM   #9
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can he not FIRE?
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Old 10-07-2016, 09:07 AM   #10
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And if the company did fire disproportionately from the over age 55 group, it might be worth looking into a lawsuit alleging age discrimination. He can always tip off the labor department while deciding if he wants to do something himself.
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Old 10-07-2016, 09:50 AM   #11
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I would think that they would probably qualify for subsidized health insurance under ACA which might trim that $800/month ACA cost substantially.

Given his wife is so much younger, I'm not sure if it is wise to start SS early though the 15 year old would receive a benefit the wife would receive a lower benefit for the rest of her life if the husband predeceases her... some analysis would be required to assess the impact.
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Old 10-07-2016, 05:16 PM   #12
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I would apply for unemployment as soon as he is allowed.
His severance impacts this so he should check with his former employer.

He is eligible for Medicare in a year.
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Old 10-07-2016, 06:28 PM   #13
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He might want to take SS now, and you need to check this out, but I think old fellows with young children get SS for the child as well as themselves.
So while it would mean his SS is lower than normal full retirement amount, the extra bonus his child would get until an adult might make up for the difference. (basically front end loading his total SS return).

Hopefully someone who knows the details of this can chime in.
I can speak to this. Presumably because he has a PhD - he can run some numbers... Maybe make a spreadsheet... but this is something that changes the math for SS.

If a person claims SS their minor age children can qualify for an additional SS benefit until their 18th birthday or their last month of HS if they don't graduate until age 18. For my sons - this means they will get SS until they are 18.5 since they won't graduate till 18.5. (DH is on SS).

The SS is in the child's name, and you need to document that the money is used for the child's expenses. I keep a spreadsheet that I update each month with our actual spending #'s and what their share is.

Normally SS is actuarial neutral... If you die when the average person does... You get less per month if you collect early - and more if you collect late - but if you live to the average age - they come out to the same amount of money. The dependent benefit changes the math, in many cases, to make it better to take sooner.

Now... all this could be moot - it sounds like he might have had a career in academia previously (based on his education and the fact that he only has 15 years with medium corp)... so if it was a public school or university there may be restrictions on his SS amount. I'm not an expert on that - but if his SS is lessened - then the math changes again....
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Old 10-09-2016, 09:58 PM   #14
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Thanks everyone - good thoughts here.

I think his plan is to use his 3 months of severance payout to test the market for consulting and see where it goes from there
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Old 10-09-2016, 11:33 PM   #15
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If he is 64 he should retire anyway. Close enough -
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