Just received my early retirement offer packet

[Lisa99]

Talk about a surge of adrenaline when that email hit the inbox.

I wasn't sure whether I would qualify. I needed 65 'service credits' combined between age and years of service. I have 64 years, 11 months and 27 days (yes they broke it down that granular). Anything over 15 days is rounded to the next month, so I have exactly 65 years of credits.

The money side of it is the equivalent of nine month's pay (about $100k for my situation) but added to my pension rather than in cash. The health insurance part of the offer isn't a factor since I'm on DH's insurance. If I don't take it and get laid off in the restructuring I get 4 months of pay.

Normally the offer wouldn't be good enough for me to consider, however, they've added a weird twist. At manager discretion, the retirement date can be deferred for one year, so retirement date could be August 31, 2013 instead of August 31, 2012. That one extra year of working would make all the difference in the world in my decision.

Lots to think about and a conversation to be had with my manager which is ok because she is a great lady and I trust her implicitly.

 

[Free To Canoe]

Congrats on your good dilemma!

 

[rodi]

Sounds like the fates are aligning well for you.
Fingers crossed that things continue to align after the convo with your boss.

 

[Midpack]

Congrats, you're on the threshold of one of life's (big) milestones. Good for you!

 

[Nords]

At manager discretion, the retirement date can be deferred for one year, so retirement date could be August 31, 2013 instead of August 31, 2012. That one extra year of working would make all the difference in the world in my decision.
Lots to think about and a conversation to be had with my manager which is ok because she is a great lady and I trust her implicitly.

Weird devil's advocate question: if your trusted manager is replaced by another manager, is the 2013 decision subject to revision?

 

[Lisa99]

Weird devil's advocate question: if your trusted manager is replaced by another manager, is the 2013 decision subject to revision?

With this company anything is possible, so the answer to your question is probably yes.

I'm really wanting to be able to say yes to this, but if I were to be let go earlier than August 2013, it would gut our chance to retire in May 2015, which we've recently revised from Sept 2016.

The decision will probably come down to risk tolerance. Is it better to take the package and risk getting let go before Aug 2013 or is it better to coast in a job that I like with a manager that I like for the next three years straight into a controlled, planned retirement (assuming I don't get let go in the restructuring!)

 

[Htown Harry]

Is it better to take the package and risk getting let go before Aug 2013...?

I'm not sure I understand what you're saying, Lisa.

From Megacorp's perspective, I'd think they will generate list #1a from those that accept the retirement offer and plan an immediate departure. A bunch of experienced hands will walk out the door.

Then there will be a list #1b made up of other retirement-offer-accepting, experienced folks who their managers agree should stay on for up to 14 months.

For project close-out, continuity, training of successors or other reasons, some managers might try to talk key folks from list 1a onto list 1b.

In relatively short order, then, lists 1a and an 1b are set and a new baseline labor cost for 2013 and beyond can be calculated.

Then the bean counters send down instructions to compile a list #2 for layoffs, to hit some target measured in dollars or headcount.

Is moving folks from list 1b to list 2 at that time a likely scenario?

You didn't say how long you have to respond to the offer, so I know I am assuming quite a bit.

 

[Lisa99]

I have until June 22 to decide, so plenty of time to weigh all the options.

What I meant by taking the package and risk getting let go, is that I would take the package tomorrow if they could guarantee that I could work the additional year and retire in August 2013.

However, there are no guarantees, and if I agree to take it and they do an about face and force me to retire this year, for example, it would be virtually impossible to replace my job at my current salary. And we don't have enough yet in the piggy bank for me to quit working.

By taking the package I'm putting our retirement date of May 2015 at fairly significant risk...that's what my gut is telling me right now.

 

[Live And Learn]

Hi Lisa. I don't envy your having to make this decision but at the end of the day you're probably in a much better position than others, so try to count your blessings.

In your position I would run the numbers wiith only 1/2 my discretionary spend budget and see if that helps you make the decision.

Its so hard to balance the bird in the hand vs the two in the bush but I'm hoping and praying that this somehow becomes a no brainer over the next few weeks.

 

[almost there]

Take it.

 

[chris2008]

Take it and discuss with current manager to leave in 2013.
Biggest argument IMHO: If you do not take it now you cannot be sure of anything, not even of your target date 2015. They could let you go any time with 4 months payment, right? So even leaving in 2012 with 9 month pay is better than that.

 

[MichaelB]

Lisa, do you know if your manager is eligible for the package?

 

[JOHNNIE36]

Lisa, what are the chances of getting that offer (to work another year) in writing as a contract? If you are that close with your manager, she should understand your concerns and be willing to do that.

 

[donheff]

I'm guessing that the manager will have to justify retention to a higher authority so no guarantee can be made (other than "I will make the recommendation"). But, like Chris2008 says, what guarantee is there if you don't sign up?

 

[REWahoo]

But, like Chris2008 says, what guarantee is there if you don't sign up?

+1

Take the package.

 

[2B]

Hi Lisa,

I almost hate to bring up a prior post of yours, but have you resolved the DH spending issue? That seems to be a significant wild card for your retirement. Of course, YOU can retire and HE has to work until THE NUMBER is reached based on his spending pattern. In retirement, you'll both have lots of time to spend looking for toys on Amazon.

Have you discussed with your boss where you would stand on the options. You can only go with their opinion. Are they a candidate for the package? What is their opinion on the likelyhood of you surviving the layoffs? Will the extra 5 months pay really make that much of a difference in your finances? My gut tells me that unless you really know how to cut your living expenses in retirement and your numbers are close you don't have "enough."

Here's my heresy. If you leave, are you readily employable somewhere else in the area?

 

[travelover]

This may not apply to your case, but for me the first year of austerity at MegaMotors was early retirement offers with generous extras, which I jumped on. The second year was lots of people (including my former boss) summarily fired and hauled out by security with no notice. This, after they had worked their butts off to cover the workload of all of us year one retirees.

Needless to say, I was glad to have taken the offer.

 

[Lisa99]

Thanks everyone for your replies.

My manager is not eligible for the package and my risk of being let go is small.

The program that I work in is one of the priority areas that will get additional funding as the restructuring occurs. We've added almost 50% headcount to the group in the last six months. I manage one of the teams that is growing and in fact I have two open reqs right now that I've been given the go ahead to hire for.

There is no chance of getting the company to sign a contract guaranteeing I'd stay until 2013. My manager would be laughed out of the room for even suggesting it to HR. My megacorp just don't work that way.

So if I take the package and am let go before 2013, I have to find another high paying job to be able to make our 2015 date. I don't have a college degree and on paper I shouldn't be making north of $100k, but I've been with the same company for 15 years and have gotten where I am through hard work and having managers that didn't care about the lack of a degree. However, in today's market I don't know if I could even get an interview for the jobs I'm qualified for without having the 'required education'.

And yes 2B, DH hasn't spent a penny of the household budget since we've talked. He's still spending, but it's fully within his budget which I'm fine with.

And I just found out the decision may be taken out of my hands. I've read more this morning about the offer and it says that if more people accept than what is budgeted for, people will be approved in service credit order which puts me SOL. Knowing the environment right now, there is going to be a stampeded for the door.

 

[Texas Proud]

To me, it sounds like you are in a good position of not being let go, but I have also found out that what you think and what upper mgmt thinks are two different things...

I was in a dept that was 'essential', but when a merger occured, they decided to do the work a completly different way and they did not need our group anymore... there was also a big power struggle and all the mgrs above me were let go, so I was one with little protection... fortunately for me they get me transferred to another dept where I worked for a few more years until another low level manager decided to change how things were done....


Take the package... and if they DO let you go, you still have 9 months of severence above and beyond what you would have had if you did not take the package... think about it, if they let you go before the year.... they would do the same thing even if you did not have the package...

You do not have to replace your full salary.... you have 9 months of severence to ease the possible reduction...

At the end of the day, there are never any guarantees... so plan accordingly...

 

[Chuckanut]

The money side of it is the equivalent of nine month's pay (about $100k for my situation) but added to my pension rather than in cash. The health insurance part of the offer isn't a factor since I'm on DH's insurance. If I don't take it and get laid off in the restructuring I get 4 months of pay.

Normally the offer wouldn't be good enough for me to consider, however, they've added a weird twist.

WOW! This sounds like a great deal. I would certainly consider it if it was offered to me. I hope it continues to work out well for you.

 

[jclarksnakes]

All of us here on this forum have opinions (bird in the hand better than two in the bush, megacorp sucks get out quick, have to work right up to that exact number, etc.). In the end the most important opinion is your own. The one opinion that is almost as important as your own is your husbands. Together the two of you need to discuss this and then YOU decide. I tend to think that where you will be 10 years from now will be less dependent upon this decision and more influenced by something else. A big swing in the stock market could mean lots more dollars up or down than your decsion on this. As someone on the forum mentioned recently we seem to worry about one thing or the other to the point of overanalyzing it and then something else actually jumps up and bites us in the butt. Don't worry, be happy.

 

[brett]

At the end of the day I suspect that you will go with your gut instinct.

Good luck. I was one of the fortunate ones who got a golden handshake AND was well prepared financially for it.

 

[mystang52]

I'd like to give you some possible reassurance, even though I don't know your exact $$$$ numbers. To wit, if you took the package and were let go before August 2013, I bet you could still hit your desired May 2015 target date. I realize one year's additional salary is not a small thing, but in the big picture I suspect that the severance package and any other job you might get (plus, perhaps, a small amount of belt-tightening) would still let you reach that May 2015 target.

 

[MasterBlaster]

I have a somewhat different take on your situation.

Since a package gets you 9 months and a layoff gets you 4 months, what they are really offering you is an extra 5 months pay.

Since it will take them some time after the packages are accepted or rejected to come up with the layoff list you may be able to work another one or perhaps many months more.

It also just may happen that if they lay you off anyway, you (perhaps) could get the package in spite of what they said earlier.

So based on all that, I would stay working and take my chances. If you can work another 5 months (or more) beyond when package people go out the door, then you are ahead. When you do your analysis don't just look at the dollars from the package.

Keep in mind also, that every month on the job is one more month that you don't have to spend down your nestegg to support yourself. Every month on the job also allows the nestegg to snowball somewhat more as well as whatever you add to it. Those factors are not insignificant.

 

[meekie]

I'm in a similar position job wise (16 yrs at company, no degree, making way more than I should) and I would take the package for sure.

Even if I can't replace my salary, I could do *something* for some extra money while I let my investments grow. But I'm also at the point that I would rather work part time for 3 years, than full time for one year. You might not feel the same way.