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Retirement Buyouts?
Old 08-10-2020, 11:33 AM   #1
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Retirement Buyouts?

What are the chances companies will be offering early retirement buyouts and packages in the upcoming months? Has anyone been offered one yet? Which industries do you think they would be more likely? If your company offered one, would you be inclined to take it? If so, what type of things would you want in the package?
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Old 08-10-2020, 02:42 PM   #2
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Hospitality, airlines & tourism are the obvious ones but I think there's financial pressure on nearly all companies. I'm in the financial services biz and there is tremendous pressure on expenses. I don't foresee any retirement pkgs at my place. More likely, I see layoffs across the company based on individual performance rankings. In either case, i would be happy to walk away. Not sure about other places but, at my place, the difference between "retirement" pkg and "separation" pkg (layoff) is about 10-20 weeks of pay.
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Old 08-10-2020, 03:07 PM   #3
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One of the best things about my MC was a clearly documented severance package plan, which was generous and used over and over and rarely changed at all. while I did hear of occasional changes for individuals, for the most part it was exactly as published. Everyone always knew what to expect and the company stood by it over and over.

Every time there was another whisper of layoffs I'd download and save the latest copy to safeguard against a bait and switch, but I never had to worry. When my time came (they consolidated locations and I turned down a relo as I was ready to ER) they followed the letter to the T and I was thrilled to sign the paperwork.
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Old 08-10-2020, 07:48 PM   #4
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My employer started down that path just before Covid hit last spring. For some reason, they only targeted older employees, and you had to be "invited." I had let my b*ss know that I was planning to hang up the spikes soon (despite being younger), so I hoped that she would have some flexibility to make me an "invitation," but it was above her pay grade.

Now Covid hits the fan, we are going to be knee-deep in red ink, and I imagine there won't be any changes to this policy.
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Old 08-10-2020, 08:37 PM   #5
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Some in the oil patch are offering buyouts now.

~40 years ago I was offered a "package" to leave a company and I jumped at it. At that time I was able to line up a better job with a better starting salary in the same field with another company so it was a pretty easy decision for me. If I remember correctly, the package included full pay and benefits for 6 months plus full vesting of the savings and retirement plans.
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Old 08-10-2020, 08:48 PM   #6
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They would not offer me what i want - insurance. Not old enough . throw that in and I will leave today for free. Just let me know where to return their equipment.
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Old 08-10-2020, 10:10 PM   #7
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My wife's employer hinted at early retirement offers in the future, but so far it has just been talk. No offers have been made, and I have my doubts they ever would.

As to whether we would take it, probably not. It seems the industry standard is two weeks pay for every year of service, which would only work out to about a one year salary for my wife. At this point that would not be enough to allow us to retire earlier than planned.

On the other hand, if an offer like this were to come a year or two from now, it might be something we could work with. We would have to run the numbers at that time to see if it would be workable.
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Old 08-11-2020, 05:05 AM   #8
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At my MCorp, early retirement packages were expensed from an OVER-funded pension (how rare is that?). As such, the easy outs did not hit the corporate bottom line as a one time quarterly expense - they showed up only as immediate and long term savings.

The accounting practice at your MC may provide some insights into the probability and generosity of early retirement packages.
DW and I are 59/59. FIRE'd August 2019. Non-cola pension available but will remain untouched until mid sixties to grow, max SS for DH at FRA or 70. Mega retiree health available. IRA rollover from 401k Jan 2020 for NUA treatment. LTCG next few years. AA 40% stocks, 7% cash and 53% Intermediate Treasury fund. Rising equity glidepath.
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Old 08-11-2020, 07:52 AM   #9
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I'm planning to retire next summer anyway. So, if I got 26 weeks of salary plus a year of paid medical, that would be a sweet deal. We are a non-profit, so I'm not sure how to assess where the money would come from or how quickly the company would recoup that investment. We're a defense contractor (with an average age in the 50s). I'm assuming the defense budget is going to be reduced - possibly significantly reduced - because of the money going for the COVID response. Getting rid of some of the longer-tenured, better paid individuals would benefit the company significantly.

Well, right now it's just a dream - but I would definitely be first in line if offered. I'm 57 with 36 years at the company. I think that is the demographic they'd want to consider if offering early retirements.
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