Hi, mother offered early retirement, seeking advice!

[zwiepak]

Since you said she lives in Tampa Bay area she could probably sell the house and find an apartment for a lot less than $1200 a month .

Well, it might just come to that, but we'll exhaust all other options first. Her home has, essentially, been the family home for years. A lot has been put into it by various family members, I painted most of the rooms, neighborhood friends installed tiles, fixed easy plumbing issues, etc. It truly is an attachment...

Push comes to shove, I'm thinking using her 401 and equity to buy a 2 bedroom condo in a 55+ community, resulting in a tiny mortgage. However, given current market conditions, selling a home is going to take a lot of time. Beautiful time to have retirement forced upon someone...

 

[zwiepak]

another thought - if your mother takes the $$, can she ask that the severance is paid to her in 2009 - another year's earnings, as far as SS.

ta,
mews

Great idea, but I don't know if it will apply, as she'll need to draw off of SS as well to get by.

 

[freebird5825]

Exactly. The laws, in my opinion, are hollow. Too easy to get around. Aside from that, the CEO has openly stated, after stating 3rd quarter results, there will be layoffs. Which makes any age discrimination case even harder to prove I would imagine.

They are also trying to gauge whether or not she's going to take the offer. She recently got called into her supervisor's office to see if she received the plan, and what she thought of it... The sad part is, from what I gathered from the conversation, her supervisor, in not soo many words (and this is the part no one can prove outside of an actual legal recording), told her if she didn't take it, there could be layoffs in the future, whereas the option would be lost. Now I know that's really skirting a legal line, I know she needs to have a REAL option... ...but like you mentioned, too easy to get around.

what i'm hearing is that they may be trying to...believe it or not...do well by her by offering her an early out before KNOWN layoffs occur. Or it's just a CYA exercise due to her age and gender. it's kinda hard to tell from here.
my vote is take the offer and move forward.

 

[CRABBY JERRY]

Great idea, but I don't know if it will apply, as she'll need to draw off of SS as well to get by.

She is lucky to have you looking out for her.I also think she should consider the offer and on a positive note, at least she has a little time to think it over whereby some get pink slips without much notice as I did a few years ago after working for 20 plus years.It is indeed a scary time but as I said before, having a person such as yourself helping her, she will be okay.

 

[jIMOh]

There are two things have popped in my mind. How easy would it be for her to get another job in her area? If she took the package, could she receive unemployment benefits?

This was my initial thought- take the early package, then work somewhere else.

You did not indicate what the ER offer from employer was? This would factor into the decision.

I would list annual expenses for your mother
then indicate how much of this SS will replace.

The consider the delta as the problem to solve with ER package+working another job. Maybe she works another 10 years (delaying SS until age 70) and collects a higher benefit.

 

[jIMOh]

After reading the whole thread now, I think there are many details to consider.

Collecting spouse's SS benefit until her own benefit is higher should be considered.
Collecting her SS benefit now and delaying collecting spouse's benefit should be considered.
The size of the ER package should be factored into the whole decision- is she getting 1 weeks pay per month worked (or something similar) as severance? Is she getting a decreased pension? Is she getting some other ER benefit? I have seen companies do combinations of these- give a 3-12 month severance pay, plus a decreased pension benefit to get salary off the books.

SS will be taxed if your income plus half your SS benefit exceed a given dollar amount. Make sure you factor this into the equation (SS is normally tax free). Up to 85% of SS could be taxed if your mother's other income was too high.

 

[mf15]

Let us know what was in the package, I just went through this myself,been ERed since Oct31. They gave us a years severence pay,well actually 2 weeks per year of service, I have been there 31 plus years so I have a years pay. Full pension none COLA but they payed it up so that there was no reduction due to ER. Also I and wife can stay in medical plan until 65,but of course have to pay monthly premium
like everyone else that works there. Lost dental and life insurance.
There are many laws governing these types of packages so I am sure it is all on the
up and up, but my thinking was layoffs could be around the corner since we were
aquired by an investiment company, and I dont trust them to not have future layoffs
especially since the economy has gone south. I can also get unemployment but the pension is subtracted so I dont get much, on a weekly basis.
Old Mike