As companies restructure and look for ways to save money, oftentimes they will incentivize the voluntary departure of the company before your normal retirement date. If you are offered an early retirement package, there are a number of factors you’ll need to consider before deciding if the package is the right move.
What's the severance package?
First things first, you need to analyze the financials. The amount of severance your company offers you may be based on your years of service. You might have options regarding lump-sum payments or differed payments over several years. Bottom-line - make sure your severance will be enough for you to make the transition into your original expected retirement phase.
What will I do about healthcare?
One of the biggest problems with retiring early is finding affordable healthcare. You will likely need to consider other insurance options like COBRA or coverage through your spouse’s employer. Bottom-line - make sure you are covered until you are eligible for Medicare.
What will happen if I say “no”
If you decline the early retirement package, your future at your company could go well or sour. On one side, you may earn salary raises that boost your pension. Or, you may be offered another severance package in the future that is not as good as the initial offer. Even worse, you could be laid off down the road.
Been offered an early retirement package? We can help. Give us a call at 320.222.4236 to schedule a no-cost, no-obligation review meeting today.