1. Money

8 Steps to Dealing with Forced Retirement

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7 of 8

Should You Take a Buyout?
Often, in an effort to satisfy both the shareholders and their agents, the Board of Directors, who need to cut costs to save the company and / or improve performance while simultaneously avoiding painful layoffs, management will offer employees early buyout packages, enticing them to retire early in exchange for a predetermined level of guaranteed benefits such as a cash payment, lifetime annuities, etc. This is actually a great tool because it allows those who want to get out to do so at an above-average rate which, in turn, makes them happy while at the same time keeping as many employees as possible on staff that want to continue working. So, how do you know whether or not to take a an early retirement buyout offer?

Ask yourself these questions …

  • Do I love what I do? Am I showing up to work for something more than the money or am I mostly interested in a paycheck? If the answer is the latter, you might want to take the buyout and retire early.

  • Could I find additional work fast enough so that the buyout can be added to my existing retirement accounts? The cash can be a nice added boost that can actually get you closer to your financial goals if invested wisely.

  • How certain am I that if I do not take the buyout offer, I’ll be laid off anyway? Often, workers that do not take early retirement buyout offers and are laid off leave with a fraction of what they would have otherwise received had they elected to leave voluntarily. Unfortunately, this is merely a game of odds – do you have what the company is looking for by bringing specific skill sets that are not widely held by other staff? Would it be cheaper to eliminate your job and replace you with a lower paid employee? Are you in a financial position to take that risk? If not, you might want to consider the buyout offer and retire early.

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