Offered an early retirement package

countryfied2011 · #1 04/21/12, 02:11 PM

I haven't actually had the pleasure of looking at the package yet because I was off work yesterday so wont be able to pick it up until Monday. I received an email about it though. From my understanding those who dont take the ERP still might be let go but will only get severance and no enhanced pension or benefits that was offered at first if you dont take the ERP now. They will start laying people off once they find out who takes the Voluntary ERP. All of this will be done by June 30,2012 end of the fiscal year. I had a feeling back last year that this would take place sometime in the next couple of years...so I started preparing for it a year ago by getting bills paid off etc.

So has anyone taken one before, any advice good or bad. DH retired in July 2011. I wont be eligible for SS because I am only 56

Edited to add, would you be better off taking a lump sum or monthly payments of severance if they offer it. I dont know how they are going to do it yet, like I said I havent gotten the package yet. But we do have a meeting set up on Tuesday.

jwal10 · #2 04/21/12, 03:12 PM

I saw the writing on the wall and forced their hand, they asked, I jumped. I had wanted out for several years, just needed to be 55 so I could take my PERS retirement at the same time. For tax reasons I took a 3 year payout, that July 1st, July 1st last year and this July 1st....James

Ramblin Wreck · #3 04/21/12, 07:51 PM

To determine whether it would be better to take a lump sum or an annuity, you need to make some assumptions using a net present value calculator. Here's a link to one: Present Value Annuity Calculator

Just as an example, I put in an assumed annual pension of $20,000 per year for 25 years with a rate of return of 2%. This annuity would have net present value of $390,000 (give or take a few dollars).

If interest rates go up, the present value goes down. If you live longer than 25 years, the present value goes up.

Good luck figuring out what works best for you and your family.

Micheal · #4 04/22/12, 05:36 AM

As to the severance - it would greatly depend on the amount, how it is offered and condition of the company going forward....... without that info advice is - ahhh - shall we say is as good as what you paid for it.......
Once you have more of the details maybe we could offer better advice?
In any event I do hope things work out for you......

dirtman · #5 04/22/12, 09:13 AM

I'd take the lump sum. I have no confidence that these companies will or can honor any long term financial commitments. Until I retired I never had enough time to get serious about becoming self sufficient. Now I am providing most of the food we eat.

countryfied2011 · #6 04/23/12, 04:32 AM

This is been a long night at work....lol waiting for HR to open so I can see what they are offering. I am excited about retiring for a while, but yet nervous at the same time. I have been operating computers(IBM mainframe) for the last 17 yrs and the breed is dying. I don't have a degree and certainly don't want to start one now. We have so much going on at the farm right now, I really look forward to a lot of canning etc, the garden and just spending time with DH(working nights keeps us apart alot). I don't think you can prepare for everything but I think we will be good. If I do go back to work it will be in the winter time and told DH I might just do the temp thing and be able to work when I want to..lol We will save quite a bit in gas because I drove 45 minutes one way, washing clothes,electric(because I slept upstairs during the day) We have some money saved so that is good also. I am sure there will be those that SHTF..I feel sorry for them and I pray they have a good outcome.

The only thing is what to do with our 401ks. Dirtman, I also dont trust the 401k's either..lol

Thanks everyone...will let you know how it goes.