Wednesday, 8 August 2007

Should You Take An Early Retirement Offer?: By Mike Taylor

The day has finally come, you are offered an early retirement package from your company and now you need to decide if you should take it or keep working a few more years.

The first thing to remember is that your company is not doing this out of the kindness of their heart to help you have a more leisurely retirement. Instead, they have crunched the numbers and decided it would be less expensive to "buy you out" than keep you on the payroll those extra years.

In fact, many times this offer is really not an option at all and the alternative to not taking an early retirement is a layoff or termination without any benefits so be sure you fully understand what's at play here before making a decision.

If you have been planning for your retirement you should be in a good position to evaluate the offer to see if it is something you should accept (if you have a choice that is). Many times a company will have an attractive offer for you that will include full health benefits until you reach legal retirement age.

Most people don't realize that like many other things in life an early retirement package can be negotiated. Be sure and do your homework before you begin any negotiating with your employer. Determine what your financial needs will be between now and when you would have retired and make sure the package will cover them.

Always ask for more than you need and negotiate from that point but be realistic. Try and find out what others might have been offered in the past at your company and research what someone in your position and industry should receive.

Be sure and note any financial hardships or shortfalls the offer might create and have ready a list of your contributions to the company over the years to prove why you are worth more money.

Ask yourself what you are giving up by taking the early retirement offer as far as future benefits are concerned. Will you miss the company matching amounts in your 401K plan? Do you depend on bonuses as part of your income? Is your job your life and you wouldn't know what to do with yourself?

Maybe you welcome the chance to retire early and start something new and the extra benefit to be gained from working a few more years just isn't worth it. Or perhaps you are tired of the stress and day to day grind of work and wouldn't mind entering the next phase of your life a little early.

Before making your decision make sure you have thought through all of the pros and cons of taking an early retirement offer and don't be afraid to ask for advice from people you trust.

For more information about early retirement planning please visit About Your Retirement

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