Author Topic: Severance pay from company.. should I do it?  (Read 2481 times)

seeking_north

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Severance pay from company.. should I do it?
« on: March 02, 2016, 03:12:36 AM »
Well, my company is offering severance pay for those who want to quit. Its a Forbes 100 company..

I will recive 15 months of pay, but taxes will bring that down to 55-60%. So, say 8-9 months.

Based on excange rates etc etc, I have:
$210.000 in 80/20 index fund / bonds
$25.000 in liquid assets ( bank )
$60.000 in buy out and monthly salary until August, when my contract would end.

Montly expenditures
$1500 ( housing is very expensive ). Would live in a cottage if I could persuade my partner to do so ;)

No formal education, 33 years old, 60% finished Bachlor in Economics. Dont like or love the work I do now, but it paid OK.

Current work, manaul labour.
$60-80.000 a year, fluctuates due to paid overtime.



My thinking was:
The buy-out money, could "support" me for three years, until I either got a new job, started building/selling items, or finished my Bachelor.

How long could I live of the money I have and recive?


Lots of ideas running through my head now.. only have 4 more days to decide on.

arebelspy

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Re: Severance pay from company.. should I do it?
« Reply #1 on: March 02, 2016, 04:48:23 AM »
You do manual labor for a Fortune 100 company?

What do you think the average length of time getting a new job would be?

Seems like a good situation to me--take it, and take a sabbatical for awhile if you want, or take it and find other work ASAP and consider it a nice bonus.

I've heard stories too many times of people not taking severance, seeing some coworkers do it, then getting laid off on worse terms shortly thereafter anyways.
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Uturn

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Re: Severance pay from company.. should I do it?
« Reply #2 on: March 02, 2016, 06:46:34 AM »
I would always take the buy out, then go find another job, or use the money to fund education or new job training.

I've also seen too many companies screw folks later for not taking it. 

plog

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Re: Severance pay from company.. should I do it?
« Reply #3 on: March 02, 2016, 07:20:21 AM »
Quote
Well, my company is offering severance pay for those who want to quit.

It's always nice when a company gives you a heads up that things are going to turn to shit in the very near future. When company's make this offer people either think it won't be as bad as the rumors, or they think somehow they will be the lucky ones who stay on after the layoffs finally arrive.  Take the money and run.   

little_brown_dog

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Re: Severance pay from company.. should I do it?
« Reply #4 on: March 02, 2016, 07:35:37 AM »
If the money can support you sufficiently for 3 years, I would definitely take it. It sounds like a great deal, and as others have mentioned, there is a decent chance that you will be laid off anyway with a less generous package. Three years should give you plenty of breathing room to find some extra work to supplement your severance income while you finish your bachelors.

I'm a red panda

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Re: Severance pay from company.. should I do it?
« Reply #5 on: March 02, 2016, 07:41:09 AM »
How long do you think it will take you to get a new job?  How long do you think it will be before your company has involuntary layoffs and you have to find a new job anyway?


I'd take it. 

SeanMC

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Re: Severance pay from company.. should I do it?
« Reply #6 on: March 02, 2016, 07:47:41 AM »
If you have no specific attachment to this job (they could fire you tomorrow, there is nothing special about it), and you have the ability to get work within a few months, then this sounds like free money.

I'd say take it.

DebtFreeBy25

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Re: Severance pay from company.. should I do it?
« Reply #7 on: March 02, 2016, 07:59:30 AM »
I've heard stories too many times of people not taking severance, seeing some coworkers do it, then getting laid off on worse terms shortly thereafter anyways.

This is an excellent point. Ultimately you may not have a choice in whether or not to seek a new job. Presumably if they don't get enough people to take the voluntary severance, they're likely to start the lay offs or even worse, a reduction in force (permanent lay off) very soon.

It sounds like you've been with this company for a while and stayed because the compensation was decent. My husband was in a similar position having worked a well-paying job that he didn't like until he was laid off. I encouraged him to get out before the situation totally went to hell, but he wasn't especially interested in taking a significant pay cut to work elsewhere (no severance offer or any other incentive). While I don't know your specific market, it would probably be difficult to get a comparable job that pays anywhere near what your current one does. This isn't to discourage you from taking the buy-out but rather to encourage you to have some sort of plan in place for what you'd like to pursue next. An extended gap in your employment history isn't going to look good even if you have a perfectly reasonable explanation.