Updated: 7/4/18 - Should I stay or should i go (severance in five months)

[ChandraNH]

Looking for some thoughts:

I'm in a pretty well paid ($103K base plus annual bonus and travel stipend) position in my company that is being eliminated 11/1/17.  I have until then to find different position within the company and if not, the need for severance will be determined on a case-by-case basis (this has to do with office of record location, see below). I've been with the company for 19 years.

The problem?

There are very few jobs in my organization in our location. the company is headquartered in the Northeast and I live in the Midwest.  I currently travel 80%.  there are approximately 20 of us losing our positions, most are in areas with more opportunities within the company, but there are at least 3 of us in locations where our former robust presence has been eliminated as the company pulls more work to the home office areas.

The pays for my current location is much less than what I make now, considerably less I think.  I've researched various jobs (I have a wide skillset) on glassdoor and I'd likely take a 30% pay cut.

The choices:

Do I:

stay on with the company, posting for any positions that come available in my area (that I may or may not want) through the end of October, to get the likely severance.  I would likely get severance in the amount of 39 weeks of pay, plus 6 weeks of vacation pay cashed out.  Severance is paid out bi-weekly as though you are still on the payroll.

or

start looking for a local job now as postings come up for jobs I'd really like to do, even if they pay 30K less than I'm making now? Is it worth securing something now, but losing out on severance (in the event they lose their minds and try to get out of paying severance) or winding up taking a job at the same pay, within the company, but doing something I don't love?

There are plenty of local jobs in my current field as well as past fields that I am qualified to perform.

Additional factors: 

My husband makes about 40K more than I do, so moving right now isn't an option unless something fantastic opens someplace and he doesn't want to live any place I'd want to move to and vice versa.

We can live on my husband's current salary and still max out his 401K and save additional money beyond that.  We have one car payment and one mortgage, no kids.

So, what would you do and why?

Thanks!

UPDATE: 7/4/18.

Officially laid off, but not until April of 2018.  The company kept dragging it's feet, which kept us in limbo, on a paid vacation of sorts, since we had no work to do and all just worked at home with a check in once a week, but at full pay, so not complaining.

I started looking for jobs in August 2017 when I thought I'd be done in November.  Fortunately? nothing came of it and then I landed something starting two weeks prior my last day with the company.  With my manager's permission (he was being laid off as well...) I took some FTO and started the new job.  A slight pay cut of about 15% (from 103K), working from home and life's not too shabby.  Really enjoying the new job and the severance I'm also receiving.

Taxes are going to be a witch however as we already max out our 401K.

[marty998]

How close are you and your partner to FI?

That severance payment is pretty chunky - 5 months is not a long time to wait for it.

If you get a new job in November at a 30% pay cut, then you can think of the severance as topping up your wages for 3 years....

[wordnerd]

It's hard to know for certain without specifics and knowing how close you are to FIRE (or if you want to RE). But, my inclination would be to try to take the severance and use that time to figure out what you want to do next. If you're close to FIRE, maybe think about downshifting if that's something you're interested in. Depending on your goals, it might be worth finding a lower stress (or more creative or whatever) job if you're going to make significantly less anyway.

[Aggie1999]

You can live on your partner's wages, there are plenty of jobs in your local area available, etc. I'd take the severance in a heart beat.

[pbkmaine]

Take the severance.

[ChandraNH]

Thanks all.

Using all the RE calculators, we have a 95-99% chance of success of pulling $40K per year, but that includes factoring in reduced SS for each of us (reduced to $1K per month for each, that is $500/each less than our estimates) at age 62 (He's 7 years out from that and I'm 14 out)) plus my estimated pension from work in the amount of 19K per year at age 65 and our 401Ks which are at about $525K. 

We could have our home paid off in about 3 years if our take home pay remains the same (we both max or near max our 401Ks).

I guess I'm just afraid of waiting for severance and missing out on interesting jobs that come along, but I see where you're all coming from  as that severance would top off a lower-paying job.

[markum9]

You can also split the difference and then it's really only a 3 month delta.  You could start applying to jobs around September 1st, and by the time you would have gotten through the interview process and accept an offer, you could define your start date to be after 11/1.  So I would definitely consider waiting it out to get the severance.

[JLee]

I would absolutely take the severance.  It's $77,250 for free.

[birdiegirl]

Another vote to take the severance!   That is a significant amount so I'd think its worth sticking it out a few more months.  Once you get that then you can start looking for another position. You'll be in a better position to take something paying less if you can take advantage of the severance and vacation payouts. 

[neil]

I guess I'm just afraid of waiting for severance and missing out on interesting jobs that come along, but I see where you're all coming from  as that severance would top off a lower-paying job.

I don't think it would hurt to look, because you might fall into something amazing - but I would want to be convinced.  If someone really wants you, a signing bonus could be on the table to close the gap (though probably not if a pay cut is expected).  Worst case, you discover what the market is offering while waiting for your current position to close and give some thought on the next stage of your career.

It sounds like you are fine either way financially, and sometimes the time off gives you clarity that you might not find when in the regular flow of work and life. 

[Dave1442397]

Just check on the severance payout. I work for a large corporation that pays severance on regular paydays, but they only pay it until you find another job. If you had worked here for ten years and got 20 weeks severance pay, but found a new job within a month, you lose the remaining 16 weeks severance.

[Aggie1999]

Just check on the severance payout. I work for a large corporation that pays severance on regular paydays, but they only pay it until you find another job. If you had worked here for ten years and got 20 weeks severance pay, but found a new job within a month, you lose the remaining 16 weeks severance.

Wow, that sucks. Serious question: How do they find out you have a new job? Seems like that would violate a bunch of privacy laws/regulations (at least in the US).

[Aggie1999]

You can also split the difference and then it's really only a 3 month delta.  You could start applying to jobs around September 1st, and by the time you would have gotten through the interview process and accept an offer, you could define your start date to be after 11/1.  So I would definitely consider waiting it out to get the severance.

+1. Multiple people I have worked with have done this. I know of one that was laid off on Friday and started her new job on Monday.

[caracarn]

You can also split the difference and then it's really only a 3 month delta.  You could start applying to jobs around September 1st, and by the time you would have gotten through the interview process and accept an offer, you could define your start date to be after 11/1.  So I would definitely consider waiting it out to get the severance.

+1

I just did this before the job I have now.  They wanted to make the management role I was in much less pay.  They offered me to stay on in a new role that would still be a good pay cut or I could take a severance that was basically 5 months (I negotiated a month for every year I was there), plus by banked up vacation of 240 hours.  I started looking about 6 months before my end date.  Still ended up having about 6 weeks unemployed time in between as it took a long time to find a job, but was able to bank basically the 5 months of pay while working my new job.  I would absolutely not wait until you are let go to start looking.  I had a good amount of activity almost constantly as I was looking but too many things that seemed like sure things where I got called back for second and third interviews and then ended up getting told I was overqualified and they were worried I'd be bored.  If that was going on while I was burning through my severance, it would be a very nervous time indeed.  We still have a long way to do until FI with all our kids, so my situation is different than yours, but just putting it out there as I think it is prudent to look as it regularly takes longer than you would think to land something, especially if you are up there in experience, as there are fewer of those types of positions that come up and starting a job search at the end of the year nearly guarantees you'll be sitting around wasting weeks of time with few jobs available since hiring usually slows substantially between Thanksgiving and New Year as people go on vacation and wait for next year's budget to kick in. 

[Dave1442397]

Just check on the severance payout. I work for a large corporation that pays severance on regular paydays, but they only pay it until you find another job. If you had worked here for ten years and got 20 weeks severance pay, but found a new job within a month, you lose the remaining 16 weeks severance.

Wow, that sucks. Serious question: How do they find out you have a new job? Seems like that would violate a bunch of privacy laws/regulations (at least in the US).

I don't know how they figure that out. I only know one guy who bothered getting another job after he got laid off, and he waited a year before even looking. He has so much money stashed away that he doesn't really need to work. The others all retired, so they just took the money until it ran out.