Retirement
Hi Terry, I’m at FRE and have considered retirement. Modest savings and other income makes it feasible. Am employed full time with good income and benefits. If employer offers voluntary severance, what factors should I consider? If lump sum offered, what are the tax consequences and what should I do with that money? Thank you!
Terry Says
It’s always a good idea to work as long as you can — and delay taking SS as long as you can — unless you expect realistically based on health or heredity to die younger than the projected ages of 78 for a male, and two years longer for a female!
That said, if a buyout offer comes along, and you think you have enough income and savings to live in retirement (and don’t forget the impact of inflation and the rising cost of Medicare), then you can take the package. Put it somewhere safe (bank cds, money market deposit account). And remember it will be taxed as ordinary income when you receive that buyout. And you’ll want to “roll” any retirement plan benefitrs into an IRA rollover.
This is not a simple question, so this is the time you should meet with a fIDUIARY FINANCIAL PLANNER (someone who is NOT trying to sell you anything)! Find one at www.Wealthramp.comom.
And do that BEFORE you take any deals!
