• Diane Young, President

Early Retirement Packages


Many companies are restructuring and offering employees early retirement packages. For many, this comes as a complete surprise and shock. For some, the whoops of joy can be heard for miles. But, job change whether expected or unexpected can be a very stressful time. Here are some financial tips on how to handle it.

First, take a deep breath and calm down. Reading these packages can seem daunting so don’t be afraid to ask for some help and advice. Make sure you understand the consequences of accepting the package (If it is a voluntary package). For some, it may mean a complete break with your current company while others may be able to retire, lock in some benefits and then continue to do some contract work for the company. You may need to consult an attorney if there are non-competes involved that may impact your ability to seek another job.

Next, assess your financial situation. How much money do you need to run your household on a monthly basis? How much will your severance package cover? When do you need to find a job or start drawing retirement benefits like social security or pensions? If you have a spouse, how will this impact them? A big question for many is health insurance. You should be able to continue your coverage through COBRA, but it will cost you a bit more than the company was paying for it. However, if your family has significant health issues, it may be prudent to do so. Otherwise, you can check out potential health insurance costs by going to healthcare.gov and doing an estimate. It will at least give you a ball park idea of how much money you need to budget for costs. And believe it or not, it is a pretty easy to use website.

Now look at your investments and retirement accounts. If you monthly expenses are going to exceed your income, you may need to develop a strategy for taking income from them. That is where working with a knowledgeable investment professional comes in handy. You can develop distribution strategies even from retirement accounts before you are 59 ½ if you use what is called a “72t” distribution method. It allows you to take money out of your IRA’s without penalty. However, this is definitely one of those “Don’t do this without professional advice” types of things. One little mistake can end up costing a lot.

With a little planning, getting an early retirement package can be a blessing. It could allow you to reassess your career and life and now focus on some area’s that will bring more meaning to your life.

Diane L. Young is the President of The Athena Financial Group an independent fiduciary financial planning firm in Michigan. To arrange an appointment please call 248-453-5252 or email diane@theathenagrouponline.com

Advisory and financial planning services offered through Athena Advisory Services, Inc. a registered investment advisor.

#Earlyretirementpackage #financialplannign #DianeYoung

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Advisory services offered through Athena Advisory Services, Inc. A Registered Investment Advisor. Tax Planning and Insurance Services offered through the Athena Financial Group.

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