Many participants of pension plans are being offered a buy-out of their retirement plan interest.

The buyouts frequently are structured into three general categories:

• If the company is interested in down-sizing its workforce, it may offer a lump-sum “encouragement” to all or nearly all employees; 
• In some cases the buy-out is for the entire interest—you receive a certain lump-sum amount and you part company, forever, with no future financial obligation or responsibility to you on the part of the employer.  This may involve the loss of health insurance/life insurance benefits;
• The third type involves a “significant” lump-sum and some form of continued health insurance/life insurance benefits.

In many cases, perhaps most cases, the decision is not easy. Answers to some important issues need to be reached:

     -- When do you really want to retire/retire from this position?

     -- Are you eligible for Social Security yet?

     -- Is Social Security included in or is it in addition to your retirement benefit? (Note:  Social Security begun at age 62 is 20% less than waiting to age 65);

     -- How will you provide health insurance?

     -- Will you be paid for any unused vacation time, stock options, or unreimbursed employee expenses?

     -- Will you be eligible for any unemployment insurance, job training, or assistance to find new employment?

     -- Do you have a 401(k) plan?  If there is any outstanding loan, are you required to pay it off upon termination?  (If so, and you do not, you will be liable for Federal and State income taxes on the amount, and if under 59 ½ , you also will have a 10% penalty);

     -- How do you compute if you have enough to retire, especially if some of these funding events and action events occur at different times?

     -- A major question relates to whether couples who will suddenly be spending a great deal of time together are really prepared to do so . . . .

So, while the questions may be relatively simple and straight-forward, the answers are likely not to be.  This is an area where professional, experienced help can provide structure to the decision-making process, and greatly increase your confidence in deciding well.

Professional and valuable help is only a click away!

---

Home  |  About Us  |  Pre-Retirement Planning  |  Defined Benefit Pensions  |

Finding Money  | Long Term Care  |  Life Insurance Checkup  |  Additional Subjects |  Contact Us  |

---

Great effort has been made to assure accuracy of the representations on these pages. It is possible that there may be technical inaccuracies or typographical errors, Improvements, updates, and changes in the materials contained herein or described on this site may be made at any time without notice. Product availability and benefits are subject to various state licensing and regulatory authorities.

Copyright © 2005 Retirement-Income-Solutions.com. All rights reserved.