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Considering an early retirement buyout. Here are 3 questions to answer before deciding to stay or go
Is my buyout package taxable? Yes. Severance is ordinary income, taxed in the year you receive it. And if the payout lands as a lump sum on top of a full year's salary, it could push you into a much higher tax bracket and you could lose 30% or more before you see a single dollar. That's the first number most people miss when they're evaluating an early retirement buyout offer and trying to decide to stay or go. And the tax hit is just the starting point. The harder questions are what happens to your health insurance before Medicare kicks in at 65, and how does this impact your retirement projections over the next 30-plus years, if you stop contributing and start withdrawing five years earlier than you planned. Those two things can change the math more than the severance number itself. Companies are moving fast right now. Oracle just cut thousands. A lot of executives and senior employees are getting 60 days to decide on packages they've never had to think about before. The answer isn't always take it. And it's not always walk away. You need to model this out with the real numbers and longer term considerations, and not just the headline number, before you decide. Because a $200,000 lump sum might sound like a lot until you do all the math. If you’re deciding on a package and not sure what it might actually be worth, or simply want a second set of eyes before the deadline, send us a message. Link in bio. #EarlyRetirement #SeverancePackage #RetirementPlanning #FinancialPlanning #FinancialAdvisor #BuyoutOffer
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