Here's When You Should Accept An Early Retirement Offer

Buyouts are on the rise. This is what to consider if offered one.

- Matt Krantz

IF YOU’VE BEEN LOOKING TO make the math work on early retirement, you just might get your wish. Drugmaker Pfizer and automaker GM announced buyout offers this past fall for longtime employees, and experts say there could be many more to come.

In 2018, companies announced plans to cut 46,100 jobs owing to voluntary severance, which includes buyouts and early retirement offers. This is up considerably from the nearly 5,000 buyout offers and early retirements in 2017, says Colleen Madden Blumenfeld, spokeswoman for job placement firm Challenger, Gray & Christmas.

If you’re 55 or older and have spent a decade or more at your company—common thresholds for buyout eligibility—it’s best to be prepared if such an offer comes your way. And there’s one key driver you need to be aware of.

“The No. 1 thing we look at for a buyout, before you take it, is ‘Do you have a plan for where your income will come from?’” says Michael Foguth, president of Foguth Financial Group, a financial advisory in Brighton, Mich., who helped Ford employees evaluate a buyout plan offered in 2017. “If you’re not getting a paycheck every two weeks, you have to create your own paycheck.”

The nine-year bull market for stocks and low unemployment have put many people in a position to take a buyout. Here are signs you might be able to do it: