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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19378  
Subject: Accidental Retirement Date: 4/28/2005 7:37 PM
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There's a possibility I will be early retired by my employer of nearly 16 years, in the near future.

Traditionally, they've offered a good severance package which includes salary and full benefits through a period lasting two weeks for every year of service, so in my case, 32 weeks.

My pension will begin at age 55, which is still some years away.

I'd appreciate hearing from anyone who has been early retired, rather than calling their own shots.

We're hearing rumors they will try to relocate some people half way across the country in order to avoid paying a severance package.

Have you seen this happen? If so, what options were you given?

We're also hearing they will cancel the pension plan and give us a lump sum - presumably to roll over into the existing 401K?

I am still trying to anticipate and plan ahead for all possible scenarios, but since I can't predict what will happen - it's hard to do.

Hence, I would appreciate hearing what others may have experienced in similar situations.

Thank you, MG


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Author: Quakeboy02 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9739 of 19378
Subject: Re: Accidental Retirement Date: 4/28/2005 8:10 PM
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Hi MG,

I was severed a couple of years ago with a plan that sounds suspiciously like yours. Before I was able to collect, I had to sign a non-disclosure paper, so think about that. They didn't cash me out of my pension. I think that has a bit less than a year's salary in it. Since they filed that I was excess to their needs, I was able to collect unemployment. So, keep that in mind. At this point, I remain unemployed, but that's due to medical issues. Good luck! And especially good luck in finding a replacement job in this market.

Hedge

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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9740 of 19378
Subject: Re: Accidental Retirement Date: 4/28/2005 9:33 PM
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Sorry to hear this Mary. I was forcibly retired at 55. I wasn't prepared. Fortunately I found work again, so I am still working (actually approaching a second retirement.)

I took the lump sum, and converted it to an IRA, figuring that my mutual funds would do as well as theirs, and I then had control.

You don't say if you are prepared to retire, prepared to move, or such. That would have a huge impact on the decision, no?

Best of luck. Let us know what you decide and how it works out?

cliff

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9741 of 19378
Subject: Re: Accidental Retirement Date: 4/28/2005 9:41 PM
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MaryGoodnight writes,

There's a possibility I will be early retired by my employer of nearly 16 years, in the near future.

Traditionally, they've offered a good severance package which includes salary and full benefits through a period lasting two weeks for every year of service, so in my case, 32 weeks.

My pension will begin at age 55, which is still some years away.

I'd appreciate hearing from anyone who has been early retired, rather than calling their own shots.

We're hearing rumors they will try to relocate some people half way across the country in order to avoid paying a severance package.

Have you seen this happen? If so, what options were you given?


That's nothing. When I worked for Exxon, they used to tell the people they wanted to get rid of that the only thing they had for them was a job in Saudi Arabia.

A few people questioned whether the Saudi job even existed, since everyone who was offered it quit, they never had to actually fill the position.

intercst

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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9743 of 19378
Subject: Re: Accidental Retirement Date: 4/29/2005 6:53 PM
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Thank you for the comments and information.

Here's a little more background -

There is some fortuitous timing associated with this merger and potential layoff. I've been wanting to make a change anyway and fear that if I end up staying, I'll get caught in the trap of either wanting to wait until I am eligible to start drawing pension payments at age 55 or getting laid off when I am older, say nearing 50 when I won't be as likely to make a radical change as I am now *or* will face an increased likelihood for age discrimination.

I am currently 44 and if I leave, I obviously won't get a full pension, but I am willing to trade that for the chance to do something new.

What this new thing is I haven't yet decided. I've been LBYMing and building a nest egg for several years, so I may even take some time off, better still if I have an 8 month severance package. I may downshift to part time or contract work, I just don't know yet. The job market for my skills remains fairly competitive - my work is loosely related to homeland security.

The main purpose of my post is to try to predict the unpredictable. In the new business model, corporations are notorious for trying to screw their employees, if you'll excuse my coarseness here.

I found out today that under the *current* separation plan, I am eligible to receive a separation package, unless they offer me a comparable job within a reasonable commuting distance. These terms are subjective, nevertheless, my specialty within the company is pretty narrow, so it would be hard to offer a comparable job - for example, you can't ask an attorney to go work in the engineering dept.

Reasonable commuting distance is tricky in an area with notoriously bad traffic!

If asked to move to a new city or state, employees will be paid relocation costs, so I do find it somewhat hard to believe they would pay relocation costs in order to avoid severance costs - at some point, there has be an analysis of the difference to avoid silliness.

As far as receiving a lump sum payoff of my accrued pension balance, I'll need to pull out my plan documents and check the pension calculation formula, then check intercst's website to see what common benchmarks are used to convert the value of that income stream into a lump sum amount.

If they try to get out of offering me a severance package or try to lowball the value of my benefits, I want to head them off at the pass. I know, I know David and Goliath...

Thanks again, MG





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Author: Quakeboy02 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9744 of 19378
Subject: Re: Accidental Retirement Date: 4/29/2005 7:12 PM
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Reasonable commuting distance is tricky in an area with notoriously bad traffic!

For us, it was 50 miles. Yeah, in LA, that's reasonable.

Anyway, good luck, however it works out.

Hedge

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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9746 of 19378
Subject: Re: Accidental Retirement Date: 4/30/2005 6:51 AM
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Thanks Hedge. Looks like I need to read the Gillette Edmunds book listed in your profile!


MG

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9747 of 19378
Subject: Re: Accidental Retirement Date: 4/30/2005 2:28 PM
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Mary, sorry to hear about your worries, but good for you for being heads up and aware.

So many in their 30s go on aimlessly never realizing that their employability might one day be limited. Hence, you are very astute to be planning ahead. The key question is what do you do when you realize that the job you have or the company you are working for is not likely to survive unti retirement age.

One thing for sure is to work over those early retirement numbers and make sure you have a decent plan in place. Save, save, save. You will need it.

So many poor so and sos wind up losing their jobs while they still have a mortgage to pay off or still have kids in college (or worse in high school). Most of them do manage to come up with another job, but good paying jobs can be difficult. Most have to scramble.

Yes, the fine print on the severance packages usually do say no offer if you are offered an "equivalent" job. Of course moving costs for a homeowner can be over $30K these days. So its risky to make that offer unless severance pay would be at least double.

I hate the companies who think they must constantly stir the pot to keep professional employees on their toes. This makes for endless stesses that I think contribute little to productivity. If you are stuck working for a company that thinks this is "good management," I would suggest you get your house in order and serious consider taking the first package you are offered.

If you have your finances in place, the job stresses at such compsnies are really not worth the hassle. No body puts up with such stuff unless they have to. So uncouple those handcuffs and go find something where your efforts are appreciated.

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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9748 of 19378
Subject: Re: Accidental Retirement Date: 4/30/2005 4:00 PM
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Thanks Paul, I do have lots to think about and plan for.

Today I've been reviewing and comparing the differences between
the voluntary separation and involuntary separation plans.

I checked your profile. Are you from upstate NY?


I'm curious since I was raised near the Catskills.


Mary

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Author: DorothyM Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9749 of 19378
Subject: Re: Accidental Retirement Date: 4/30/2005 4:16 PM
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...consider taking the first package you are offered.


The first offer is always the best. They never get richer. I was at an ad agency in the 80s and hung around for more than 6 months waiting to get laid off. It worked and I got a terrific package (and had a wonderful time being unemployed for a while). The very next layoff 3 months later was puny by comparison. Further, in the first cut you can often negotiate some little things.

My current company has never, ever had a lay-off. Even when they fire someone for incompetence they offer another job. So this year when they put out a severence policy for the first time ever, I started to wonder. And I'm ready to jump into retirement the minute someone waives an offer under my nose.




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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9750 of 19378
Subject: Re: Accidental Retirement Date: 5/1/2005 2:24 PM
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<I checked your profile. Are you from upstate NY?


I'm curious since I was raised near the Catskills.>Mary

My Eckler roots are from the 1710 Palatine migration that landed in East Camp and West Camp, near Catskill. I have been there many times for family tree research, but my branch of the family took off for Missouri right after the Civil War. I'm from Missouri but have lived everywhere: St. Louis, Oregon, Indiana, Baltimore, Washington, DC, and now NJ. Have travelled extensively on business.



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Author: PKnudsen Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9752 of 19378
Subject: Re: Accidental Retirement Date: 5/5/2005 2:33 AM
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Real sweethearts, these big companies, aren't they.

I got out at 57 and got a pension and health care (with deductables going up every year). Just as well, as I heard they later cancelled the pension plan.

Well, (to any younger workers reading this) it shows you can't expect private corporations to take care of you (unless you're a high-up executive of course!) so if you can't get a union started to protect your rights, you'll just have to take care of your own retirement somehow.


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Author: ep0001 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9754 of 19378
Subject: Re: Accidental Retirement Date: 5/5/2005 8:23 AM
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Well, (to any younger workers reading this) it shows you can't expect private corporations to take care of you (unless you're a high-up executive of course!) so if you can't get a union started to protect your rights, you'll just have to take care of your own retirement somehow.


Samw applies to Social Security



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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9755 of 19378
Subject: Re: Accidental Retirement Date: 5/5/2005 12:35 PM
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"you'll just have to take care of your own retirement somehow."

I think this is the reason IRAs and 401Ks were created in the first place. The funds going into Social Security are increasingly diverted to benefits for the poor and disadvantaged. Ie, those who minimally qualify for coverage do quite well in their overall SS payout. Its those of us with decent paychecks who max the SS limits most of the time who have trouble getting our money back from SS (and it sure looks like its going to be worse in the future).

This is a very good reason to plan ahead. Fund you own retirement from savings and investments. And be ready to retire earlier than planned if those circumstances come up.

Otherwise, you are destined to struggle to make ends meet--typically under paid, often under employed, usually under appreciated. Just working for a paycheck until you can retire. This is definitely a bad deal!!

What a life. Humans deserve better. I like the S. American line: work is for animals.


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Author: Trini209 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9756 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 7:03 AM
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The problems of not saving for one's own retirement are compounded by the fact that Americans are having their children at a much later stage of life than they used to.

My generation tended to have babies in their early to mid twenties. By the time we were in our mid forties, or at least by age 50, the kids were out of the house. We still had 15 years or so - and the knowledge and maturity - to save up some money before retiring.

Today's kids spend their 20's and even their 30's spending their entire incomes irresponsibly (my standards) on cars, vacations, gadgets, restaurants, etc. Their children arrive when they're in their late 30's and into their 40's, and those late babies are often still dependents when their parents are of an age to retire.

I had my 3 kids early, 2 of them when my husband was still a student, and I learned all about living frugally - we ate at home, drove second hand cars, fixed up old furniture, I sewed our clothes. When it came time to take a vacation, we packed up some camping gear and took the kids to $2/night campgrounds, or exchanged visits with old friends, sleeping on their floors. We never felt deprived.

Trini

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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9757 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 9:07 AM
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Since state laws vary, I'm not sure if there's a general rule of thumb regarding this question, but I thought I'd throw it out there anyway -


When it comes to unemployment benefits, does it generally matter whether you take a voluntary separation package or involuntary separation package?


Thanks, MG

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Author: DorothyM Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9759 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 9:36 AM
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When it comes to unemployment benefits, does it generally matter whether you take a voluntary separation package or involuntary separation package?

I can speak only of New York, but there are a few things to consider which might be helpful to you. Here it was important to take my money as a lump sum. Otherwise I'd technically still be employed and drawing a salary. Further it's important to handle any vacation pay carefully so that your unemployment is not delayed while you're technically "on vacation." You must make it clear that you had no plan when you left your employment to take a vacation and are not now on vacation. I had to sign a statement so that benefits were not delayed. If you plan any classes it must be very clear that these classes do not interfere with your job hunting. You cannot here in NY collect while setting up your own business, however, any job hunting work you do might "accidentally" result in the establishment of a free-lance consulting career -- it all depends on how you describe it.

A lot of people -- 'though I'm sure not our Mary :-) -- go into the unemployment office rather defensively and with great sighing and rolling of eyes and raising of eyebrows make it clear that they are unaccustomed to dealing with such stupid and bureaucratic bumblers. I've collected twice and the first time I noticed as I waited in a very long line that the workers could make your experience very easy or very difficult. Being polite and patient goes a long way toward greasing the wheels. The people who work in there know the ins and outs of the system and you want them on your side. End of lecture.

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Author: BrerBear Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9760 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 9:51 AM
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I sewed our clothes. When it came time to take a vacation, we packed up some camping gear and took the kids to $2/night campgrounds, or exchanged visits with old friends, sleeping on their floors. We never felt deprived.

Trini
====================================
Hmmmm.... Were your Mom and my Mom sisters?...

Sure sounds familiar!...

[We never felt deprived, either...]

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Author: rosewine Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9761 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 9:52 AM
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When it comes to unemployment benefits, does it generally matter whether you take a voluntary separation package or involuntary separation package?

As you say, every state probably differs and the best way to find out the answer is to call your state. In Oregon, I was able to begin drawing unemployment immediately, even though I was still on payroll for the severance package for almost three months. The key for them was that the job had ended with no possibility of recall.

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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9762 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 10:29 AM
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I'm in Virginia and I've already called the state unemployment office.

Their response was that I should wait until separation from the company, then apply for benefits, then they would decide whether I qualified or not.

This has prompted my posts/questions as to possible outcomes based on the experience of others.

It's somewhat challenging to plan ahead when bureaucracies such as governments and corporations hold back their own loopholes and surprises.

Thanks again, MG

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9763 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 1:43 PM
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The issue of volutary separation and unemployment seems complicated, and it is not uncommon for some people from the same layoff to be get different answers--probably depending on how they answer the questions.

In general, if you volutarily leave your position, you are not eligible for unemployment compensation. If however, you are offered a package and your position is eliminated, you can sometimes collect. Its a gray area. It probably depends on whether your employer is willing to back up what you tell the unemployment office.

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Author: mendomann Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9764 of 19378
Subject: Re: Accidental Retirement Date: 5/6/2005 5:15 PM
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so if you can't get a union started to protect your rights, you'll just have to take care of your own retirement somehow.

Yes, and the government is not making it any easier wanting to take away the gauranteed benefit of Social Security with Bush's new plan to privatize.



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Author: readyteddy Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9765 of 19378
Subject: Re: Accidental Retirement Date: 5/7/2005 3:40 PM
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I agree with Trini to a certain extent when she says "Today's kids spend their 20's and even their 30's spending their entire incomes irresponsibly (my standards) on cars, vacations, gadgets, restaurants, etc."

But there are also a lot of people who spend their twenties and thirties acquiring advanced degrees and the student loans that go with them just to get entry level jobs.

It's wierd.

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Author: PKnudsen Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9766 of 19378
Subject: Re: Accidental Retirement Date: 5/9/2005 1:43 AM
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Social Security was never intended to be the sole retirement income for anyone. It has turned out that way for many. All the more reason for it to be beefed up.

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