In today’s economy, offers of an early retirement buyout for a current employee or a pension buyout directed at a former employee are becoming common as companies look for ways to cut costs. Many large employers are offering employees who are not yet at retirement age the option to take an early retirement buyout.
For companies that had a pension plan for their employees, pension buyout offers have become standard practice due to the increasing costs of administering pension plans. Even though pension plans may not be currently part of the employer’s retirement plan, there may be former employees that have the pension plan. Companies have a desire to get the liabilities associated with the pension payments for retired employees off their balance sheets well ahead of their retirement start dates.
Both of these types of offers usually come with several options:
Factors to consider:
With companies experiencing an unknown financial future due to COVID-19, the tariff environment, and the worldwide economy, buyouts may continue for some time. If you receive an early retirement or pension buyout offer, meet with your financial professional to help you evaluate your offer and make the appropriate choice for your personal situation.
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