It is important for every employee to learn how to get an early retirement package. There are various reasons why employees opt for an early retirement package, and a growing number of people are taking this option, but whatever your motivation for getting early retirement, you must make sure that you are getting the best deal from your employer or company. After all, if you have no other alternative source of income after retirement, you will have to rely on the amount you will receive as early retirement.
Below are a few useful tips to keep in mind when getting an early retirement package:
- Know whether you should go for early retirement or not first. Many people sign up for early retirement without considering whether they have enough income for support given their current assets and liabilities. Consider these as well as the financial standing of your company and over-all condition of the industry.
- Take time to carefully learn about your company’s or boss’ policy and your benefits under the law before signing an early retirement package. Ask around about the pension rules, family pension, retirement annuity, employee retirement, and disability retirement benefits your company offers. Request for the Summary Plan Description from your human resource department to get general information on your retirement plans. File a written request with the Plan Administrator to get the details. He is mandated by law to reply within 30 days after your written request. You can ask a lawyer to review the policy for you as well.
- Compare your company policy to those companies belonging to a similar industry so you can get an idea if your policy is good and within the industry standards. You can also talk to friends and others who have opted for early retirement.
- Many companies offer several early retirement options such as receiving your pension by way of a lump sum or on a staggered basis (annuity). Carefully consider the benefits of each option before finally making your choice. You can discuss them with your financial planner.
- Learn the tasteful art of negotiating better terms with your company. Longer severance payments, credit for extra years of service, asking your company to give you the before-tax value of the company match if you have a 401(k), but not fully vested, so you can put the money into an IRA are some of the things you can ask for.
- Demonstrate your efficiency and contributions to the company. Take credit for your achievements, but don’t exaggerate them either. Be candid with your achievements and your needs, bearing in mind that the costs of living increases over time.
- In making an offer, make the amount bigger than what you think is fair because your company will always try to pay you less. By making a bigger offer, you’ll have a leeway for bargaining.
- Find someone who will be sympathetic to your cause and whose opinion matters in the company. For instance, you can turn to a boss who was impressed with your previous performance.
- Plan your life after retirement.
The financial times are very volatile and it would be folly to think that even a valuable employee is indispensable in these tough times. It is best to be prepared and learning how to get an early retirement package is important because you will be living off on it afterwards.