Episode 12 of the Cordant Wealth Partners’ Podcast Series
Chances are, you or somebody you know, have been offered a separation package from an employer.
Today, Scott shares with us “Rob’s” story. Rob was around age 60 and planned to retire at age 65 when his long-term employer offered him an attractive separation package that would equate to about 2 and 1/2 years salary, a bonus, plus a year of paid health care. Some of Rob’s concerns were getting his children through college without acquiring debt and maintaining his and his wife’s current lifestyle.
Scott walks us through the objectives that need to be considered, accounting of balance sheets, reflecting on liabilities, and the probability analysis. He also goes into detail about the baseline plan: which is, what do the next 5 years look like if Rob were to take this offer? Scott analyzes the success or failure of Rob’s plan. Follow along to find out Rob’s decision!
- Considering objectives: Getting children through college, maintain the current lifestyle, etc.
- Having a detailed cash flow in place
- Agreement on assumptions
- Accurate accounting of balance sheets
- Reflecting on liabilities
- Probability analysis
- Concerns about paying for health care, pre-Medicare
- Covering tuition without dipping into retirement accounts
- Baseline plan – what do the next 5 years look like if you take this package?
- Some expenses would have to be paid in alternative ways
- Adding inflows and outflows, and making sure that taxes are right based on the value of separation package
- Analysis reveals the success or failure of Rob’s plan
- Additional help with taxes?
- What to do with the stock?
- Flexibility in charitable contributions
- Donor-advised fund