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Anonymous
06/07/20 at 3:12PM UTC
in
Career

Help! Should I take an early-retirement package or stay?

Perhaps the community can give me some guidance on making this very important decision, because I am at a crossroads and really don’t know what to do. I am 62 years old, single, and a travel-industry professional currently working for an airline. As you know, all airlines are taking a huge hit because of COVID. My company is offering a voluntary early-retirement package which is very compelling, and which I am seriously considering even though I’m not able financially to fully retire yet. If the company doesn’t get enough volunteers to leave (they are offering an early-out package for younger, less-senior employees too), then they will impose involuntary lay-offs. There is no ‘package’ for involuntary layoffs except for a 3-month severance payment. The early-retirement package includes 5 months of severance pay, fully-paid health care benefits for 2-years, followed by COBRA for 18 months, plus a Retirement Medical Account which will give me access to $130,000 in funds to cover all of my medical expenses likely for the rest of my life (funds can be used to cover Medicare and COBRA premiums in addition to prescriptions and doctor bills, medical, dental and vision. Pretty good deal!) However, I will need to work until I reach full retirement age, which is around 4 years. I cannot count on getting another job within my industry, as all of my options are in the same dire circumstances (airline, travel management companies, hotels…). I will need to change industries. Hard enough to do under normal circumstances but harder with my age and the state of the economy. I also will need to earn an annual salary of around $60K in order to cover my mortgage and monthly bills and not dive into my savings account. $60K is a very large pay cut compared to my current salary; I wouldn’t be getting ahead but I wouldn’t fall behind. I figured out a budget where, with the severance pay plus some reserves I can probably stay afloat without a job until the summer of 2021. Not my ideal plan but it could be done. My dilemma is do I choose Door #1, which is a good retirement package, but the risk is needing to find a new, well-paying job. Or do I gamble on Door #2, which is either going to be a complete involuntary separation from the company, or, I could retain my job as is. I should add that there is likely to be a pay cut. My company is youth-oriented so at my age I may be on the list for layoff. I should add that I’m not in love with my current job as a global account manager any more. It has changed from when I started it 15 years ago; I know that I don’t have the same passion or energy and frankly my plan was to stay with it only because of the pay and the benefits. The hours are long (12 hour days + some weekend hours are the norm) and the internal competition is mentally and emotionally draining. My background is in Sales, Account Management, as well as Training, which was my chosen career path that I was pursuing before 9/11 caused me to lose my job. So I do believe that I do have marketable skills, but with so may people looking for work, I feel that my age and my travel-industry career may be serious hurdles. I would love to hear back with any insights, suggestions or words or wisdom that you may be able to share. Thank you in advance!

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Joanne Volpe
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31
Sales Account Manager and Corporate Trainer
06/11/20 at 12:09AM UTC
Thank you to all of the wonderful women here who answered my post! I appreciate you all taking the time to help me wrap my head around this. All of your feedback is so valuable - some validated what I was thinking and feeling; and some made me look at it in a different light, and all offered me some helpful suggestions. I've got 4 weeks until I have to make my decision, so I'll chew on this a little more. Thank you all once again!
MoneyCareerMotherhood
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175
Smart financial decisions for work & home
06/11/20 at 1:33PM UTC
In the time before you must decide, I would network heavily for finding a new job. What skills & knowledge do you have that can be transferred into another industry, and what would you like to do next, if anything? Go there first. Having some perspective on how difficult it will be to replace your current position & income level could help you make your decision, & as you know in the travel industry, even if you're safe today you may not be in further rounds. Building your external network now will be time well spent no matter what.
Belinda Rodman
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49
25 yrs in Enterprise Software Leadership roles
06/09/20 at 8:23PM UTC
This is a generous package and having healthcare for the rest of your life is a huge relief. The savings in cost alone are thousands of dollars. Given that it will probably take years for the airline business to get back to the new normal, they are going to keep cutting to ensure shareholder value and profits. It's a hard decision, and only you know what's feels right to you. Best of luck!
Elianet Oliva
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278
Make things happen!
06/09/20 at 7:36PM UTC
Hi there, as a former airline employee, I would say that I would definitely consider taking the package, what you are describing is a good package, benefits wise and it will give you the opportunity to find something that drives your motivation. You should consider it a blessing in disguise to have this time to develop a different path, it is never too late to find something that is not as draining or doesn't require as much of your time, something that you can provide your expertise, make your budget number and still feel like you are making a difference. Start working in your options, there are a bunch of different companies that offer consulting projects, all the recruiting companies have a side for contract work and you can set your hourly rate. Try Robert Half, Thomas Edwards Group... I know there are more out there, see what they have to offer you, have a plan and go make yourself happy again! Best of luck!
Joanne Volpe
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31
Sales Account Manager and Corporate Trainer
06/11/20 at 12:45AM UTC
Hello elianetoliva. Thank you for taking the time to reply. I appreciate your advice which offers options that I had not considered. Definitely will review these!
Rebecca Lee V
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2.22k
Operations Analyst
06/09/20 at 12:54AM UTC
I would take the package because if you don't they most likely will force you into retirement and you're going to be in a worse situation. You can also start collecting social security to cover and difference. Talk to a financial advisor to help you manage the money and live comfortably.
Leslie Wood
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199
Head of People for fast-growing start up
06/08/20 at 4:16PM UTC
You've been given some great advice for a very difficult decision! In addition, don't sell yourself short - have you ever thought of starting your own business? Perhaps as a training consultant? There are a lot of companies out there that can't afford a full-time trainer but hire people as consultants for various projects. Regardless of your age, your experience is what matters in these cases. The world may be down now and available jobs painfully slim, but the market is already seeing a turnaround. As others have said, don't pigeon hole yourself to just your current industry, think of your skills more than the industry you've worked in. Good luck, you've got this!
Joanne Volpe
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31
Sales Account Manager and Corporate Trainer
06/11/20 at 12:42AM UTC
Hello Leslie. Thank you for your motivational words. You remind me of a close friend of mine - an entrepreneur whom I greatly respect and whose courage I admire. She also has encouraged me to think about starting my own business. I think it takes a lot of fortitude but you and she have both made me think about the options.
Leslie Wood
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199
Head of People for fast-growing start up
06/12/20 at 2:14PM UTC
That's great, Joanne, I'm happy to hear that! Regardless of which direction you choose to go, I encourage you to consider me another friend you can reach out to for advice or to run ideas by. We women must support each other!
Kathleen O
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120
Registered Financial Adviser for women.
06/08/20 at 1:34PM UTC
Dear Travel Industry Professional, I'm sorry to hear about your situation. If you would like confidential professional advice for this critical juncture, please contact me. You can find me easily, via google: Kathleen Owens Fiduciary Financial Advisor Best Regards. :)
Deb Horner
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900
Educating children with cognitive disabilities
06/08/20 at 1:27PM UTC
Take the retirement package - then find something that is fun to do to bring in additional money, and pay for some insurance. I'm headed for 65 at a breakneck pace, and have already signed up for medigap coverage. I'm still trying to decide whether or not to take retirement this fall or give it another year. The last conversation I had with an administrator left me with extremely high blood pressure, and I don't want to start retirement with medication I won't need without the stress of the current environment. Financially, I can manage it, and I'll have medical insurance, so I'm thinking that it's the best option.
Anonymous
06/08/20 at 12:44PM UTC
My father's company did this frequently over his final decade of working. Back in 2015, he retired at 60 due to Alzheimer's. He saw friends accept the package whose jobs were later back filled. He saw friends who didn't accept the package who were laid off on the flip side. At 40, I might take the gamble of staying in the pool and if I lost my job, reinventing myself. At 62, I would probably check with a financial advisor and take the package. Especially given that you do not love your job. My company went through this process last fall and many people of retirement age took the package because it was amazing. One lady a hall over from my cubicle did not because she needed to continue working to care for her grandchild. She was ultimately let go and received a significantly lower severance than she would have if she had taken the package. Best of luck in your decision.
Joanne Volpe
star-svg
31
Sales Account Manager and Corporate Trainer
06/11/20 at 12:39AM UTC
Dear Anonymous - thank you for taking the time to reply and share your experiences and feedback.

You're invited.

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