Often called early retirement, voluntary severance or buyout packages, such deals often target people with seniority, a group that tends to earn higher salaries. “Accepting a buyout offer can mean lower Social Security benefits, lower pension benefits, and increased early 401(k) withdrawals," said Mr. Hylland. If you put your 401(k) contributions on hold or have to tap your retirement savings early to make ends meet, estimate how much less you are likely to amass for retirement. Revamping your retirement planIf you decide to take the offer, consider ways to minimize potential damage. “A guaranteed 8% annual boost from delaying Social Security is tough to match," said Mr. Hylland, who recommends putting off claiming, even if that means tapping retirement accounts or a pension early.

Source: Mint October 09, 2020 02:03 UTC