AARP Hearing Center
Key takeaways
- Review your finances first, as Carly Roszkowski suggests, to assess the true value of any buyout.
- Negotiate with your employer for enhanced severance, extended health care or career transition support.
- Leverage your network and experience to unlock new professional opportunities following a well-planned buyout.
Summary
Job buyouts for older workers can open the door to new professional opportunities, but making the right decision requires careful planning. Carly Roszkowski recommends older employees first review their finances, since buyout packages may be paid in lump sums or over several months. Factor in how long it may take to find a new job and consider whether claiming Social Security now or waiting for a larger monthly benefit makes more sense for your situation. It’s also wise to discuss your options with your supervisor and explore the possibility of negotiating better terms. Many buyout packages include severance based on years of service, but you may be able to request additional payouts, extended health care coverage or career transition support. A well-negotiated buyout can provide financial flexibility and help you make a smooth career pivot — especially if you leverage your network and experience to explore new paths.
The key takeaways and summary were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
Full Transcript:
[00:00:00] Many industries and businesses are facing workforce reductions, sometimes in the form of layoffs or other times through buyouts.
[00:00:07] A buyout is a financial offer made to employees who agree to leave voluntarily. For older workers,
[00:00:13] a buyout can offer some financial flexibility and open the door to new professional possibilities.
[00:00:19] Here are 3 tips for older workers considering a buyout. Number 1, review your finances.
[00:00:26] A buyout may be paid in a lump sum or over the course of a few weeks or months, so plan how you’ll use that money alongside your savings.
[00:00:35] Keep in mind that older workers often take longer to find a new role. You’ll need your buyout money and savings to cover at least 3 to
[00:00:43] 6 months of expenses, so you can remain flexible. If you’re over 62, you could claim social Security to supplement your savings, however, the
[00:00:52] longer you wait until you reach 70, the more money you’ll receive each month. So if you can, hold off to maximize your payments.
[00:01:01] Number 2, talk with your supervisor. If you’re open to leaving, schedule a conversation with your manager
[00:01:08] to talk about your options. By being direct, you may be offered a stronger package, since it can help make
[00:01:14] the transition smoother for the company. This will allow you to plan your departure and begin your job search on your own terms.
[00:01:21] You can also discuss being hired back as a contractor to work on specific projects, which can help you earn income as you look for new work.
[00:01:29] Number 3 negotiate a better deal. Many buyout packages start with 4 weeks of pay, plus an additional
[00:01:36] week for every year of service. Because older workers often stay longer in their roles, you may
[00:01:42] be entitled to a larger payout. Fortunately, there’s usually room to negotiate. For example, you can request a year of severance pay,
[00:01:51] the payout of unused vacation, or what you would’ve received in an upcoming bonus. Other valuable benefits to ask for include extended health care coverage
[00:02:00] through a federal program called COBRA and career transition services that can help you land a new role by providing résumé reviews and job search guidance.
[00:02:10] Just remember, a buyout is not a layoff, so there’s no obligation to leave a company.
[00:02:17] However, this can be your opportunity to leverage the network you’ve developed over the years and pivot to a new career.
[00:02:24] To learn more, visit aarp.org/work.
