How to Take a Buyout From Your Company – Tips for Negotiation

What do you do if your company offers a buyout? These tips for negotiation are from finance expert Charlene McNary, who who took a buyout from Chrysler. Not only does she describe how to take a buyout, she explains how to deal with increased income tax levels and what to do after your buyout is signed, sealed, and delivered.

“Depending on the size of the company and how many buyouts are being offered, you may not have much negotiating room,” says McNary.

Even if you can’t negotiate a better buyout from your company, you can start your journey to a life you love! If you have an entrepreneurial spirit, read Wealth Without a Job: The Entrepreneur’s Guide to Freedom and Security Beyond the 9 to 5 Lifestyle. And, here’s how to negotiate a buyout from your company…

How to Take a Buyout From Your Company

A buyout is a severance package offered to an employee in exchange for the employee’s voluntary resignation.

“Good” buyouts should include a cash settlement for at least three months’ living expenses. Buyouts that include medical coverage and bonuses relative to the product or service the company provides always sweeten the deal.  For example, many automotive companies offered some employees vouchers to purchase cars. 

Signs It’s Time to Take a Buyout

Consider a buyout from a position of strength — not of fear of losing money. McNary recommends asking yourself the following questions:

  • Am I still growing professionally at this company? 
  • Am I engaged at work? 
  • Am I looking forward to each day for reasons beyond the paycheck?
  • Do I feel valued and respected at work?
  • Am I proud of my professional accomplishments?
  • Have I become someone I don’t like, am I wearing a mask on a daily basis?

If you take a buyout from your company, you’ll have to learn how to cope with being unemployed.

3 Tips for Negotiating a Buyout From Your Company

1. Offer to take the buyout and return as a contract employee for a few months.  This is a win/win for both parties and gives you time to find a new job or career.

Sign up for my free weekly "She Blossoms" newsletter

One Blossom Tip a week. Short and sweet. You'll love it.

* indicates required

2. Buyouts are considered income, so try to get the employer to pay the additional income taxes for you, particularly if it will push you to a higher tax bracket.

3. If you’re taking a buyout near the end of the year, try to negotiate a payout for the beginning of the next year to minimize your tax penalty. This is very important if the payout will push your earnings to a level that you may have to pay Alternative Minimum Tax (AMT). 

3 Things to Do After Taking a Buyout:

1. Set up a spending plan on day one and be prepared to tell people no.  You’ll be surprised by how many people want to borrow money from you because you have a lump sum!  Fight the temptation to help.

2. Take time out for you and your family.  The buyout is a blessing that provides time to determine which direction to go in.  I visited my Grandpapa, who is 91 years old – it’s the only time we’ve ever spent together, just the two of us, and I’ll cherish the memory forever.  I would never have been able to do it if I’d stayed at Chrysler.

3. See the buyout as an opportunity to make a life change! “The buyout provided me with an opportunity to pursue those things that I longed to do at Chrysler,” says McNary. “I started a management consulting firm and provide strategic planning, business development and financial management services to small businesses. I also coach individuals on how to make money work for them instead of working for their money.”

To learn how to manage your wealth, read 7 Tips for Cash Gifts or Financial Bonuses.
If you have any questions or thoughts about taking a buyout from your company,  please comment below…

Laurie's "She Blossoms" Books

growing forward book laurie pawlik she blossoms
Growing Forward When You Can't Go Back offers hope, encouragement, and strength for women walking through loss. My Blossom Tips are fresh and practical - they stem from my own experiences with a schizophrenic mother, foster homes, a devastating family estrangement, and infertility.

letting go book laurie pawlik she blossoms

How to Let Go of Someone You Love: Powerful Secrets (and Practical Tips!) for Healing Your Heart is filled with comforting and healthy breakup advice. The Blossom Tips will help you loosen unhealthy attachments to the past, seal your heart with peace, and move forward with joy.

miss him book laurie pawlik she blossoms
When You Miss Him Like Crazy: 25 Lessons to Move You From Broken to Blossoming After a Breakup will help you refocus your life, re-create yourself, and start living fully again! Your spirit will rise and you'll blossom into who you were created to be.

Charlene McNary is a strategic financial professional who is committed to helping businesses and individuals move to the next level by making their money their friend.

Leave a comment

Your email address will not be published. Required fields are marked *

2 thoughts on “How to Take a Buyout From Your Company – Tips for Negotiation

  • Laurie Pawlik-Kienlen Post author

    Hi Sherry,

    Negotiating a buyout really depends on your company and what they have to offer. I encourage you to talk to a business coach, employment counselor, or even a lawyer to get specific advice for your situation. The more you can share about the position your company is in, the better advice you’ll get on taking a buyout and tips for negotiation!

    I’m sorry I can’t be more helpful. Congratulations on planning to start your own business — that’s very exciting!


  • Sherry Schultz

    There a roomer that the company that i work for is planning a buyout and I would like to know what the best offer i can get out of the company. I plan on starting my own business. Thank you in advance. Sherry