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.
Want to Blossom?
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…
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.
Need marriage help? Get free relationship advice from Marriage Coach Mort Fertel.
Want to Blossom into who God created you to be? Sign up for my free weekly "Blossom Tips" email!