Being offered an early retirement package may be less traumatic than being laid off, but it will still require some immediate decisions. If you’re part of a pension plan, you may have to choose how your retirement income will be paid. If you don’t need the money right away, you might want to ask if you can postpone income until you reach the regular retirement age.
If you participated in a 401(k) or other retirement savings plan, you’ll want to investigate whether it will be better to start taking income or rollover your account balance into an IRA. It’s wise to discuss the alternatives with your employer’s human resources officer and ask your financial advisor to recommend a retirement specialist.
You also need to check out health insurance coverage. Your employer may provide benefits until you’re eligible for Medicare or you may be eligible for continuing coverage under COBRA under the same terms as people who have been laid off. The one thing you don’t want to do is let coverage lapse.
The good news is that retiring doesn’t have to be the end of your working life unless you want it to be. There are usually no restrictions against earning a salary while you are drawing from a pension unless you’re a state employee who wants to work for another agency covered by the same retirement plan. A new job may also be the solution to the health insurance dilemma—and it may be the perfect opportunity to try a new career.