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Sample Early Retirement Packages: Should You Accept?

Wondering if an early retirement package offer from your employer is the best option for you? Should you accept the deal? Let’s take a deep dive — we’ll even look at sample early retirement packages.

In your 50s or 60s, you may face an impromptu decision about your retirement age if your employer implements an Early Retirement Incentive Program (ERIP).

Why Do Companies Offer in Early Retirement Packages?

Early retirement packages are designed to incentivize employees to retire earlier than they would otherwise. An ERIP reduces the workforce and targets more experienced (typically higher-earning) employees.

These early retirement packages also reduce the employer’s risk of being sued of wrongful termination, and they avoid the negative effect on morale that layoffs could cause. Even though your employer may offer you financial incentives and benefits, it will likely cost them less than your normal full compensation would.

Your employer will have to determine the details of the early retirement packages, which employees are eligible for, and the timing.

How Does an Early Retirement Buyout Work?

Typically, insurance considerations (coverage amount and costs), pension vesting, and age/years of service will be the main criteria. Your employer may also choose to only offer early retirement packages to employees of certain seniority levels.


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