Advice » Salary & Benefits» Salary Information » Should You Say Yes to a Buyo ...
Should You Say Yes to a Buyout?

Should You Say Yes to a Buyout?

What makes an employer’s buyout offer a good deal? The answer depends on where you are in your career, where you hope to go next and exactly what’s in your buyout package.

In today’s economy, the lure of a big-bucks buyout can be tempting, but before you say yes, take the time to fully unwrap the package your employer is offering to see what’s inside.

Career Considerations

The best buyout is one that bridges a small gap between now and retirement. If you’re not ready to retire, you may want to keep your job. “Once you’re over 40, it starts getting harder to get jobs,” warns Lita Epstein, author of Surviving a Layoff: A Week-by-Week Guide to Getting Your Life Back Together.

The job market is “horrendously tight” for those over 50, adds Robin Pinkley, PhD, professor of management and organization at SMU Cox School of Business in Dallas and author of Get Paid What You're Worth: The Expert Negotiators’ Guide to Salary and Compensation. “Everybody is trying to get rid of the large-salaried folks, so the number of positions for them are going to be far and few between.” Given this reality, consider whether you could afford to take a lower-paying position.

Even if you’re confident of quickly landing a new job, start your job hunt right away, advises Jill Evans Silman, SPHR, vice president of Meador Staffing Services in Shenandoah, Texas. “If you take a buyout, there’s a temptation to not reapply yourself quickly into something else,” she says. “Time can get away from you, and employers have issues with too much time out of the workplace.”

Before you accept the buyout, take home contact information for clients, coworkers, industry associates and especially vendors. “They hear first when there’s a job open somewhere else,” Epstein says. Make copies of projects and email to your personal address anything stored in your computer that demonstrates your accomplishments.

Stepping-Stone or Quicksand?

Those who want to switch careers or launch a new business can use buyout funds as a financial stepping-stone.

If your new business will compete with your old employer, check the buyout agreement for a noncompete clause. “Check [the clause] with an attorney, because it might not be legal [in your state],” Epstein advises. “If the noncompete isn’t going to stop you from doing what you want to do, ask for as much money as you can get for that agreement.”

Thinking of using your buyout to fund additional education? Know when you can start -- the application deadline for many competitive programs is six months or more before classes begin -- and how long it will take to finish. Ask your employer to include tuition assistance in your buyout package.

Fiscal Fitness

Along with the amount of cash offered, health insurance is a top financial consideration for buyout recipients. “If you’re not eligible for Medicare, getting health insurance on the open market can be next to impossible, because almost everyone has some pre-existing condition that’s going to knock them out,” Epstein says.

Can your employer contribute to health insurance going forward? If you’re eligible to continue on your employer’s health insurance through COBRA, what will that cost?

Spending a few dollars to have a financial planner or retirement benefit expert review your buyout offer could save you thousands. Have him evaluate what the buyout does to company match money in your 401k or pension payments and how any money you receive will influence your taxes and financial aid you (or your college-age children) receive.

If your buyout offer gives you the choice of taking a lump-sum payment or payments over time, consider the likelihood your employee will stay afloat. “Make sure they can honor what they promise,” Silman says. “We’ve all heard stories of retirees who have had their benefits unplugged. In today’s economy, having cash may not be a bad situation.”

Negotiate Your Exit

Just as you negotiated when you landed your current job, you can negotiate on your way out the door, Pinkley says. Figure out what the company is getting in return for buying you out and enhance that. “Have an open discussion about what you can do to facilitate what they’re trying to get,” she says. “If it’s goodwill, you can talk about how well you’re being treated. If it’s training someone in your stead, can you have an extra percentage of the profits from next year?”

Then, approach your exit just as gracefully as you approached your entrance. “Organizations are not coming to the table with the highest amount they’re willing to offer,” Pinkley says. “They’re coming in knowing you’re going to negotiate. Do it in ways that are constructive. Go in trying to problem-solve. Think about what you need to accomplish to make yourself better off and go in with a plan.”

Latest Jobs

The Master's Touch Inc
Posted: 05/23/2015
Valley Falls, NY, 12185
The Master's Touch Inc
Posted: 05/23/2015
Leighton, AL, 35646
The Master's Touch Inc
Posted: 05/23/2015
Bakersfield, CA, 93305
The Master's Touch Inc
Posted: 05/23/2015
Kneeland, CA, 95549
The Master's Touch Inc
Posted: 05/23/2015
De Soto, MO, 63020

Want more personalized results?  Update Your Profile


Monster Communities

Teaching Community
Where teachers meet and learn.
Create and connect.
Networking for the career-minded woman.
Nursing Link
Where nurses call the shots.
More Monster Communities

Monster Partners

Scholarships, financial aid and more ways to pay for school.
Find top campus and online degree programs.
Military portal for the US Army, Navy, Air Force, Marine Corps and Coast Guard.
Financial Aid
Scholarships & financial aid.
Staffing for Government Jobs
Staffing and hiring solutions for federal government agency jobs.
More Monster Partners

Job Hunt Strategy

Six Ways to Make a Recruiter Hate You
If you want to blow your chances with recruiters -- and, by extension, with the companies they work for -- here are six perfect ways to do so.

Resumes & Cover Letters

Rev Up Your Resume to Relocate
Hoping to relocate? Get the ball rolling on landing the right job in the right location with these expert resume and cover letter tips.


100 Potential Interview Questions
Interview questions can run the gamut. You probably won't face all 100 of these, but you should still be prepared to answer at least some of them.

Salary & Benefits

10 Questions to Ask When Negotiating Salary
Most of us aren't natural negotiators, but asking these 10 questions during salary negotiations can help you get everything you deserve.

Employee Sourcing

Alt text
November Monster Employment Index Grows 13% Year-Over-Year, Tenth Consecutive Month of Positive Annual Growth.

For Seekers

Campus and Online Degrees
Advance your career and earn more with an online degree.
Free Salary Wizard
What are you worth? Find out and negotiate a better salary.
Research Careers
Get information on jobs and career paths to help guide your choices
Questions & Answers
Find answers to all your career related questions -- powered by Yahoo! Answers
Resume Distribution Service
Our distribution service puts your resume right in the hands of recruiters.
Resume Writing Services
Our experts will craft a keyword-rich resume that stands out in the crowd.
More Career Resources

For Employers

Career Ad Network
Target your job posting to more candidates on thousands of websites.
Hire Right Background Checks
Explore our background check packages to improve the quality of your hires.
Hiring Home Page
Find the best candidates for your business with Monster hiring solutions.
Job Postings
Find the right solution for your hiring needs. Starting at $99.
Power Resume Search
Monster's new search technology precisely matches people with your jobs.
Resource Center
Find staffing insights, labor trends, HR best practices and more.
Target Post
Connect with skilled, hourly and administrative candidates for only $99.

Social Media

Jobs on Twitter
Find jobs in your area and industry.
Monster Careers
Tune into our career advice and discussions tackling a wide range of topics and industries.
Monster Corporate & PR
Stay up-to-date on the latest news. Get the 'Who', 'What', 'When', and 'Why' on all things Monster related.
Monster Customer Service
Got a Monster question? We've got the answer. Whether you're a job seeker or employer, we can help you find the answers you need.
Monster for Employers
Find advice on hiring.
Follow Us
Check out our many pages and stay connected with the latest industry news, events, career advice and job openings.

Other Links

Monster Company Profiles
Explore companies and get information to guide your career decisions.
Compare Salaries
See how your pay stacks up to others in your field.
iPhone Application
Download the Monster app for iPhone and iPod touch.
Monster Job Seeker Blog
Monster Job Seeker Blog.
Monster Thinking Blog
Monster's Recruitment Trends Blog.
Jobs & Career Resources
Search Jobs:
For Employers: Post Jobs | Search Resumes | Advertise
About Monster | Work for Monster | Advertise with Us | AdChoices | Partner with Us | Investor Relations | Social Media
Terms of Use | Privacy Center | Accessibility Center | Help | Security | Contact Us | Sitemap | Mobile
©2015 Monster - All Rights Reserved U.S. Patents No. 5,832,497; 7,599,930 B1; 7,827,125 and 7,836,060 MWW - Looking for Monster Cable? - V: 2015.8.0.34-311