Are your clients considering an early retirement? Emily Brandon of U.S. News and World Report tells us 10 things to keep in mind when analyzing whether or not to accept a buyout offer.

  1. Consider the company’s financial health. Is the company in trouble? If a layoff is possible, it may be worthwhile to take the money and run.
  2. Calculate the financials. “Many pension formulas are calculated based on the average of what you earned during your last few years on the job,” Brandon reminds us. “A one-time bonus isn’t likely to be higher than working longer and having more higher earning years factored into your pension calculation.”
  3. Cover the expenses. All of them, for the 30 years or more your client could live in retirement.
  4. Make a counteroffer. It doesn’t hurt to ask. If your client is part of a small group of employees being offered an early retirement package, they may have room to negotiate a higher buyout. Brandon cites an example from Alan Sklover, a New York-based employment attorney and author: “Sklover suggests that you offer to spend the next six months bringing in more clients or business in exchange for a larger payout. It can’t hurt to ask for a little bit more money or subsidized health benefits.”
  5. Find health care. If the buyout package doesn’t include health care, make sure your clients have it before they accept – especially if they’re younger than 65 and ineligible for Medicare.
  6. Factor in Social Security. Benefits are calculated on an average of the 35 years in which you earned the most, Brandon writes, so retiring early means giving up another high-earning year in the equation.
  7. Review what they owe your client. Consider bonuses, commissions, and unused sick or vacation days when totaling how much your clients have earned.
  8. Don’t forget about taxes. Can your clients receive the payout as a lump sum or on a monthly basis?
  9. Read the fine print. As always, make sure your clients understand the terms of the contract their signing.
  10. Size up the job market. Some of your clients’ may not have a choice to stay in their current job, but that doesn’t mean they’re ready to retire for good. Clients who accept a buyout offer and find a new job right away get free money, Brandon points out. But with ever-increasing unemployment, it may be more likely that they’ll have to live on that package for a while. Even if they find a second job, they may not make the same salary they do now.