Kate Ashford at NerdWallet wrote about whether to take a buyout at work, and asked me how to evaluate the offer. The number on the letter is the easy part. What it replaces is the hard part.
A $60,000 severance package sounds substantial until you calculate how quickly it evaporates when you are replacing employer benefits out of pocket. Health insurance for a family on COBRA or the exchange can run $1,500 to $2,500 a month. The 401(k) match stops. Life and disability coverage end. Taxes come off the top, often at a higher rate because the lump sum lands in one year. Run the math honestly and $60,000 can cover six months of a family's real cost of living, not the year it appears to.
The other side of the ledger matters too. Your prospects for the next job at your age and in your field, whether the offer includes extended benefits or outplacement, and what happens if you decline and a layoff without severance comes six months later. Everything in the package is negotiable, and the non-cash items, continued health coverage, vesting acceleration, a later end date, are often easier to get than more cash.
Take the time the offer allows. I have rarely seen someone regret taking a buyout they spent two weeks analyzing. I have seen plenty regret the one they accepted in an afternoon.
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