Anyone knowledgeable of how to challenge being RIF. I believe that was terminated because of my age (56 years). Question #2 How could avoid big tax bill on my severance payout ? Can I roll it over to an IRA ? Thank you and Good luck to all.
18 replies (most recent on top)
You cannot roll your severance over to anything! Yes, you will be taxed-so consult with your tax person. You should talk to a financial advisor as well. You can roll your 401k to an IRA and you can rollover your pension(if you have one) to an IRA. Again, talk to a financial advisor and a accountant everyone's financial situation is different.
@gt it's all pops and buzzes from here.
@b4 and I can guarantee no one wants you as an English tutor.
@a6 bogus info
@OP Na u get axed prolly cause you slow or lazy. Stay up old playa u retire soon and bust up the spades. Peace. ✊🏾
@OP - "I believe that was terminated because of my age (56 years)."
Sorry for your career upheaval at this stage, but you're not exactly elderly. Depending on your financial situation and health you could conceivably work another ~15 years.
Several years back I was cut loose from a horrendous Telecom company in a layoff wave at age 59 and never looked back (you can guess which company). Within several months I lined up another corporate position at a higher level (Senior Management) and more than doubled my compensation. I'm working in another industry which has been a breath of fresh air.
Morale of the story is that there are jobs out there for later career people who still want to work. I'm not suggesting everyone will be able to entirely mimic my career path but you won't get much sympathy from me being at a crossroads in your mid 50's.
I know that's not the Severance question you posed, as the prior poster rightfully pointed out that severance is full taxable as income. Because you were "fired" after age 55 you do qualify for early 401k withdrawals at a 10% tax rate.
Wish you the best whatever going forward decisions you make!
I was laid off at 54, can’t acess 401K but I was planning for it and have enough in brokerage account to cover until 59.5. I was planning on being retireable at 55. I am glad I did to prepare for it. It is time to concentrate on my health. Time is the most valuable asset, especially for folks like us in their 50s. Last leg of healthy years.
@c0
I should have listened to your warning
What a steaming pile that was
Fair warning... the link in @ba's post is a wate of time. There's nothing in this AI generated post worth the read. Thanks to this je-k, I wasted my time reading recommendations that are obvious to anyone capable of breathing. I could have been doing something productive like applying to another job.
@az - "Seeing Linkedin postings also confirms my thoughts/assumptions on who was let go...Ageism is real folks!"
Sorry you feel that way but don't give up hope. Here's something I found on this site that really helped me.
https://www.thelayoff.com/t/1ka6yqhnz?source=follow&n=1
nobody wants you if you over 55,plus all the people that got fired in the u.s from all these companies,its going too be real hard to find work
Of the 10 people I know impacted from my team including myself - all of them were 50 and over - three of those in their 60s & each with 30 years tenure. (Only 1 in their 30s) Seeing Linkedin postings also confirms my thoughts/assumptions on who was let go...Ageism is real folks!
@OP - "I believe that was terminated because of my age (56 years)."
Sorry for your career upheaval at this stage, but you're not exactly elderly. Depending on your financial situation and health you could conceivably work another ~15 years.
Several years back I was cut loose from a horrendous Telecom company in a layoff wave at age 59 and never looked back (you can guess which company). Within several months I lined up another corporate position at a higher level (Senior Management) and more than doubled my compensation. I'm working in another industry which has been a breath of fresh air.
Morale of the story is that there are jobs out there for later career people who still want to work. I'm not suggesting everyone will be able to entirely mimic my career path but you won't get much sympathy from me being at a crossroads in your mid 50's.
I know that's not the Severance question you posed, as the prior poster rightfully pointed out that severance is full taxable as income. Because you were "fired" after age 55 you do qualify for early 401k withdrawals at a 10% tax rate.
Wish you the best whatever going forward decisions you make!
If you get laid off and you are 55 and older, then you can withdrawal from your 401k additionally without early withdrawal penalty.
You can believe you were terminated due to age all you want, but unfortunately that doesn't make it fact. Look at your OWBPA report for age ranges in your business case that were impacted. If you have PROOF you were impacted due to age, hire an employment attorney and forgo signing the severance agreement. As to avoiding taxes on severance, you can't. It's taxed like your bonus at a flat federal 22% (plus applicable state/local taxes). You may get some of if back when you file your taxes in 2027 based on your other income. You cannot divert it to a tax deferred account.
Severance pay will be taxed as ordinary income - no EXCEPTIONS.
If you are talking about your 401k money that you can leave at Fidelity or roll it over into a traditional or Roth IRA and no taxes until you start withdrawing.
TALK to a financial advisor
I believe if you roll over your severance within 90 days it is not taxed. Can someone verify if the above statement is a true fact.
High level... could defer a portion to ura as a contribution but its taxable as income as ordinary income. I was RUF'd Q1 so taxable in 2025.
Age 56 no shot once you sign severance.
I know many older who were RIF.. including me!
Good luck