Other than tax implications - what are the pros and cons to taking your severance one way over the other? I just want to be prepared when my ticket gets punched!
Don't have my "PACKET" yet - so, please do not refer me to that.
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Considering the benefits angle, there's very few scenarios where taking a lump sum makes sense.
@OP when I was displaced they just kept me on payroll as severance. They only offer a lump sum if you get a job before your severance period ends and you sign an affidavit confirming a new job.
I'm curious about the formula on how much severance you get. How many weeks/months pay per year of service?
No benefits (medical, dental, vision) w/ lump sum payout - important if your family is using WFB benefit plans.
Take the biweekly payouts! I called the displacement team and they confirmed if you take the lump sum payout it will take more than 60 days before you’re paid out and you’ll be waiting for the money
Lump sum is not smart
Tax rate increases to around 22 percent flat federal. Nah.
I was let go earlier this year and did the bi-weekly payments (just ended). I had found a job during my 60-day notice and started the week after I was formally gone. Double-dipped for almost six months and paid off my car and bought some crypto! Fabulous. Grass is so much greener after you leave the shithole that is WF.
lump sum i want ties severed from this place! and they gotta pay me 13 months
If you are laid off at the beginning of the year, a lump sum makes some sense. If towards the end, then you risk more taxes. Obviously, a lot depends on whether or not or when you get a new job too.
Basically, nobody can make that decision for you except for yourself.
@c0
Also just a reminder that the ability to collect unemployment while on severance varies state to state
It is only paid in a lump sum after start a new job if you notify them you started a new job, which I would never do.
Check what the taxes are in the state you live in for lump sum severance. That can usually be found on your state's website. Either way, it'll be high
If you take installments, and you find a job a month or so later, whatever is left over will be paid in a lump sum, and still gets taxed at a higher rate.
I plan on taking it in installments and collecting unemployment at the same time. As someone already mentioned, installments you will still be covered by medical insurance.
If you take the lumpsum..
Cons
- Health insurance goes away
- Possibly more taxes
Pros
- Big cash influx to pay for your BMW