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What Is Voluntary Early Retirement?

For most individuals a work week consists of at least 40 hours at week for 50 weeks a year for up to 40 years. Ultimately, as the years go by, the hard working individual begins to think about retirement.

Saves Consistently

In addition, that retirement age is around 65 years of age. However, if an individual works hard and saves consistently they maybe able to take advantage of a voluntary early retirement option as possibly provided by their employer.

Retirement And Possible Pitfalls

If considering this option, it is important to take into account a number of factors. Those factors include knowing what is voluntary early retirement and possible pitfalls to be aware of.

What Is Voluntary Early Retirement?

Voluntary early retirement is an option that may be provided by certain employers. Specifically, the voluntary early retirement option can be exercised if the employee has reached a certain age and has worked a certain number of years as an employee.

Voluntary Early Retirement

In addition, voluntary early retirement may be offered to certain employees under specific circumstances. Examples of those certain circumstances could include the restructuring of the company which necessitates the downsizing of a company’s work force. In addition, if an individual has incurred an illness that prohibits the worker from fulfilling their job responsibilities, the company may offer a voluntary early retirement package.

Voluntary Early Retirement

One other example where voluntary early retirement may be offered is if the individual has had significant disciplinary problems and the company wants to terminate the individual. In this case, as a solution for all involved, the company may offer a voluntary early retirement package.

Possible Pitfalls

If the employee is considering the option of taking early retirement, it is important to take in consideration all of the components that are part of the package. Specifically, the individual should determine or have explained to them what the financial package will be.

Yearly Retirement Income

In other words what will be the yearly retirement income, any adjustments for inflation, if there is a limit to the extent of the retirement payments, etc. This is important because generally retirement income is less than what the individual is currently receiving for the work that they are performing.

Possible Retiree

In addition, the possible retiree should determine if any early retirement health insurance benefits are available. If so, questions regarding the deductibles, a prescription plan, dental insurance and what part of the insurance premium will be paid by the company are issues surrounding health insurance that should be asked.

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