It's Your Money: Employee buyouts

Some employers are responding to hard times by cutting their work force, but not necessarily with layoffs.

Often, they offer a buyout or what is known as an early retirement. That can be both good and bad.

Six-hundred executives at Walt Disney Theme Parks have agreed to voluntary buyout packages.

Many employers are turning to severance packages to endure the financial downturn, but there are things you should consider before accepting that early retirement offer.

"We are seeing many more layoffs than we've seen at one time in many years," Financial Planner Karen Altfest said.

For those making $100,000 or more a year, a generous severance package is often in the ballpark of six months pay. But severance packages vary and often depend on the company's state of health.

"I would say if someone is offering you a severance package, negotiate the best you can and take it," Altfest advises. "I see no reason not to take it. I think you are one of the lucky few if you are getting a good severance package with a lump sum and medical coverage, 401k, other things that will tide you through to your transition."

Circuit City, for example, said it intends to pay 60 days salary to field managers and associates who are laid off at the company's headquarters.

At DHL, most employees will receive two weeks pay plus an additional week for each year of service.

"Because of this economy, we have to be prepared to work even longer -- maybe into your 60s, maybe 70s," Altfest said. "Be prepared to take on those extra years of work. "Don't count on stock options -- so many of them are under water anyway."

What you can do is get educated on your company's policy in advance. That way you know what options you may have if the unthinkable becomes reality.

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