If you work at any job long enough, you’ll bound to think about quitting at some point. What if you could negotiate a severance and get paid to quit your job? I did just that in 2012 and received six years of living expenses to walk away! How many months of severance would it take to quit your job?
As part of the research for my book How To Engineer Your Layoff, I interviewed over 80 people face-to-face to better understand people’s risk tolerances.
Funny enough, about half of them were interviewed while I was relaxing in a hot tub up in Lake Tahoe. If you want to start a fun dialogue, ask this question next time you’re taking a soak with sangria in hand!
Results: How Many Months Of Severance Would You Need To Quit?
The 80 people produced a range of answers between 0 months to 36 months of living expenses in severance in order to quit their jobs. The median number, somewhat surprisingly was only about 3-6 months!
The people I spoke to ranged from 23-year-old recent college graduates to 55-year-old men and women who longed to do something new. Almost everybody had dreams of doing something else.
Although about 10% said they loved their jobs and were happy to keep on working for another 5 years.
It definitely seemed like the younger and older ends of the spectrum wanted to do something new. Those in the middle, ages 30-45, seemed a little more content in what they were doing, but still had the itch.
Analysis Of Desired Severance Amounts
Here’s a more detailed look at the results of my survey on how many months of severance people would need to quit their jobs.
Observations of those willing to accept six months severance or less to quit:
- Either younger in age, e.g. in their 20’s, or older than 50.
- Had at least one year of living expenses in savings, with many having 3-5 years +.
- Seemed more extroverted based on how long they’d sit and chat.
- More entrepreneurial in nature, e.g. talked about businesses they wanted to start vs. new jobs they wanted to have.
- Many had very average to below average paying jobs.
- Men were more aggressive to take less if they knew what they would be doing.
Observations of those who need more than a six month severance to quit:
- Have more stable occupations, e.g. worked for the state, accountant, lawyer.
- Earn higher paying salaries with occupations such as lawyer, banker, dentist, doctor, engineer.
- Already have children.
- Have more than one mortgage.
- Recently changed careers in the last five years.
- Have consumer debt balances.
- Many were in their mid-30’s. It’s as if they were just starting to taste success after paying their dues in their 20’s and didn’t want to give it all up yet.
- Women seemed more conservative in general, not wanting to risk their livelihood without a clearly defined plan.
Severance = Large Cherry On Top Of A Hot Fudge Sunday
I encourage you to think about how many months of severance it would take for you to quit your job. For many of us, receiving a nice severance is just a bonus for leaving a job we wanted to leave anyway.
About 20% of the respondents said they wouldn’t need a thing thanks to some new plans on the horizon. Meanwhile, another 10% just wished the company laid them off, even with no severance so they could “get on with their lives.”
When I started seriously thinking about quitting my job in 2010, I didn’t even factor getting a severance into the equation. All I thought about was how to save the most and get my savings to generate enough steady cash flow so I don’t need to work again.
The more I researched the process of severance, the more I realized what an enormous potential windfall we could all have!
Think Outside The Box To Get Richer
Discussing a way to get a severance package almost seemed taboo to about half the people I talked to. They wanted to either just get up and quit, some with barely any savings, or just keep on biting their tongue and working.
Most people don’t approach the possibilities of a severance negotiation as any engineer would in a methodical, calculated, and multi-variable outcome way. When you know your rights, you know your worth!
I am on the more conservative side of things. So I told myself that if I could get 36 months worth of severance, I would pull the trigger. At the very least I didn’t want to lose my deferred compensation if I quit.
When I finally signed my separation package agreement, the amount of severance I got equated to roughly 72-84 months of living expenses! Six years was a serious no brainer, even for a conservative person like myself.
My book, How To Engineer Your Layoff, is recently updated with even more case studies, resources, data points and negotiation tips. I hope you buy it and make yourself a small fortune walking away from your job!
Start Your Own Website
It’s been over 10 years since I started Financial Samurai and I’m actually earning a good passive and active income stream online now. The top 1% of all posts on Financial Samurai generate 31% of all traffic.
The average age of the top 1% posts is 2.3 years old. In other words, after putting in the hours to write some very meaty content over two years ago, my top posts consistently generate a monthly recurring income stream that’s completely passive.
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But just by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build.
If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes like mine with my step-by-step tutorial.
You never know where the journey will take you!
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Updated for 2020 and beyond.