Updated on 2H2020. Negotiating a severance to travel around the world is much harder now due to the global pandemic. But eventually, the world will reopen. Travel is slowly inching back up to pre-pandemic days. Stay safe and strong everyone! This post will teach you how to negotiate a severance and travel.
Ever dreamed of negotiating a severance to travel around the world? I have and I did between 2012 – 2017 after working for 13 years in the financial services industry. I worked in the international equities department. Due to my job, I got to go to at least one new country a year on the firm’s dime. It was incredible.
The experience was so amazing that I decided to publish a book teaching how people can do exactly that. How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye is 180+ pages long and now in its 4th edition for 2020.
The book is the only resource on the market that teaches people how to negotiate a severance. Once you have one, you have a financial runway to do whatever they darn please. Traveling around the world is often at the top of people’s list. However, so is spending time with family or pursuing one’s dreams that doesn’t pay much.
I have traveled to over 60 countries and lived overseas for 13 years. I absolutely encourage everyone to take time off to travel! Traveling is one of the true great things in life!
How To Negotiate A Severance And Travel Around The World
Here are four tips everyone can use to help them negotiate a severance.
1. Know Your Leverage
Before you enter severance package negotiations, it’s important to realize how much leverage you actually have — which is largely dependent on the circumstances of your departure.
If you are a strong performer, list out all the things you’ve done to create value for your firm. The stronger your performance, the more leverage you have to negotiate a severance. This is because the last thing your employer wants is for you to quit immediately or badmouth your employer to clients and new hires.
If an employee has a potential legal claim, such as a claim for workplace discrimination or any other type of wrongful termination, this may provide the employee with some leverage.
If an employee is also famous outside of the firm, such as over social media, the last thing the employer wants is to get put on blast by the employee for mistreating them.
In these types of situations, an employer may be likely to offer an employee with a severance package in exchange for the signing of a release agreement, which means the employee would agree not to file a lawsuit [against] the company related to their departure in exchange for a financial payment or other valuable services.
Other factors that affect your ability to negotiate include the company’s history for providing severance, your value historically to the company and any meaningful relationships you may have established. If your employer provided 2 weeks of severance per year worked in the last round of layoffs, you should argue for the same.
2. Know The Amount You’re Negotiating
Use historical severance payments as a starting point for how much you should reasonably negotiate. You don’t want to get lowballed. You need to fight for what you are worth.
Make sure to do your research, starting first with the employee handbook. Then get into contact with previous employees who got let go to give you guidance on what they got and what you should get. There’s generally no set rules for how much an employee can get in severance.
It’s also worth reviewing your offer letter to double check and see if it included a stipulation on severance (often the case for senior executives) or doing some online research to see what those in similar situations have managed to secure.
As a general rule of thumb, 1 to 3 weeks of severance per year of service is a good benchmark to go by although this can depend on your level of seniority and income bracket.
There is no cap on severance. The cap is limited only by your negotiation skills, hence the importance of learning all the severance negotiation strategies in my book.
3. Severance Includes Many More Things
In addition to getting a severance check, you should negotiate healthcare coverage, deferred cash and stock options, relocation assistance, and more.
For example, my severance check only accounted for 30% of my overall severance package. The rest was in deferred cash and stock over a three year period and a deferred investment fund that paid out four years from my time of departure.
4. Hire A Severance Negotiation Expert
While How To Engineer Your Layoff should give you most of the tools you need to confidently negotiate your own severance to travel the world, sometimes you need to hire an expert to guide you.
I have helped clients who were negotiating $50,000 – $500,000 severance packages. When so much is on the line, paying a couple thousand dollars may be worth it just so that you have more peace of mind.
Remember, if an employee negotiates a severance package with someone in their company’s HR Department (who is not your friend), it is likely that the representative has negotiated other severance packages and/or has some training about how to manage those types of issues. An employee will likely be at a disadvantage if s/he is negotiating a package for the first time.
Once you’ve negotiated your severance, you’ve got to then budget all your travel expenses so you can travel responsibly. The last thing you want to do is get stressed because you’re running low on funds. Thus, I recommend taking advantage of free wealth management.
Also explore my top financial products page to efficiently manage and grow your wealth successfully.
Given we’re living longer, why not bring up end of life travel and disperse the trips over your lifetime instead. I’d much rather climb up the 587 Santorini steps at 40 than at 70!
Whatever you do, never quit your job, but get laid off instead. If you quit your job, not only do you not get a severance. You also don’t get any of your deferred compensation. Finally, you are also not eligible for up to ~27 weeks of unemployment benefits. These benefit can be worth up to $900 a week, or up to $1,500 a week in some states now.
The world is big and wonderful. Go explore it while you’re still healthy. You won’t regret it!
Never quit, negotiate a severance. Buy my book, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye to learn how to walk away from your job with money in your pocket. I received six years of living expenses in the form of a severance package and followed my dreams. The book has been revised a 4th time and is ready to go for the new decade.
Now that you’ve gotten an idea of how to negotiate a severance and travel, it’s time for you to book that refundable trip for 2021 and beyond!
About the Author:
Sam worked in investment banking for 13 years at GS and CS. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income, most recently helped by real estate crowdfunding. He spends most of his time playing tennis and taking care of his family.
Financial Samurai started in 2009. It is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month. Over 10,000 copies of How To Engineer Your Layoff have been sold worldwide. The book is now in its 4th edition for 2020 and beyond.