It dawned on me a severance package can be valued like a risk asset (stocks, bonds, real estate etc). The value of a severance package can go up or down based on its projected income, your need for a financial buffer, and your ability to negotiate properly.
For those of you who are strategically looking to leave your job, enhanced federal unemployment benefits increased the value of a severance package during the heart of the pandemic. After all, unemployment benefits are a key income stream that come with a severance package.
Even though enhanced unemployment benefits are no longer, they will likely come back again when things turn sour. The economy is slowing down due to elevated inflation and the Fed hiking rates. Layoffs will be coming again. The wise person plans ahead by trying to negotiate a severance before getting laid off.
This article helps you value your severance package. For reference, I am the author of the bestselling ebook, How To Engineer Your Layoff: Make A Fortune By Saying Goodbye.
My book teaches you how to negotiate a severance package so you can walk away from a bad job with money in your pocket. That's what I did in 2012 at age 34 and have never looked back! Use the code “saveten” to save $10 at checkout. The book is recently updated with new cases studies, research, and resources.
Never Quit Your Job Please
Most people should never voluntarily quit their job. Instead, always try to negotiate a severance package instead. If you plan to quit your job anyway, there is no harm in trying to negotiate a severance package. The key is to negotiate strategically and with respect.
A severance package not only includes a severance check or multiple checks. It can also include getting your deferred stock and cash compensation paid, if any. For those who work in finance or technology, negotiating a severance package is particularly valuable.
Further, if you get laid off at a larger firm, you are also typically eligible for 1-3 months of legally-required WARN Act pay. Many people still confuse getting a severance with WARN Act pay. A severance is discretionary, WARN Act pay is not. Don't let your employer fool you.
More Benefits Than Just A Severance Check
Finally, if you negotiate a severance, you are most certainly eligible for receiving state-provided unemployment benefits for usually up to 27 weeks. During extenuating circumstances, like during the Global Financial Crisis or a pandemic, the federal government sometimes steps in and provides more.
If you quit your job, however, you are ineligible for unemployment benefits most of the time. The reasoning is simple. If you quit your job, it means you don't need the money. Otherwise, you wouldn't have quit! Besides, your old employer has to confirm/sign-off with the unemployment department if you apply for unemployment benefits.
The only thing you can do is to “quiet quit” by doing the minimum your job expects of you. If you're burned out, working up to 100% for 100% pay makes sense. Forget about working overtime for nothing. Set work and life boundaries. However, also be flexible to adapt if you notice signs of work trouble.
Enhanced Unemployment Benefits Increase The Value Of A Severance Package
Due to the global pandemic, the federal government passed multiple stimulus packages to help laid off Americans survive. Let's look at what these enhanced benefits entailed and how it increased the value of a severance package.
On March 27, 2020, the government passed the CARES Act which provided an extra $600/week of enhanced unemployment benefits, initially through July 31, 2020. Therefore, the value of a severance package has gone up.
Take a look at a chart I put together highlighting the states with the highest unemployment benefits plus the enhanced unemployment benefits. Receiving $4,276 – $5,692 a month in unemployment benefits per person was a huge lifeline for so many.
If you so happened to have quit your job in 2020, you would have received zero unemployment benefits! In 2020, the average value of a severance package was likely the highest in American history. At the same time, for several months at least, the desire to leave a job may have been the lowest due to so much uncertainty.
For most states, you can receive 26 weeks of state-paid regular unemployment benefits. Therefore, if you were unemployed in Massachusetts for 26 weeks, you would have received at least $21,398 in unemployment benefits.
But for about 16 weeks, you would have received an additional $9,600 in unemployment benefits for a total of over $30,000. Hefty!
Continued Enhanced Unemployment Benefits
In 2021, a new $1.9 trillion stimulus bill includes $300 in enhanced unemployment benefits through September 6, 2021. Further, the initial $10,200 of unemployment benefits will be tax-free for households that make under $150,000. I've updated the chart above with the new information below.
If you quit your job, you won't be eligible for between $3,076 – $4,492 a month in enhanced unemployment benefits through September 6, 2021 from these top states. Although it's not as much as what was offered in 2020, the economy is in much better shape today.
The employment picture will continue to improve as more people get vaccinated. Therefore, more Americans will have more employment options. This also means the desire to leave a job and negotiate a severance should increase.
Rationally, if you can afford to, it is more logical to take your time and find the best job possible until your unemployment benefits run out. The last thing you want to do is jump back into the fire and get overcooked due to a bad fit.
There Is No Shame In Collecting Unemployment Benefits
Some people still feel ashamed about collecting unemployment benefits. If you are one of them, don't be. Employers pay an annual Unemployment Insurance (UI) tax. Which means employees ultimately pay for at least some of the unemployment benefits through lower wages. Nothing is free, folks!
The UI program is part of a national program administered by the US Department of Labor under the Social Security Act.
New employers pay 3.4 percent for a period of two to three years on the first $7,000 in wages paid to each employee in a calendar year. The UI rate schedule and amount of taxable wages are determined annually. The Employment Development Department notifies employers of their new rate each December.
The maximum tax is $434 per employee per year (calculated at the highest UI tax rate of 6.2 percent x $7,000.) The more employees an employer lays off, generally the higher its UI tax rate goes.
Not collecting unemployment benefits when you are unemployed is like not collecting Social Security when you are at the government-determined retirement age. That would be just silly after a lifetime of paying into the system.
Therefore, people who quit their jobs without a new job lined up are doubly silly! Further, I argue that quitting a job with only a two-week notice is selfish. It's more magnanimous to engineer your layoff in order to properly find a replacement.
You Can Collect Unemployment While You Have A Severance
Just like how you can collect unemployment while you earn investment income, in America, you can most likely collect unemployment while you are still earning severance income.
First of all, it takes time to start receiving unemployment benefits. You need to apply soon after you get laid off. Then it takes at minimum two weeks for the state to process your application and check with your old employer that you've indeed been laid off.
While you wait for unemployment benefits to begin, your severance check may come before or around the time you start receiving unemployment benefits. Even if your severance check is delayed and your severance package includes months or years of deferred compensation payments, you should still be able to collect unemployment benefits.
Unemployment benefits and a severance package are separate benefits. Unemployment benefits are dictated by whether you are employed or not. If you are laid off without cause, it is your legal right to receive unemployment benefits.
A severance package is voluntary monetary compensation an employer pays an employee who is laid off. It is in addition to unemployment benefits.
The Value Of A Severance Package Went Up
The value of an asset is based on its income stream. Therefore, the value of a severance goes up when there are enhanced unemployment benefits.
For example, the value of a rental property goes up when its rent increases. When interest rates go down, the value of a rental property or any cash-flowing asset goes up too. It now takes more capital to produce the same amount of rental income as it did a year ago.
In a similar vein, it's often easier to make more passive income in a bear market. When the Fed is hiking interest rates, the yields on risk assets tend to go up to stay competitive.
The same type of analogy can be said with the value of a severance package. The value of a severance package has increased because one key component of the package, unemployment benefits, has gone up. The increase is temporary, but it is an increase all the same.
Further, the value of a severance package has also gone up because interest rates have come down. Let’s use interest rates as a temporary way to capitalize the value of your severance package income.
Treasury Bond Example
For example, at a 3% 10-year bond yield, it used to require $1,796,800 in capital to generate the equivalent of the annualized $53,904 a year in maximum unemployment benefits for a Massachusetts resident. At a 1.5% 10-year bond yield, you now need $3,593,600 in capital to generate the same amount of unemployment income.
Related: How To Calculate The Value Of Your Pension You Lucky Duck
How Much Has The Value Of A Severance Package Gone Up?
For the top states in my chart, enhanced unemployment benefits lift overall unemployment benefits by 36% – 54%. For the states with the lowest unemployment benefits, the enhanced unemployment benefits lifts overall unemployment benefits by 54% – 127%.
Let's take California for example. The standard unemployment benefit amount is $450 a week or $1,800 after four weeks. An additional $300 a week in enhanced unemployment benefits would mean a 67% increase.
Now let's look at Mississippi. The governor got rid of the mask mandate. He fully opened up the economy two months before there was enough vaccine supply for all adults. Mississippi's weekly unemployment benefit amount is $235. Therefore, an additional $300 a week in unemployment benefits equals a 128% increase.
Let's estimate unemployment benefits for 27 weeks accounts for 20% of the value of a severance package. We can, therefore, calculate the average value of a severance package has gone up by 7% – 25% ((36% – 127%) X 20%).
Once you take into consideration the drop in interest rates, the overall average value of a severance package may be up another 50% – 100%, temporarily. In calculating the value of a severance, the interest rate is actually the greater determinant.
Example Severance Package Value Calculation
The value of a severance package is a function of unemployment benefits, interest rates, return rates, and how much severance you get per year worked. But here are some basic calculations no matter what economic environment you find yourself in.
1) Normal Unemployment Benefits / 3% Interest Rate
- 10 weeks of pay = $20,000
- WARN Act pay for 8 weeks = $16,000
- Unemployment benefits for 20 at $450/week non-enhanced = $9,000 (20% of total)
Total value of severance package = $45,000 or $3,750 a month for 12 months
Capital needed to generate $45,000 at a 3% interest rate: $1,500,000
2) Enhanced Unemployment Benefits / 1.5% Interest Rate
- 10 weeks of pay = $20,000
- WARN Act pay for 8 weeks = $16,000
- Unemployment benefits for 20 at $750/week enhanced = $15,000 (29.5% of total)
Total value of severance package = $51,000 or $4,250 a month for 12 months
Capital needed to generate $51,000 at a 1.5% interest rate: $3,400,000
Capital needed to generate $51,000 at a 3% interest rate: $1,700,000
The interest rate is the biggest determinant in valuing the severance package. However, enhanced unemployment benefits temporarily boosts the capitalized value of a severance by $200,000 ($1,700,000 – $1,500,000) if we keep the interest rate the same at 3%.
Given unemployment benefits and deferred compensation aren’t forever, we can’t use the capitalized values to permanently value a severance package. It’s just one way of looking at it. The true value is the total combined income of the severance package.
Even after enhanced unemployment benefits expire, the value of a severance is still much higher today due to more government programs under the Biden administration.
Bottom line: Never quit your job or get fired! Always try to get laid off with a severance package instead. You have nothing to lose. A severance package not only provides you money, but also buys you time to do your next thing. The value of a severance package has gone up. You would be foolish not to try and negotiate for one.
How To Engineer Your Layoff – New Edition
Pick up the latest edition of my bestseller, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye. Negotiating a severance was my #1 catalyst to break free and retire early.
The book has grown from initially 120-pages in 2012 to now over 240-pages in 2024. I've consistently incorporated reader feedback and case studies. The latest edition covers when to hire a lawyer and answers to new intriguing reader questions. I've also updated the resources and more.
If you've been grinding away at a job you don't particularly enjoy, get ready for an explosion of new work opportunities. During lockdowns, I think we've all realized life is too precious to continue doing something that doesn't provide us joy or meaning.
If you want to buy the book, use the code “saveten” at checkout to save $10. Negotiating a severance is what gave me the courage to leave a well-paying finance job to do something I love. Not a day goes by where I'm not thankful for taking a leap of faith in 2012.
The Value Of A Severance Package is a Financial Samurai original post. For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter. I help people get rich and live the lifestyles they want.
Paypal for your ebook HTEYL doesn’t seem to work. Are there other ways to purchase? Please look into this issue as I’m eager to purchase.
Weird. It’s been working yesterday after several purchases. Can you try again? Use the code “saveten” at checkout to save $10. We’ve got Venmo too. Feel free to email me at financialsamurai AT gmail DOT com.
I am in Texas. I was denied unemployment due to severance but colleagues of mine from same company received unemployment plus severance. I’m supposed to have a hearing as I challenged this, but other than mention some get it why not me, not sure how to approach it. Anyone know?
As my husband and I are considered high net worth, a friend was surprised I ask for assistance. Why not? We pay into the system with taxes. Our daughter received scholarships for summer programs because we asked for assistance, and I’m waiting on a mortgage modification. I’m doing ok on job search.
Good luck at your hearing! Let us know how it goes. How many weeks or months was your severance?
I’m being layed off in two weeks after 41 years because my company is closing our plant and selling it for decommissioning in NY state. I’ll be receiving 18 weeks severance as required by union contract and will be retiring on June 1. Am I eligible for WARN act pay and / or unemployment benefits an when? Should I apply for them immediately?
Yes. Ask the employer to differentiate between WARN Act pay ad a severance.
Unfortunately, if all you’r getting is 18 weeks total, you really aren’t getting much of a severance. File for UI as soon as you are unemployed.
See: When A Severance Package Is Not A Severance Package
I recently engineered my layoff and will be free from my long time employer last week. As I was negotiating through this process I also started my own company on the side. I have a couple small contracts, but have yet to pull a paycheck from my company. In California, would I still be eligible for Unemployment benefits? And at what point would they consider you ineligible for new business owners? Thanks!
If you approach your employer proactively to get laid off do you risk them firing you for performance? It seems like they could argue you wanted to get laid off and lowered performance therfore deserving termination.
I have a friend that was working for an insurance company that terminated him around the beginning of the pandemic. He got a full year’s severance and his PTO paid out. Approximately $110K. He waffled around deciding whether to just retire and finally pulled the trigger. They asked him to move to a different team and he was refusing to do so and then this happened. He appears to be full retired although he is abusing Obamacare and unemployment to make it happen. He has a net worth of $1.5 million. Just an interesting data point.
Thanks for the datapoint. So long as he’s actively looking for new job opportunities while collecting unemployment, it’s not abusing unemployment. After all, you never know what might come up after a couple months of not working. Further, he and his employer paid into the UI system.
I got unexpectedly got laid off from my longtime job, but did receive a severance + 6 months unemployment. It was a bit awkward for me at first, but it was nice to actually be getting paid for a while without having to go in to a job. Im not used to getting anything like that so it was definitely a plus. Its just how things work now more than ever, so no need to feel bad about taking it. Plus you have paid into it anyway through those deductions on your paycheck. Its definitely something in my financial toolbox going forward to consider how a layoff with severance and unemployment can be a bonus compared to just leaving a job with nothing. Its great that Sam has brought more awareness to this topic.
Sorry you got laid off, but great you got a severance and are receiving unemployment benefits! Your company paid into the Unemployment Insurance program. Collect away!
I know lots of people who quit their jobs with nothing, only to find out their company laid off people 1-10 weeks later with nice severances.
I’m encouraging people to be proactive with their severance negotiations by negotiating before they are offered one. This way, you can dictate your terms better and feel better about your departure.
GL
I believe some states require you to be off severance before you become eligible to start receiving UE benefits. In which case, you may negotiate yourself out of qualification for the enhanced pay.
Please send me the source of your information.
This is another one of those misunderstandings about severance and unemployment benefits. They are desperate.
Thanks
In NY you do have to wait till the end of severance payment before you can claim for unemployment. I lost my job unexpectedly last month and this is what I found out from the NY unemployment site.
When does your severance end? I would double check with your employer. Your employer signs off on your unemployment benefits. They don’t want to have a PR blowup if the media finds out they laid you off and denied unemployment benefits. Pls get back to me with what they say.
My NY-based employer told me to apply for UB right away, before my severance check was played and before years of deferred comp was paid. Please also don’t confuse 3 months of mandatory WARN Act pay from your employe and your severance check. How many weeks of severance did you get? If you got 13 weeks of severance or less, you did NOT get severance.
The problem is not with my former employer but NY gov. The unemployment claim site stays that, quote “you will not be eligible for benefits if you receive weekly severance payments that are greater than the maximum weekly benefit rate…If you are still unemployed when your dismissal or severance pay ends, you should file a claim for benefits.” I can apply for UB right away but will not receive any benefits until severance payment ends. I wonder if NY unemployment requirement has changed in recent years which is now different from when you applied for yours.
Yes I receive severance pay periods that’s greater than WARN Act requirement. However, my separation period is inclusive of, not in addition to, notice obligation required by the WARN Act.
I will file for unemployment anyway. Hopefully I can qualify for the Federal CARE Act benefits right away.
Good luck, and please let us know how it goes. Are you not getting a lump sum severance check?
How long was your severance time period? Thx
Yes, in Ontario Canada you can only begin to collect unemployment insurance once your severance package has been exhausted. Ironically, this actually makes severance packages less valuable then ever right now since the alternative is a higher then usual unemployment payments from the government.
Not sure if you quite understand how severances are paid in America. Most people who get a severance package get a lump sum check soon after departure. Therefore, it does not take long for the severance to get “exhausted.”
Yes I fully understand severances…I have personally negotiated (w/lawyer assistance) 2 severances in the last 13 years.
FYI, here in Ontario (probably most of Canada) severances are almost always paid out as continuance of salary. Lump sum settlements are typical on occassion when the employee goes the litigation route.
Got it. Then things must be different in Canada. My audience is overwhelmingly American.
Can you give me an example of a salary that is a continuance of salary? Do you know what the WARN Act equivalent is in Canada?
Maybe I should add a chapter about Canadian, British, and Australia severances in my new edition to round out my remaining readership. That’s actually an excellent idea!
Thx
I was laid off as a result of a merger and received roughly 11 months of full compensation (including accelerated RSU vesting, prorated bonus and unused PTO balance pay out) plus 6 months healthcare coverage ($10K for a family of 5). I have been collecting unemployment since September in Washington State, which has been a nice income stream, essentially paid my mortgage for me and then some.
Some other tips that I learned: Talk to HR at your company to see if you can maximize your FSA and 401K contributions for the year before you leave and receive the full company match and tax benefits. My company paid 5% 401K match. Usually I spaced it out to reach my max contribution in December, but in this case, I increased contributions in last paycheck so I reached my max. My company does a true-up in March to reach their full 5% match on any front loaded contributions.
Plan for taxes! One down side is that my taxable income on 2020 was way higher than I was expecting due to accelerating 11 additional months of income into the same calendar year. I don’t expect any sympathy here, but in an ideal world, I would have split the payments into 2 years, to avoid jumping a up a couple brackets. This was not an option with my company. I haven’t done the math, but I probably just funded my own Unemployment benefits with the additional taxes I paid.
Start your job interview prep before you leave, if you want a new job quickly. Companies are moving somewhat slowly with hiring, especially in Q3-Q4. Some of the big companies like Google and Amazon are still finalizing headcount allocations now for 2021! Hopefully things start moving quickly before my 11 months runs out so I can end up in the black.
Congrats for getting 11 months of full compensation! Within this time, you can double dip by finding a new job too. Sweet!
You miss 100% of the shots you don’t take. – Wayne Gretzky
I agree, it’s worth the ask. I failed in my most recent attempt however, It was worth the try. Perhaps if I had FS’ book I would have faired better…
I had some deferred comp that was contingent on remaining employed with my previous company for another 13 months. I was leaving for a better opportunity, and set up a meeting with the senior VP to try and work out a strategy to get paid despite the 13 month gap. He was on board with the play and even helped to grease the wheels for me along with another VP to get my payout. The ask wasn’t all that much in value, but in the end the CEO declined. I feel I was caught up in a situation where the deck was stacked against me. Unknown to me (lots of NDAs were signed), the division I was working in was closing. I moved on to a different company with a near 35% increase to my package. 2-3 weeks after I left, the company closed my division. Perhaps, had I known this I could have stayed slightly longer (2-3 weeks more) got laid off with severance, received the WARN Act payment, likely would have had a better claim to my deferred comp and could have potentially had a longer break from one company to the next. Then again, I could have been laid off and lost my foot hold with the new company as there might have been more competition on the street. Life is all about timing.
In the long run I think I came out way ahead, but that deferred comp and extra severance would have been a nice cherry on top.
3 certainties of life:
1. Death and Taxes
2. It’s not what you know, it’s who you know
3. You miss 100% of the shots you don’t take
All good. Given you’ve been a long time reader, you’ve know I’ve had a severance negotiation book out since 2012. Therefore, you made the best decision for you.
I discuss many severance negotiation strategies. One of which is how to negotiate a severance when you have another job lined up. It’s a tightrope walk, but very fun!
Perhaps during the next cycle.
I feel the dig and the truth at the same time. Should have at least got to book to take a better shot at it. Perhaps the ROI on the book will be the education to help others. Look for a purchase from me in the near future. There’s always my final retirement negotiation (or second or third retirement as the trend seems to be…).
I have never understood the concept of engineering your layoff. Maybe I have never worked at a company that it could work at. Every company I have worked at if you wanted to leave for another job – you were shown the door the day you gave notice – and your vacation was paid the next pay cycle. It has always been you were a security threat if you were not 100% committed to the company and thus better to just sever the tie.
I am a director and have been in the rooms with discussions about downsizing and never have been able to 1) advertise the layoffs were coming and 2) select who I wanted to go unless it was an HR issue.
Again – maybe it is just your companies you have worked for, but in my industry of Cyber Security, any person gives notice, they are told to leave the building on the spot, and we pay them the remained of their two weeks and whatever back vacation pay they have accrued and good riddance.
Perhaps the Cyber Security field is different. However, imagine if you had to lay someone off, and someone who wanted to leave, approached you with a proposal. Perhaps something could be arranged. Humans are humans no matter the industry.
Most people don’t approach their managers about a severance because they don’t know how or they don’t have the courage.
There’s always a big relief and a nice money saving effort when an employee quits instead of having to be told their position is no more.
My wife didn’t believe she could negotiate a severance as well until she did with my guidance.
See: https://www.financialsamurai.com/how-to-negotiate-a-severance-as-an-excellent-employee/
If you pay attention to some of the stories in the media, there are people who get multi million dollar services even after torpedo in their company into the ground.
Once you start to believe that you have rights, more good things happen. But just like entrepreneurship, we’re getting into the top 1% of anything, we defeat ourselves before we even start.
Related: https://www.financialsamurai.com/why-negotiating-a-severance-is-possible-absolute-reputational-destruction/
Yes! In healthcare, unless you’re a physician perhaps, it’s “don’t let the door hit you on the way out.” Severance package? =Human Resources as you leave their office
I’m in healthcare and was able to negotiate $50,000 more for my severance package ($65,000). Like you, I didn’t think it was possible to walk away with anything. But I did until I took Sam’s advice from his book.
What you believe is what you will generally get.
I quit in my job 2019 for a fantastic job. No severance. But there was no way. I couldn’t tell my previous job any earlier, or risk not having my name on projects where the paperwork has since gone public (with my name). And I had to start my new job by then to be eligible for their bonuses, stock, etc. I’m very happy at the new job and believe the compensation has been appropriate, so no regrets about missing the severance.
My only regret (which I mentioned on this blog a few years ago), was that when my previous job forced me to move from Ft. Lauderdale, FL to Pennsylvania, that I sold that house. I had bought it was a short sale, and sold it by a lot in 2 years. During buying and selling, all closing costs, real estate fees, etc were paid for by my prior employer. Financially, it made sense to sell it. My network in those almost 5 years has tripled since then, and I wish I still had the house given how real estate has risen in Florida and the ability to mobile work, even though financially, it could have milked me too. And it would have been hard to maintain a second place, furniture, and kids are going to school in person, and all their activities…..
You know what? I might actually buy that book this year or next. I’m starting to feel like working for a company is socialism, working 50%+ a week to get paid the same is just not cutting it for me. It’s for a *chance* at getting promoted which are already scarce to begin with anyway given you’re competing against people who’s already working for the company.
I’ve never wanted to be laid off more in my life! Once I finish checking whether I met the required 40 credits to receive social security, I will be planning my escape if I met it!
Hi Sam,
Your point is taken that as real interest rates decline, it becomes harder to live off of investment income. I believe your exercise emphasizes the value of having cash flows other than investment income. Your bottom line emphasizes how severance packages buy you time to do your next thing. Cogent to your overall story here, you could motivate people to use that time to build a company that can provide a stream of cash flow outside their financial investments (such as residuals from a self-published book).
I love your content, but I think your “capitalized value” of severance is missing the mark. You already calculate the value of your example severance packages to be $45K and $51K. You go on to say “the interest rate is the biggest determinant in valuing the severance package,” but it doesn’t even go into the value calculation… You could discount the benefits to get a present value, but as you know, the effects of the interest rate will be nominal at that point.
If the unemployment benefits were a perpetual annuity, I would understand your approach. If you suggest that people do this several times throughout their career, that would get you an incremental step closer. If someone took a severance package every 5-10 years, then there could be an argument made to “capitalize” these benefits as you do using perhaps a 7.5 year period rather than 1-year. As presented, talking about the “capitalized value” of these unemployment benefits is a bit bonkers. Heck, it would require even more capital to provide those returns over the period in which those benefits are actually paid out (i.e. it doesn’t take 52 weeks to accumulate all of those unemployment benefits).
Yep, as we know, unemployment benefits and deferred compensation doesn’t last forever.
I was just showing another way for people to measure the temporary capitalized value of a severance. I will write the word “temporary” again so there is no confusion.
I think the window of opportunity is over the next six months to negotiate a severance. With enhanced unemployment benefits and the economy roaring back, over the next six months is the time to negotiate a severance and do something else. Maybe even relax, and it’s been such a difficult past 12 months.
The next time I find a 10 spot in my pocket I’ll contemplate how its akin to “temporarily” finding over $500! ;)
Cheers to taking advantage of any opportunity to pause, consider all that we have (financial and otherwise!), and assess our priorities in life!
Ha- I kind of do this when it comes to purchases now as I start to mull retirement. For example, if I buy a new iphone i consider that I’ll likely replace every 3 years. So, that $800 purchase is more like $17000 when you capitalize it at 1.5%. Buying and running a $30k car for 10 years will roughly average out to 15% of the initial cost per year, so that’s 300k needed when capitalized at 1.5%. Unfortunately this line of thinking kind of takes the fun out of splurges.
I’m the same way, and my wife HATES it. I always say… is that “XYZ” really worth another “x” years of work…
She now just tells me what happened after it happens to avoid the convo. I usually see the shiny new whatever it is at the house, and before I can question, she will say… “yea, that happened.”
The good news is while I’m reluctant to spend a dime if I can spend a nickel, she is open to making life better. In the end I typically benefit and my rational is you can’t take it with you. So, sometimes you have to appreciate that you can buy something, and just do it. Quality is usually better than quantity anyway.
It is odd to me that some people feel that they are “too good” for unemployment benefits. And that some people are too lazy to even try. There’s nothing embarrassing about filing a UI claim. I’ve done it before on a couple occasions and never had any issues with it. It’s pretty straight forward to file a claim. And makes sense to include the value of unemployment benefits into a severance package.