14,000 Ford Salaried Employees Offered Buyouts

Let’s remove the Ford-specific headline. Th fact is that companies are attempting to cut costs. Ford employees will face difficult choices. Here are a list of things to consider.

• Income replacement. Reportedly, the buyout would include between 3 months and 18 months of a person’s salary. Then what?
• Pension. While mass-conversion of people’s pension to a lump-sum buyout option is not allowed any longer, this is different. For some, this is going to be appropriate. Not for everyone. There is no single solution here. In prior editions of this Newsletter, we have published MetLife’s findings regarding people’s ability to manage lump-sum payments.
• Health (surprise) will be an important input. We are biased here, but the fact is that all of the inputs to this important decision will greatly depend on a person’s health and the health of dependents. Healthcare costs, expected longevity, and financial portfolio risks are all affected by the health situation of the person. It is inconceivable that we would provide any financial advice to someone without the client’s thoughts and understanding of his/her health situation.