When Your Corporate Employer Offers the Buyout

Should you take the buyout? This NY Times article profiles several middle-aged (50ish) people who left the employ of large public companies. What do you do next?

I always enjoyed reading articles about how people evolved into becoming franchisees.  The article starts -

THEY were all on different career paths, but they had one thing in common. In midlife, well before they were ready to retire, they decided to take buyout packages.

The first person profiled is a former attorney and senior executive from JP Morgan Chase who earned a “six figure” income. She is now happier in her role as a not-for-profit director helping women over 50 network. Her friend’s advice was, “All the truly interesting jobs pay under $75,000/year.” I’m sure that is true for many high paying occupations that are not entrepeneurial in nature.

The second profile is that of a former Delta pilot and current owner of an office supply franchise in Las Vegas.

“My wife has a good job as an administrator for the school district.” He hopes to pay himself a salary at the franchise soon.

“There’s a phenomenon called the ‘wealth illusion’ when people get a lump sum in a buyout,” he added. “Have they really assessed, ‘Can I do my own business?’ If they’re going to open a franchise, is there really a need? You end up in a posture where the actual economic status of most people is way, way off what you would assume from all that retirement advertising.”

For Mr. Vance, the risks of starting a business seemed lower than the near-certain disaster of staying at Delta. For now, as he tries to expand his franchise, he is also flying for a company that provides jets to executive travelers. It is not the life he envisioned when he joined Delta, nor is it the one he feared when the company started to shake.

He is not able to save much for retirement, he said. But after living for so many years in the air, “I’m finally able to get involved in things like the chamber of commerce, and I got to know my neighbors, so in that sense it’s been pretty nice. I grew up on a farm in Kentucky, so I’m no stranger to hard work.”

…the final paragraph about the renewed connection to your local community is an often overlooked intangible benefit of owning a franchise.

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