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Finding another position at 59 will be even more challenging although my former employer disregarded age when selecting talent.
If considers taking the severance option he should build a contact list that includes people he interacts with both in and outside the company immediately and keep that on a personal thumb drive (he will not have access to corporate resources). When appropriate he can let some of them know he is accepting a severance package and will have time available to lend them a hand. Continue to project a professional persona. He shouldn't share that he is planning to move in a year or two, that is always subject to change.
I have a similiar offer on the table and I am taking the severance. It was explained to me that severance is taxable income but it is not added to your earned income from your current job. Example: I earned 60K this year and my severance is 40K, my gross earnings are not 100K the severance does not bump it up. It cannot be put in your 401K either because it is not considered earned income.
You would also qualify for subsidised insurance premiums in 2014 under Obamacare. Your own pension and your wife's income combined are low enough to qualify. http://finance.zacks.com/severence-p...ions-2180.html
My severance was reported as wages and added to my income for the year. My W2 gross earnings were substantially higher because of it, and my SS benefit was adjusted upward because of it when I requested a recalc of my benefit. This was 2009.
My former employer (major law firm) is now litigating payment of FICA on these earnings. A letter I got earlier this year says:
Quote:
xxxx is the process of preparing a refund claim for the overpayment of FICA taxes due to a recent judicial decision. Please note that this judicial decison is not final, and in all likelihood will be appealed to the US. Supreme Court. However, we need to file this refund claim on or before April 15, 2013 in order to preserve our right to receive a refund of the overpayment of taxes in the event the decision is ultimately taxpayer favorable.
You may join xxxx's refund claim if you choose to do so. If you do, and xxxxx receives a refund from the IRS, we will issue a check for your share of the refund.
They terminated a lot of people, so the sum is probably substantial, if they can get it back. I did not join in this. If they win they get their share back, govt keeps mine. I'm hoping my SS benefit is not reduced because of their refund. We'll see.
Sounds like some employers are no longer withholding FICA on severance based on the 'recent judicial decision.'
Just found out that along with the severance, I will continue to keep my old medical plan for another 12 months. That's a big savings as well. Or, like many have said here - there is the unknown wilderness of Obamacare (if it actually happens).
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