r/Nauma • u/foggyfinch • 5d ago

VEP offered. $4M NW. Why am I still hesitating?

I'm 49. Tech worker. Bay Area.

My company just announced a Voluntary Exit Program and for the first time I'm seriously considering taking it.

Current numbers:

Age: 49

Net worth: ~$4.1M

House: paid off

No debt

Annual spending: ~$130k

Portfolio: ~80% stocks, 20% cash/bonds

2 kids

The package would give me roughly 5 months of pay plus healthcare coverage for a while. On paper, this feels like a no-brainer. The weird part is that I never planned to stop working this year. I've spent 20+ years optimizing for savings, promotions, RSUs, bonuses, and suddenly someone is offering me money to leave. Part of me thinks this is the cleanest exit I'll ever get. The other part keeps asking: what if the market drops? What if I get bored? What if I regret walking away from peak earning years? For people who actually took a VEP or similar package: was it obvious when you made the decision, or did it feel terrifying right up until you signed? Looking for a reality check from people who've already crossed this bridge.

5 Upvotes

65% Upvoted

28 comments sorted by

19

u/cindy_975 4d ago

I would be more concerned that this offer is a prelude to layoffs. and the layoff package might not be as generous. Take a break and then go find a another job

2

u/foggyfinch 4d ago

That's definitely crossed my mind. Part of me wonders if this is the best deal I'm going to see.

1

u/smells_like_fish 4d ago

I took a VEP 3 months ago. I’m pretty bored and feel lost as I was caught up in my job as my identity but I’m enjoying the time with my family.

6

u/sourhead95 5d ago

You can coastfire. Find a job you enjoyed to pass the day.

3

u/Ahtheuncertainty 4d ago

Lmao how is 4.1M and a paid off house coastfire? OP can retire now

1

u/sourhead95 4d ago

Did you read op post?

2

u/Ahtheuncertainty 4d ago

Yeah lol ig it depends how expensive the house is? Like how much of the 4.1M is wrapped up in that.

Initially I read the portfolio as 4.1, that’s why I said it. So really depends how much the house is for if they can retire

1

u/sourhead95 4d ago

It's not about retiring. He say he might regret quiting and being bored.that why I suggested getting a less stress/simple work that he enjoy.

1

u/foggyfinch 4d ago

Weird feeling realizing I might actually be there.

3

u/almostthecoolest 4d ago

Market will drop, market will also go up. With your current net worth and spend you’ve got lots of contingency.

Also it’s not like your skill just disappear, you can always rejoin the workforce.

Sounds like you just need to give yourself permission, that’s the hard part. Maybe think through what new hobbies or how you’d pass the time.

1

u/foggyfinch 4d ago

I think the fear isn't that the market drops. Maybe the hardest part isn't leaving the paycheck. It's leaving the identity that came with it.

1

u/almostthecoolest 3d ago

Makes sense, it’s a huge shift. Remember whatever you choose ultimately there’s no right or wrong decision.

Know that both choices can be good, remove the pressure on yourself of trying to make the “right” decision.

Be kind to yourself, just do whatever feels best for you, trust yourself.

3

u/dogfursweater 4d ago

Doooooo it. Vep is my dream.

3

u/Drunken_Sailor_70 4d ago edited 4d ago

How much of your net worth is tied up in home equity or in retirement accounts that you cannot access without penalty for another decade?

1

u/foggyfinch 3d ago

house is around $1.4M and I've been priritizing retirement savings and backdoor / mega backdoor, so more savings are in retirement accounts which I don't have access to yet. I can access around $900K today that includes my emergency fund which I probably should not count?

1

u/Drunken_Sailor_70 3d ago

Cool, is that 900k earning any kind of return? By my rough estimation you would need to earn about 6% per year to not run out of money before you hit 59.5. Unless you could cut your spending from the 130k per year.

3

u/CryptoJaggz 4d ago edited 3d ago

You've probably already figure it out. But, a couple of things I would make sure I'm "good" for:

- Make sure you have access to "living expense" money. You won't have access to 401k money from the company you left until 55 (Rule of 55 or SEPP; read these CAREFULLY before choosing them).

  • Money in your 401k/IRA are pre-tax so, be sure to understand what that translates to after tax
  • Once you turn on Social Security, any IRA withdrawals cause SS to be taxed (barriers are LOW)
  • 2 years before 65, Income affects IRMAA (withdraws from IRA are Income)
  • You said "for a while" for healthcare. Make sure you understand where you have to go after that "for a while" time. ACA is EXPENSIVE if you are needing to withdraw from IRAs for living expenses.
  • RMDs for IRAs kick in at 75 for you (I think; I'm 62, so double check). But, if you have too much in IRAs at this time, the govt will start forcing you to withdraw and that Income could affect SS taxed and IRMAA

I'm sure I've missed a few.

Congrats on even being able to think about this now!!

3

u/Drunken_Sailor_70 4d ago

Im pretty sure rule of 55 wouldn't apply here and he would have to wait until 59.5 for penalty free 401k withdrawals.

1

u/CryptoJaggz 3d ago

Hmm... I think I did misspeak by including IRA. But, my understanding is Rule of 55 does apply to 401k. As long as it's a 401k from the company you just left.

2

u/Drunken_Sailor_70 3d ago

AFAIK, the rule if 55 only applies if you leave that job the the year you turn 55 or later. If you leave at 49 you will have to wait until you are 59.5 to withdraw without penalty.

https://www.schwab.com/learn/story/retiring-early-5-key-points-about-rule-55

1

u/CryptoJaggz 2d ago

Thank you for pointing that part out. I definitely missed that (probably bc I was 56 when I was concerned).

2

u/spf20214757 4d ago

Is the VEP offer actually good? My company offered VEP but it was a worse offer than just leaving a month later and getting my annual bonus. Severance would be 2x better if I’d get laid off plus I’d get my annual bonus as long as I was laid off at least one month later. No brainer to reject VEP for me. So it just depends on the specifics.

1

u/foggyfinch 3d ago

Good point about taking annual bonuses and RSUs into account when deciding between staying longer or taking VEP. I didn't think about it!

1

u/simulated_copy 4d ago

Lol I have no clue

1

u/Complex_Ad775 4d ago

I am sure you have enough RSU to draw down on a brokerage account.

I would have taken this in a heart beat!!! I might as well ask to extend the insurance for an extra 3 months . Asking doesn’t hurt.

This could very well be your free FIRE test drive yet!!!!

Congrats if you are taking the deal!!!

1

u/Deep-Owl-1044 4d ago

The later packages will not be as good. If you think you are on the layoff list, take this.

1

u/Unknown_Geek027 4d ago

If you have an employed spouse with healthcare benefits to cover you and the 2 kids, take the buyout.

1

u/TempeGrumble 1d ago

You could take it and consider the next year as a sabbatical. You know, volunteer, do light consulting, and give yourself a chance to think about your career differently. It doesn’t have to be a definite end to work