General Motors recently announced a voluntary buyout to most of its salaried U.S. employees. General Motors has approximately 58,000 U.S. salaried workers; 35,000 of those located here in Michigan. Why General Motors is doing this, I’ll leave that for others to answer. The real issue to consider is what to do if you have received a voluntary buyout offer. Unfortunately, the days of generous buyout offers are long gone; however, it is worth evaluating the offer to determine if it is fair, based on your individual situation.

If you were thinking of leaving General Motors within the next year or considering retirement, the buyout offer probably makes sense. After all, you can receive up to a year’s pay as severance. On the other hand, if you had no intention of leaving General Motors, it is a much tougher situation.

If you received the offer but were not previously considering leaving General Motors, you should first evaluate your job security. If General Motors does not reach their quotas, I can assume that there will be involuntary layoffs. GM has changed their strategic priorities over the years and announced their move to a fully electric fleet. I assume this transition will also cause involuntary layoffs. Unfortunately, involuntary layoffs do not generally come with generous benefits. When discussing options with your leadership, it is a good idea to understand how secure you are in your job. If your job is at risk, this could be a good opportunity to voluntarily leave and pivot to a new career.

For many of you, the question will be whether or not you can afford to retire. Deciding to retire is one of the most important decisions you can make. From a financial standpoint, you need to evaluate your individual situation, particularly what it costs you to live. This is a critical number that you should use as your guide.  Remember, in retirement, you need a strategy to not only cover your current expenses, but also provide you with a rising income for the rest of your life.  To accomplish this, you will need to coordinate your investment portfolio and pension with your Social Security benefits. Knowing when and how to take Social Security is important to your overall strategy.

I like to say retirement is a brand-new concept in the history of mankind. For the thousands and thousands of years that mankind has existed, it has only been over the last 100 or so years that retirement has become a lifestyle choice.  Therefore, retirement is new, and it is also new to you.

Many people can make an informed decision without having to seek professional advice. However, if you feel you need assistance you should talk to a professional so they can look at your individual situation and help you make an informed decision. Remember, my definition of a professional is not someone who’s trying to sell you a product. Rather, it’s someone who is independent and looks at your situation, and only your situation.

We at Bloom Advisors are fiduciaries, which means by law we must operate for our client’s best interests. If we can help you make an informed decision, please do not hesitate to contact us. We are deeply familiar with these situations and the important considerations for you to evaluate. Unfortunately, GM does not give you much time to make your decision; therefore, don’t delay in reviewing your situation.

Remember, in making your decision, it’s not what’s good for General Motors, it’s not what’s good for your next-door neighbor, it’s what’s good for you.