Have any of you taken the lump sum?
Pros and cons ? (Taking the health insurance factor out) Is it taxed hire than the regularly distributed wage ?
10 replies (most recent on top)
- Yes. Wording along those lines has shown up on many layoff letters.
- I've not heard of anyone getting laid off without severance this year. It might exist, but so far the rumors of "inconsistently meets" meaning you don't get severance don't appear to be true.
- See above. As long as you aren't "fired for cause" I haven't seen any reports here this year of anyone getting laid off without severance.
- OK, so this came up on here. WF updated the wording to make it more clear that if you receive an RTO order and do not show up for your assigned number of days, in that case you WILL be fired for cause. No notice, no severance.
Can someone who knows comment on:
Out of curiosity, does one get a severance if -
- Your role has been retired
- Your performance has been poor
- Your behavior in the team has been a problem
- You are supposed to RTO, and you did not.
Stopping contributions a to 401k due to no match is terrible advice. The are tax advantages to a 401k, the match is icing on the cake. Perhaps, there are reasons someone needs the cash now, but generally speaking, consistently contributing to a 401k will make your life exponentially better in retirement.
I recently thought about this same question and while I'm no Tax Attorney, Tax Advisor, or Financial Advisor, my perspective is it depends on one's own personal situation; (financial, how many weeks are remaining, how big is the severance payout lump sum versus bi-weekly pay against the deductions, etc.).
A couple of thoughts; If you are still doing the bi-weekly payments I would go into Empower and decrease your 401k deductions to "0%" since you will not be receiving the 401k company match. Might as well get full-on cash in your severance weeks.
If you do obtain a new job re-evaluate one lump sum payout versus continued bi-weekly payments, knowing that some of that will be going to pay for medical premiums.
Again, it all depends on one's own situation, as everyone is different; some may not be paying for medical, benefits, or if are, don't need it due to other coverage. May need the one lump sum payout.
I took out the lump sum and bought 9/1 wfc 45 puts. Already out.
Not sure how to get aboves attention. Or tag them. 😂😂. If you lump sum you do lose insurance if you take by weekly payments you will still receive your Heath benefits till severance ends.
That first post is right though: do you NOT get back money that would have been in the following tax year if you take it all in this tax year.
Your overall taxes are higher if you lump sum a 10 month severance all in 2023 rather than letting it split between 2023 and 2024.
If you stick with biweekly payments for the benefits, does WF continue to pay part of the insurance premiums?
while they may tax it initially ultimately when you do your taxes next year you'll get a refund if you overpaid. id much rather take the money now, out it in a high yield savings and make some money on it.
Con: taxed at a higher rate the longer you've been here. Think bonus check if you're not compensated in stock.