Many employees of Eli Lilly will consider a Voluntary Early Retirement Program (VERP) offer as Lilly looks to workforce reductions in an effort to improve its cost structure. Approximately 3,500 positions are expected to be impacted by the reductions.
VERP offers can be complicated. You should compare the value of the enhanced benefits being offered to retire early to what you would get if you continued to work. By continuing to work you would continue to contribute to the Lilly Savings Plan (401k), accrue additional pension benefits and earn credits towards retiree healthcare. You need to weigh if those benefits would be greater than the benefits offered in the VERP. Early retirement could impact your Social Security benefits, which are based on your average earnings over 35 years of work. And it's important to know that the one-time lump sum payment is taxed as ordinary income and will be reduced by applicable tax withholding.
Beyond the above analysis, any employee considering the VERP should have a thorough understanding of what their retirement would look like. This includes knowing what expected expenses would be, as well as sources of available income and their amounts. This is best accomplished through a comprehensive retirement income plan, not an online retirement calculator or "financial advisor" available via phone at a call center. Something as serious and intricate as your retirement deserves more than a one or two-time chat on the phone with an advisor with whom you'll have no ongoing relationship.
Oaktree Financial Advisors has developed the Independent Professional Retirement Overview (IPRO), a customized retirement analysis that takes into account your specific Lilly benefit programs. We can help you determine if you can maintain your lifestyle throughout retirement based on an early retirement, a full retirement, or anywhere in between. There are many factors to consider. It includes evaluation of "what-if" scenarios so that you can make an informed decision about a VERP offer based on various scenarios.
Factors that often get overlooked or are misunderstood such as inflation, withdrawal rates from savings and healthcare costs, if not handled correctly, can have serious negative consequences on your retirement years. Many retirement decisions are irrevocable, so small mistakes now can have a lasting impact for years down the road.
If you would like to discuss this very important decision with one of our advisors, please click here, call us toll-free at 1-877-901-1631 or email us at email@example.com. Oaktree Financial Advisors can provide an Independent Professional Retirement Overview and help you evaluate "what-if" scenarios.
We have been advising our clients on this decision and we would be glad to assist you.
Oaktree Financial Advisors is neither endorsed by nor affiliated with Eli Lilly