If your boss offered you $100,000 to leave your job, would you? Early retirement packages are often offered to employees nearing retirement age before companies start issuing layoff notices. Not all employees are approached with these package deals. For example, employees with a certain level of seniority that also meet predefined age requirements may be eligible for the so-called early retirement package while others must wait and see if pink slips are in their future. Supposing that you do qualify and that your employer does offer you a sweet deal, should you take it?

Early retirement packages often sound quite generous. You may be offered a full year’s salary in addition to other incentives as well as severance pay. However, like most financial decisions, whether the deal is in your best interest depends on a number of factors including your personal financial situation, your age, your skills, the health of the company, the economy, your willingness to take risks, and the actual dollar figures of the offer. In short, does the early retirement package hold up?

Let’s look at a hypothetical worker earning $50,000 per year. An early retirement offer of $100,000 would equal two years’ worth of pay. On the surface, that looks great. But before you sign the papers, you owe it to yourself to consider the options. If you’re nearing retirement, have been thinking of leaving the company, or have been waiting for the perfect opportunity to start your own business, taking a package may be an excellent option. On the other hand, if you have a growing family, work in a profession with few job opportunities, or don’t think you can land another job that pays as well in the future, you may be better off waiting and seeing what the future holds.