Are You Financially Ready for the VSP?

If you work for Verizon, you may be aware of the latest VSP or Voluntary Service Program.? In fact, you might be one of the folks who received an email tapping you on the shoulder.

(Note: We created a short video about this topic. You can view it at https://youtu.be/j4oTckavRyk )

Much of the details are already public knowledge.? Verizon is offering 60 weeks of compensation plus various add-on payments.? The decision period opens June 17 and closes July 19.? Separation dates are staggered through the first quarter of 2025.

None of that helps you determine if this is the offer for you.? So let's delve into some thoughts.

This is a BIG package!

It is easy to focus on the amount of money Verizon is throwing at you to leave.? It's about fifteen months of salary when it is all added up.? That can be very attractive.? It could pay off some debt.? Or cover college costs.? Or it could be the down payment on a vacation home.

Your bigger question should be:? Do I have enough other resources to retire or separate comfortably?? This means different things based on your age.??

A good rule of thumb - and I hate rules of thumb - compares your retirement savings to your income.? For instance, if you are 45 and have at least 5x your income saved for retirement, you are ahead of most Americans - even most successful Americans.? If you are 55 and have more than 10x your income, you are likely on track for a successful retirement.? And if you're 65 and have at least 15x, you might be lighting your cigars with $100 bills.??

But that's just a rule of thumb.? I've seen people with massive portfolios who cannot retire.? And I've seen people with a fraction of this type of savings that can successfully retire because of quirks within their own situation.

What this means is you will need to run the calculation yourself - or have a professional do it for you.? I will say that Fidelity has amazing software for calculating your retirement success.? But it's a game of garbage-in, garbage-out.???

You need to account for all the variables now and in the future.? The software is only going to do what you ask it to do.? And if you end up with a bad result and run out of money in retirement, you don't get a second chance.

Life After Verizon!

Next, what’s. . . . .well, next?

Is this your last rodeo or are you going to transition to another role in another company?? How long will that process take?? What sort of compensation are you expecting?

All of these questions need to be answered NOW!? Because you don’t want to accept a VSP and be left out in the cold.

How’s Your Health?

Finally, what about health insurance?? We are talking to a number of employees who are younger than 65.? Health insurance for you could be expensive - possibly $15-20,000 per year!? Do you have the resources to pay this additional expense between now and Medicare?? What sort of coverage do you need?? Are there alternatives such as Obamacare that could help?

How To Get Help!

Making this decision is no easy task.? It requires careful planning in order to make the best choice.? I’ve had over 30 years experience helping Verizon and other Telecom employees navigate through retirement offers, RIF’s, VSP’s and ISP/IPP’ - as well as a myriad of other issues.? If you have questions, feel free to reach out via LinkedIn Messenger.??

You can also check out our podcast at https://your-telecom-retirement.blubrry.net/

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