I’m too young to be old.
My gut wanted EROP to stand for Exceptional Rewards for Outstanding People. But my brain knew it stood for a foreboding Early Retirement Opportunity Program. Or, minus the corporate doublespeak: Your days are numbered, bub.
My brain, in fact, had been preparing for this day for years — much as my gut didn’t want to.
I had a great gig for two decades. But with the publishing business imploding, my days as a USA Today marketing reporter — with a six-figure salary — had become about as sustainable as a popsicle on the sun.
Cost-cutting pressure these days is not limited to any one industry, as those in the energy and banking industries know too well. Just about anyone 50 or over stands a decent chance of being bitten by the buyout beast. What happened to me and more than 80 USA Today colleagues could be sprung on you.
So it’s your brain — not your gut — that needs to pay attention. Way before the “voluntary retirement” message hits your inbox, there are steps you need to take to be ready.
Some are about planning financially. Others are about taking stock of your talents and passions. Then there’s what I call the proctology moment, only because it’s so uncomfortable. Every employed person — particularly those 50 and older — should stand in front of a mirror and ask themselves: With your current skills, would your employer still hire you?
“If the answer is no, your job is in serious risk,” says Alan Johnson, managing partner of the compensation consulting firm Johnson Associates.
If you are 50 or older and answered yes, you’re either a terrific employee — or terrifically delusional. Most folks facing buyouts won’t answer the question honestly — even to themselves. “This is the biggest weakness most people have: being honest with themselves,” Johnson says.
That’s even more important now. About the only thing new in the world of buyouts — commonly called severance packages — is that the value of the offers continues to shrink.
WorldatWork, a nonprofit human resources specialist, recently surveyed nearly 6,000 corporate managers nationally on changes to the formulas in their company severance packages.
About 42 percent said that they had no formula. But of those that did, getting paid two weeks’ salary for each year of service fell to 16 percent in 2014 vs. 21 percent in 2011. In the same period, getting just one week’s salary for each year jumped to 24 percent from 20 percent, while getting a generous one month’s salary per year fell from 5 percent to 2 percent.
“They’ve gotten much skinnier in recent years,” Johnson says. “It’s no longer like winning the lottery.”
Not that you can feel comfortable even turning down a meager offer to skedaddle. The USA Today buyout email succeeded in raising the neck hairs — and heartbeats — of long-time employees such as me, by adding the warning:
“Regardless of the acceptance level of the Early Retirement Opportunity Program, we cannot rule out other actions that we may need to take in the future because of economic and business conditions.”
In other words, take this now or risk getting canned later.
At the moment I got that message, I was at my desk, listening to a lengthy Starbucks annual investors meeting that it was my job to cover. Although I had ignored a previous buyout offer, I knew I couldn’t keep wearing blinders. I tossed off my headset and raced downstairs.
A woman maybe half my age — who I had never seen before – weakly smiled as she handed me a brown envelope whose contents were destined to change my life.
It felt as cold as the backside of a snow shovel.
I hustled back to my desk to continue covering the Starbucks meeting. I felt a bit dizzy, as if I were starring in some episode of “The Twilight Zone” about a short, balding guy who arrives at work only to find out that, poof, his job of two decades no longer exists.
Thankfully, my wife, Evelyne, and I already had swallowed the best preventative medicine: careful — if not painful — financial planning.
Truth be told, we had been planning for this for years. In 2008, our cushy pension balloon popped. That’s when Gannett, publisher of USA Today, announced that it was “freezing” the company’s pension program. So we ramped-up our 401(k) contributions.
Then the furloughs began. The first year, it was for just one week. The next year, it was two. We doubled our mortgage payments, with plans to own our home within eight years. Talk about good timing — the home became ours last month.
With the help of my savvy financial adviser, we had also figured out a way, over time, to stuff four years’ worth of Virginia college expenses into two 529 college savings plans. Wisely, we had initiated these plans at the births of each of our two now-teenage daughters.
Because of the ages of our girls, life insurance was critical, too. That’s why, in 2010, I sought and found a new policy outside the company — at a better price. I knew the company policy would be toast if I lost my job.
Of course, we paid a price for all of this.
We took fewer and shorter trips to my wife’s native home, Switzerland. And fewer trips to the beach. Fewer shopping trips to the mall. Heck, fewer trips to our favorite Ledo Pizza. The money saved had to come from somewhere.
But it was this reality-based financial planning that let me make a logical, not emotional, decision to accept the buyout. It wasn’t easy. But because we were financially prepared, I could look the buyout brute in the eye without blinking.
Unfortunately, most folks don’t plan for that possibility, says Jean Setzfand, senior vice president of programs at AARP, who oversees financial education programming. “Accepting a buyout should be a long-term plan that you’ve been thinking about for some period of time,” she says. “When the buyout package comes, don’t let your emotions be the main driver.”
After all, the real question for most of us isn’t at what age you want to retire, but at what income? So beyond financial planning, it’s no less critical to plan ahead in terms of job skills, too.
“Regardless of your age, you should always be managing your career,” says Bram Lowsky, group executive vice president of the Americas at the global career consulting firm Right Management. “You should constantly be updating your résumé and thinking about your career path.”
Not that I did. Far from it. Long before the buyout, I didn’t work hard enough to upgrade my technology skills at work. Bad move. Even if those skills would not have protected me against the buyout, they certainly would have made me more immediately valuable back out in the job market.
I also never undertook a job search, in earnest, until the buyout papers arrived.
And I didn’t even try to negotiate the terms of the buyout with my employer — which I’ve since learned was beyond dumb. If the buyout comes knocking at your pod, don’t just take it — negotiate.
“Everything is a negotiation,” AARP’s Setzfand says. “You hurt yourself by not asking, but most people don’t.”
Which brings up another buyout oops: I didn’t have my attorney look at it. I signed one of the most important legal documents of my life and no legal eyes looked at it except my employer’s.
“Never sign a buyout agreement until you fully understand it and have shown it to a lawyer,” Setzfand says.
One important thing I did do right before accepting the buyout: I reached out to faithful friends for support. I needed their help to look forward — not backward.
“You have to take care of yourself emotionally, physically and psychologically,” Lowsky says. “It’s much harder to find a new job when that is not in alignment.”
I looked up a former journalism professor, now 83, who first taught me how to think big-picture more than 40 years ago at Colorado State University. He told me to take the buyout if I could afford to, then offered this sage advice: “Whatever you do next, be sure it makes you happy.”
Happy?
As he uttered those words, I was feeling more like Grumpy. When you’re figuring out whether to pull the plug on a 35-year career in big-time journalism, “happy” is hardly a word that is top of mind.
But it’s now nearly seven months since my buyout, and I’m finding a rhythm. The happy stuff is starting to take root. I have cobbled together enough interesting freelance writing and marketing consultation gigs that I know I can at least feed my family. Yes, I miss the fat salary, the newsroom banter and the phone calls that get returned in a nanosecond — but not the mind-numbing stress of a workplace in distress.
When your buyout comes knocking, it ultimately will be defined by how well you’ve prepared for it. I’m not the only one who is too young to be old.
So are you.
Horovitz, a freelance writer and marketing consultant, is a former USA Today reporter and Los Angeles Times marketing columnist.
He can be reached at brucehorovitz@gmail.com
