After a fruitful career run, the prospect of going out while you’re still on top may sound appealing. The option to retire before you are due, with a substantial retirement package in hand, sparks the imagination with images of living comfortably while pursuing other passions.
However, unless your company is on a downsizing drive, your employer may not be too pleased to allow you to go early and, on top of that, give you a worthwhile payout. This is where negotiation skills come in handy.
With the right negotiation skills, you can turn your dreams of early retirement into concrete reality. So, let’s take make that first move with these negotiation tips.
Be clear about what you need
According to negotiations.com, crystal clear communication increases the chances of a successful negotiation. So, the first step is to let your employer know that you are thinking of early retirement.
It’s important to explain why you have your sights set on early retirement. For instance, you are in the early stages of a chronic health situation, and you need to focus on your healing without the pressure of work.
Avoid leaving room for misinterpretation. For instance, your employer might think you’re cunningly gunning for them to talk you out of leaving with a pay rise. Expressly state your expectations while making it transparent that you are open to negotiations.
Make it plain to see the ways you have contributed to the company’s growth including your achievements and surpassed targets.
Companies typically have regulations in place to recognize hard work and loyalty which is likely to improve how your request is received and processed.
Show what’s in it for the company
Negotiations are about exchanging value so be upfront about what the company can get out of the retirement agreement.
Crunch the numbers to show the company how much they would save in the long run by letting you bow out early. If your contract includes a yearly raise, make it known to the employer how much more you may be raking in by the time you reach retirement age. Throw in a comparison to how much less a new hire would make to give your argument a punch.
In addition, show the company how offering an exciting retirement benefits package can create a positive buzz that boosts and motivates the morale of their younger workforce. Prospects of a similar offer in the future may drive newer employees to perform better and stick with the company for the long haul.
An innovative package can also show that the employer has people at heart. Once news reaches social media sites, it can raise the company’s image as an employer of choice, helping to attract talent.
Advocate for your package
Successful negotiation often comes down to how well you’ve done your groundwork to present a solid case.
Research your company’s policy to gauge how early retirement is perceived and the kind of benefits that employees usually get. Also, find out within your industry how other companies handle the process. Once you have a full picture, prepare the main discussion points.
Here’s some of what you can include in your discussions.
Your pension
You can negotiate with your employer a deal that allows you to receive the full pension benefit. For example, the company can give you bonus years of service to increase your pay-out. Find out how your plan works and what’s legally acceptable in your area.
Health cover
Consider asking your employer to let you stay on the company’s health plan until you reach your normal retirement age.
Alternatively, you can request for the company to meet the cost of your retiree coverage or COBRA health benefits.
Extra pay
You can negotiate for a lump sum early retirement offer, which includes:
- A one-time gratuity based on your years of service. For instance, a year’s worth of your usual monthly salary.
- Your severance package. For instance, you can ask for five weeks’ worth of pay for every year served.
More perks
You can also squeeze in some non-monetary perks. For example, for your employer to continue with your life insurance policy payments until the time you were supposed to retire.
You can also ask the employer to cover the cost of your financial planner to keep you on track with your finances during retirement.
When all is said and done, you may soon be enjoying your early retirement if your master how to communicate, research and present your case.