Green Retirement

If you are a Ford employee, should you take Ford Motor Company’s early retirement buyout, or keep working?  The last time Ford offered an early retirement incentive program, out of 89,000 employees, only 1,000 employees took the company’s package.

The question you need to ask yourself, before taking Ford’s offer is, can I retire?  Ford’s current early retirement package is a bit complicated.  The amount of the package varies depending on age, years of service, and includes a $25,000 car voucher.  However, some Ford employees, could be eligible for $70,000 as part of the early retirement package.

Now $70,000, is not a lot of money for retirement, and no Ford employee can retire on just the company’s package alone.  $70,000 translates into only $230 in monthly retirement spending.  However, what if you are already in a position to retire, $230 per month could pay for your utility and cable bills in retirement.  When you count your net worth, a pension if you are eligible, plus the Ford company offer and discover that you can retire today?  Think it’s impossible? Think again.

You need much less savings to retire than you’ve been told.   Talk to any financial planner, try any online retirement calculator, and the result will be a guess that over-estimates your retirement savings needs.  Usually by hundreds of thousands of dollars, sometimes by over a million dollars, forcing you to work longer than necessary.

Financial planners, and online retirement calculators, use a guess (80% of your salary) to calculate how much savings you need for retirement.  Your salary is irrelevant, when it comes to retirement planning, how much you spend in retirement is what counts.  Green Retirement planning calculates how much savings you need for retirement based on how much you plan to spend in retirement.  A much more accurate method that gives you, not your salary, control of your retirement savings needs.

Here’s an example: If you are a couple who earns $80,000 per year, traditional retirement planning calculates, you will need $1,600,000 to retire.  If you create a retirement budget of $2,250 per month, Green Retirement accurately calculates, you will need $675,000 to safely retire.  That is almost a million dollar difference.  Are you a Ford employee with a net worth of $600,000?  Throw in the Ford early retirement package, and on your $2,250 per month retirement budget, and you can retire today!

Here is how Green Retirement gives you control of your retirement savings needs.  If you reduce your retirement spending budget, from $2,250 to $1,750 per month, you reduce the amount of savings you need for retirement from $675,000 to $525,000.  If you are a Ford employee with a $450,000 net worth, create a $1,750 per month retirement spending budget, take the Ford offer and you can retire today!

If you and your spouse are eligible for pensions, you can retire with less saving.  For instance, if you and your spouse can begin receiving $1,000 in monthly pensions, on a $1,750 per month retirement spending budget and with the Ford offer, you will only need a net worth of $155,000 to retire today!  Yes, you read that right, retire today with only $155,000, in retirement savings.

If you are a Ford employee, I strongly urge you to find out how much savings you need to retire  by trying our free retirement calculators, before you reject the Ford early retirement package.   Green Retirement, host of the retirement blog, also offers free retirement planning.  If you have any questions, leave a public comment below, or use the contact section of our website to remain private.

Ford Motor Company’s early retirement package, at first glance, may not seem like enough money to choose retirement.  But when combined with your net worth, any possible pensions, and Green Retirement planning, it may be enough to help you retire today!