As enticing as it sounds, an early retirement buyout could be the kind of offer that you can and should refuse. A company may say that you can retire at age 50 or 55, but that doesn't mean you can actually afford to do it. Given the rush of buyout offers from automakers and other companies, here are some tips for reviewing your options and making a move. Figure out whether you can pay the bills for a lifetime. Too often, people look at a buyout offer, eyeball their savings and figure they can make a go of it for the next couple of years.
Inflation can push up costs considerably in a few decades.
Assume that inflation is about 4 percent a year. You would need to triple your money in 30 years just to break even with inflation. Sometimes, you can sell the family home and move to the cottage to cut costs. Sometimes, you can get a second job. But such details often cannot be worked out in a few weeks, and you may be given a tight deadline for accepting an offer.