Have You Been Given a Golden Boot?

by Investing School on March 8, 2013

Like so many other euphemisms, the Golden Boot sounds better than it is. The term is a polite way of saying that you have been offered an opportunity to leave your job, along with some nice incentives and benefits. Most commonly offered to an older employee, the Golden Boot can be a way for a company to avoid a lawsuit relating to age discrimination.

While the company may ask very nicely and provide you with extra financial incentives to leave, the long and the short of it is, you are being dismissed. How significant the benefits are should affect your willingness to consider the offer.

There are many reasons why you may be offered a nice severance package if you are willing to leave prematurely. For example, a company may need to cut its workforce and letting older employees go without replacing them is a way to do so. Another reason may be that they want to cut salary costs, and younger employees have lower salaries.

Since the company can’t simply tell you that they are letting you go because you are too old or too expensive due to your experience (that would be age discrimination), they use the golden boot to get you to leave on your own. That is legal.

If you are put in this position your first move should be to consult with your financial advisor. You will need to figure out if you can afford to retire at this point, taking into consideration the incentives you are being offered. If the financial situation allows, this may be a good way to make the transition to retirement with something extra in your retirement fund.

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