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…"As a result of global competition and industry consolidation, many companies are extending early-retirement incentives and severance packages to employees [to] rein in costs," says David Kudla, chief executive of Mainstay Capital Management LLC, an investment advisory firm in Grand Blanc, Mich. …

…For would-be retirees, "the single biggest mistake is accepting a buyout without first developing a comprehensive income and investment plan that realistically accounts for retirement risk," Mr. Kudla says. Often, "there's all this money, and people really didn't go through the planning process," he says. "Five or 10 years after taking a buyout, they realize they weren't ready. Because of that lack of planning, they're back in the work force, sometimes in a job they really don't want to be in." Would the buyout lump sum plus your savings support your income needs throughout retirement? A 65-year-old man has a 50% chance of living to age 85 and a 65-year-old woman has a 50% chance of reaching age 88, Mr. Kudla says. And don't forget inflation's effect on your expenses. …


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