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Did You Receive a Voluntary Retirement Offer From UPS?

May 01, 2018

Don’t try to figure out your buyout package alone, email our specialist or call (404)704-2966 if you have any questions.

Update January 1, 2022: There is not a current buyout program being offered with UPS. We can help with their 401k, Computershare, open window selling, LTIPS and RPU planning as well as planning for retirement with their pension information.


  • UPS just announced that they would be offering buyouts to some management level workers by the end of 2020, and mid 2021.
  • You need to calculate the numbers. Determine if the math favors a lump sum offer or monthly payments.
  • Consider the following factors before making a decision: age, retirement account balance, healthcare, taxes, inflation, and legacy.
  • It is important to decide if you're ready for the lifestyle change that comes with retirement.
  • Lastly, consider speaking to an experienced professional to ensure you are making the best decision for your unique retirement situation. 


UPS just announced that they would be offering buyouts to some management level workers by the end of 2020, and mid 2021. If you or your spouse are eligible for early retirement from UPS, you might have received a voluntary retirement program (VRP) offer. This means that instead of waiting to retire, you would cease working at UPS within the next year and receive a voluntary retirement payment. You could then start taking your UPS retirement plan benefits immediately or at a later date. Recipients of the offer may have a limited time to accept. But how do you evaluate your options? Should you stay with the pension, take a lump sum, or start monthly payments? There are a number of things that you need to consider when making your decision. 

Here are the things to consider before taking a early retirement offer:


1. Calculate The Numbers

The first thing that most people want to discuss are the numbers.What option does the math favor. Lets discuss some example calculations:

Let’s look at a hypothetical example. A 40-year-old previous UPS employee may be offered a $15,000 lump sum or $70 a month for life. With the pension, his benefit at age 65 would be $388 a month.

A life expectancy of 80 years would mean that the total pension payout would be $69,840. If he went with the $70 a month immediately, his total payout would be $33,600. That’s about half of what he would get from the pension. However, if he only lives to age 70, starting payments now would be a better deal, and he would end up receiving almost $2,000 more.

How does the lump sum compare to these options? That will depend on where you put it and your rate of return. A $15,000 lump sum growing at 6% until age 80 will become just under $155,000. That, however, doesn’t take into account taxes, fees, or withdrawals.

The above calculations are simple, but in reality, there are a lot of other factors that must be considered.


2. Consider These Important Factors

  • YOUR AGE -You are eligible for this voluntary retirement offer as early as age 55. But if you weren’t planning to retire until 65, the amount you would receive in a buyout may not be worth it compared to how much you would earn in those ten years.
  • RETIREMENT ACCOUNT BALANCE - If you were counting on not only more years of a full salary, but also more time to contribute to your retirement plan, this option may not be in your favor. 
  • HEALTHCARE - If you are under age 65 and not yet eligible for Medicare, you will need to enroll in the Retired Employees’ Health Care Plan (REHCP). The cost of coverage for yourself and your dependents may be higher than future Medicare costs if you retire later.
  • TAXES - This payment is offered as a lump sum and also includes the cash value of any unused vacation days and any management incentives or allowance. Applicable taxes will be withheld from your VRP Payment and you cannot contribute any portion of this payment towards your UPS 401(k).
  • INFLATION - A monthly $388 payment will not buy you nearly as much in 30 years as it would today. How will inflation impact your benefits?   
  • LEGACY- Your pension may have a 10-year benefit for your spouse after your death, but it will provide nothing for other heirs. An IRA, on the other hand, will be passed on complete to any heirs.


3. Decide If You're Ready For The Lifestyle Change

Were you already thinking about retiring or is this offer just putting the thought in your mind now? Numbers are important, but retirement is about a lot more than just the numbers.

Leaving the workforce behind is a major lifestyle adjustment. Are you ready to say goodbye to your working years? If you’re yearning to slow down and relax, retirement may be the right thing for you. But if the thought of sitting at home all day and not being productive raises your blood pressure, it may not be the right time for you to retire.

How would retirement affect your social life? Whether you truly enjoy your colleagues or just tolerate them will play into your retirement decision as well. Some people keep working even after they can afford to retire, simply for social reasons.


Final Takeaway

This is a weighty decision with many potential consequences. You don’t want to make a choice you will regret just because you didn’t have the full picture. Retirement is a deeply personal decision and what works for one person might not be ideal for another.

At times like these, you need to consult a professional. An experienced financial advisor can help you evaluate your choices and develop strategies and perspective that will help you make the best decision for you and your family. At ATL Global Advisors, we specialize in helping UPS employees and retirees with their comprehensive financial and retirement planning needs. We can help you take the necessary steps to set yourself up for continued success.

Don’t try to figure out your buyout package alone, email our specialist or call (404)704-2966 if you have any questions.

These examples are hypothetical only, and do not represent the actual performance of any particular investments.  Investments in securities do not offer a fixed rate of return.  Principal, yield and/or share price will fluctuate with changes in market conditions and when sold or redeemed, you may receive more or less than originally invested.