Suggestions for Those Being Let Go By GM

I don't normally post headlines but this just seems staggering to me. GM will get rid of 25,000 employess by 2008. Some things to think about for those who may be losing their jobs:

1. Don't make any rash decisions regarding your 401(k) or other retirement plans. Take your time and don't let your HR department try to rush you into any decisions.

2. Think long and hard before accepting any sort of annuity-type payout. When my dad retired from his company several years ago, they told him his options were a single-life annuity or a survivor annuity. They FAILED to mention that he could take a lump sum. Fortunately, he asked about a lump sum. Don't just accept what your HR department says.

3. Don't just roll everything into an IRA. Although it is unlikely, you may want to use a little-known tool called the NUA (Net Unrealized Appreciation). It is a very complex topic and one you definitely should not try to do alone. First I would suggest reading about NUA in Ed Slott's The Retirement Savings Time Bomb. If you think you qualify, find a good advisor to help you with the transaction.

4. Watch out for brokers trying to get you to roll over everything into an annuity. Annuities may be good for some people but the majority are sold unnecessarily. Be sure and read all the fine print and maybe even get a second opinion.

Those are just a few things to consider.

Tags: GM to Layoff 25,000, Things to Think About When Losing a Job, Early Retirement