As Bobb Belfrom considers a buyout offer from Verizon Communications Inc., he’s pondering more than just the money.

“My focus has been on my career and on growing an economic base for my family,” said Belfrom, 53, a group manager for Verizon Logistics in Irving, Texas, handling materials management and purchasing.

“This is an opportunity to wind down and get back to doing things I’ve put on hold for 30, 31 years – time for travel, time with the family, time for golf, more leisure time.”

Reaching a decision isn’t a move Belfrom takes lightly. He started thinking a decade ago about what he wanted his retirement to be.

And he’s taking the right approach, experts say.

Dispel any notion that a buyout is an automatic one-way ticket to the good life. You’ve got to do some serious soul-searching and planning before deciding whether to go for it. You have two choices, and neither of them comes with a guarantee.

“A buyout package is not a fairy tale where you are free to make whatever choice you want and live happily ever after,” said Joseph Gallagher, director of executive compensation at Watson Wyatt Worldwide in Dallas, an employee benefits consulting firm.

It’s crucial that your decision-making process has two aspects: The numbers part and the non-numbers part.

First, the numbers.

“Many people underestimate the financial requirement for a successful retirement,” said Viktor Szucs, a certified financial planner at Quest Capital Management in Dallas. “Those without a financial plan have an especially difficult task because they have to start from scratch, and it is difficult to make smart decisions about money when the pressure is on.”

Here are some financial considerations:

Can you afford to retire?

Estimate how much you’ll need to live on. Then factor in what your sources of income will be.

If you want to continue working after you leave your current employer, that should go into your calculation, too.

“Make sure to use that severance package wisely,” said Bryan Lee, a certified financial planner and president of Strategic Financial Planning Inc. in Plano, Texas. “If you don’t already have an emergency savings, the severance package should be used to sustain you through your job search until you find a job.”

Can you find work elsewhere in your field or will you go outside your field? How much could you make?

A key question to ask is whether your job skills are easily transferable.

“This may not only be a difficult decision to make, but it can also be a difficult task to successfully execute,” Szucs said.

If you’re an older worker, be realistic about how employers may view your age. This doesn’t mean that you won’t find a job, but you may have to search a little harder.

“Despite the advantages of the older worker in terms of reliability, experience and work ethic, many employers are worried about the cost of medical claims, illness-related time off and younger managers/supervisors may prefer not to deal with ‘Mom/Dad,”‘ Gallagher said. “Post-50 job searches are challenging and difficult.”

Ask if your company will provide outplacement counseling.

“Typically, the companies don’t like laying off people,” said Alan Goldfarb, a certified financial planner and director of financial strategies at Weaver and Tidwell Financial Advisors Ltd. in Dallas. “If they can do something to help this guy make the transition – the more they can do, the better.”

What about health insurance?

If you accept the buyout offer, will the company continue to offer you health insurance? This is a key issue that many workers overlook.

Some companies will continue to contribute their portion of health insurance and require you to continue to pay the employee portion, Gallagher said. That would continue until your severance package runs out, after which the company is required by law to offer you continuation of coverage under COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act.

COBRA requires that health coverage be continued for 18 months, during which you pay the health insurance premium that your company paid at the group rate.

If you have questions about COBRA, ask your human resources or benefits department.

“Do you know what it will cost, and can you afford it?” Gallagher asks. “What will you do to replace it if at the end of 18 months, you are not employed?”

What do you know about your pension? If you leave the company, what would your pension benefit be? How do interest rates play into the pension plan? And how healthy is your company’s plan?

The longer you’ve been with the company, the better the payout at retirement. Changing employers might hurt financially, financial planners say.

That’s because of the way traditional pension benefits are calculated.

Workers typically accrue the bulk of their benefits in the last five to 10 years of service with their employer. Although workers must wait some time for a significant benefit to build up, when it reaches that point, it can whisk them up to a high pension level overnight. Key factors include how long they’ve been with their employer and their salary in the later years of their career, which presumably would be higher than when they first started.

Remember that as part of a buyout, you may or may not be able to get your pension in a lump sum. Most likely, you will not be able to get your benefit as a lump sum, Gallagher said.

Verizon is an exception. The company is offering to increase by 5 percent the pension benefits of workers who take the buyout package and is also allowing them to take their pension as a lump sum.

Also, pay close attention to interest rates, which companies use to calculate their pension obligations.

“A worker who is considering retiring needs to be careful to look at the interest rate that their employer is using to calculate their lump sum pension,” said Dennis Carpenter, a certified financial planner and president of International Wealth Management in Grapevine, Texas.

The interest rates companies use to calculate pension obligations have become a hot issue. The House of Representatives voted in early October to allow businesses to reduce their pension payments over the next two years by altering the payment formula.

The measure now goes to the Senate.

The best advice: Get a copy of your company’s pension plan and have a professional look it over.

In addition to the money considerations, employees considering buyouts should take a close look at the reality around them.

If you stay, is your job secure?

Be forewarned. If you decline the buyout offer, the company may lay you off anyway.

“What kind of performer are you?” Gallagher said. “If you are not in the top 25 percent of your work unit, you may be a potential target. Some companies use forced rankings in deciding whom to pay off.”

The other question: Are you worth your pay?

“Are you above the salary range midpoint and a lot of your co-workers are newer/younger employees and/or lower paid?” Gallagher said. “Be concerned if you are high-paid and not a top performer.”

Make yourself a valuable employee to your company.

“The key to staying on the payroll once you are able to find a job involves demonstrating to an employer that you are able to do many things during a period when many companies remain heavily focused on cost containment,” said John Challenger, chief executive of Challenger, Gray & Christmas Inc. in Chicago, an outplacement firm. “You should not only do the job that you were hired to do, but you should augment it with additional work whenever possible.”

This isn’t the time to be just punching the clock.

“Most employees put in their 40 hours a week, use all the sick and personal leave allotted and then some,” Challenger said. “This will likely not sit well with senior management, which is routinely accustomed to putting in long hours at work in today’s superheated business environment.”

Finally, there’s a more practical consideration to early retirement. What does your family think?

“Whatever you decide will affect them,” Gallagher said. “It’s important that you have their support, as well as the support of good friends.”

Also, are you personally prepared emotionally to retire and head off in a new direction? Do you even know what you want to do with your retirement?

“We’ve had many clients who retired, only to find that they weren’t ready to stop everything, and they didn’t necessarily have a life plan on what to do after retirement,” said Travis Carter, a certified financial planner at Middlebrook, Dryden & Carter in Plano.

“The last thing you want to do is to get the big package – all of a sudden, the ship is there. They say, ‘I’ve got to get on that ship,’ and it’s going in the wrong direction.”

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(c) 2003, The Dallas Morning News.

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AP-NY-10-20-03 0628EDT