Table: Your Options
You're 52, three years away from earliest retirement age of 55, your salary is $120,000 a year, and you expect 4% annual hikes. You're in a two-income household, so assume a 40% cost for taxes.
Stay at the company, and estimate three years worth of salary. Take the present value of that sum using a 5% discount rate.
Year 1: $120,000
Year 2: $124,800
Year 3: $129,792
Present value after taxes: $208,000
Take the $250,000 retirement bonus. You land a job with an annual salary of $60,000 after you leave the company.
Bonus after taxes: $150,000
Year 1: $60,000
Year 2: $62,400
Year 3: $64,896
Present value after taxes: $253,000
Data: Frank Marzano, American Express Financial Advisors