If you’re preparing for or considering a career change and your annual bonus payment is approaching, how to time your retirement payments is an important issue. The obvious goal is to arrange retirement so that you can receive your annual bonus. Learn how in this article.
If I retire early (before paying), can I expect to receive all or part of the bonus I earned?
If there are any bonuses, the short answer to the question is “no”, probably not. If your bonus is based on commissions or other performance metrics, you may be eligible.
Read your employment documents carefully. Employers may not be obligated to pay bonuses for early retirement unless the letter of offer or contract of employment specifically states that bonuses will be prorated upon voluntary termination. If in doubt, please seek legal advice.
If you leave before the payment date (rather than voluntarily leave), you are more likely to receive some form of bonus payment.
Of course there are exceptions. If you have a good relationship with the retiring company executives, they have discretionary control over bonus payments, and you handle the retirement appropriately, you may be paid a performance bonus. it happens. However, that is the exception.
In general, if you need to retire early, you do so without a bonus payment, unless your compensation plan formalizes it.
If getting that payout is important to you (i.e. the opportunity cost of retiring early and the opportunity cost of waiting for a bonus date), you should keep doing it.
When should I retire with my annual bonus payment?
Most companies require you to be an active employee at the time of payment. This means that once you have the cash in hand, you should retire with proper notice.
This also means that you do not share your intention to leave before paying the bonus.
Check the terms of your employment contract, local laws, and personnel documents to see if your company allows bonus payments before the date. If in doubt, please seek legal advice.
That doesn’t mean you can’t prepare well or get offers from other companies.
Why you need to proactively plan your career change in advance
Don’t let this happen to you…Retirement for more than 2 years
One caveat I’ve learned from working with many career coaching clients over the years is avoiding late retirement.
I’ve seen clients “decide” to move after receiving their annual bonus.
After that, they took no effective action or fully committed.
1st quarter, 2nd quarter passed, they wanted to move, but already Next Bonus for the year and felt they didn’t want to give it up.
That means staying in the job you were about to quit for a year.
If you’re determined to take action, feel bored or stuck, are looking for a change, or just want to find better opportunities for yourself in general, start doing your homework early. please give me.
Easily plan your positive career progression
Consider investing in professional support. Not only do we provide expertise, insight and clear instructions. You also get accountability. Set up a discovery call to see how we can support your company’s strategic career advancement.
What if I have a job opening that needs to be started before the bonus is paid?
When it comes to annual bonuses, we recommend looking at the big picture.
If the perfect opportunity comes before you receive the bonus and the bonus amount is not a big part of your reward package, be cautious about whether giving up a truly powerful professional opportunity is worth the one-time payment. Please consider. .
Another factor is the timing of the decision. If you decide to quit your current job over the summer, for example, your bonus won’t be paid for another 6-8 months, but whatever the reason for your decision to quit, that’s a long time to put up with. . Is your resume well written? have you achieved anything?
Be intentional about the career move you want
Money plays an important role in our lives, and it often makes sense to wait for it to run out.
But look at the big picture.
Analyze the opportunity costs of staying and moving.
And start marketing yourself. Exciting opportunities make it easier to make decisions.
Contact us confidentially to discuss how we can support your career growth.
