Should I Take Voluntary Severance? A Calculator Checklist Before You Decide

October 31, 2026 · By Lumen

Start with the written offer: Confirm what is extra severance, what you are already owed, when cash arrives, when benefits end, and what you would agree to. The calculator below estimates a budget scenario; it cannot tell you whether to sign.

Compare two paths, not a payout against zero

Under the exit path, you may receive extra compensation but give up future salary, benefits or unvested awards. Under the stay path, you may continue earning while facing an uncertain role or future reorganization. Neither outcome is guaranteed. Write down what is confirmed, what is an estimate and what is unknown.

If you arrived through the Microsoft voluntary-exit news guide, use your own offer rather than copying another employer’s terms. This worksheet is U.S.-focused; local law, tax treatment and benefit systems differ outside the U.S.

Estimate a simplified cash runway

Enter amounts in U.S. dollars, after allowing for taxes where applicable. The starting figures are an illustration, not a typical package or a suggested spending target. Calculator entries stay in this page: the tool does not send or save the numbers.

Severance runway calculator

Available cash ($)Cash you can use, excluding money you have set aside for other obligations. Usable severance estimate ($)After your estimated tax reserve and deductions. The tool does not calculate tax. One-time transition costs ($)For example, moving, equipment or benefit-transition costs not included below. Monthly essential spending ($)Housing, food, debt payments and other essentials. Avoid double-counting health costs. Extra monthly health-coverage cost ($)Only the additional amount not already in essential spending. Confirmed monthly net income after exit ($)Use zero for speculative work or benefits whose eligibility and amount are unconfirmed. Months until replacement incomeYour scenario, not a forecast. Try a longer gap as a stress test.

Starting buffer = available cash + usable severance − one-time costs.
Monthly draw = essential spending + extra coverage cost − confirmed net income.
Runway = starting buffer ÷ monthly draw, when both are positive.
Balance after the income gap = starting buffer − (monthly draw × months).

Worked example: $12,000 cash + $18,000 usable severance − $3,000 transition costs leaves $27,000. Spending $4,000 plus $500 for extra coverage, with no other income, draws $4,500 a month. That is 6 months of simplified runway; a 9-month gap would leave a $13,500 shortfall under the same assumptions.

The model pools the entered funds as if they were available at the start, keeps costs and income constant, and ignores investment returns, inflation, taxes not already reserved and unexpected expenses. Installments, delayed payments or changing benefits can make the real cash-flow timeline very different. Check the dates separately.

Seven checks before you compare the totals

Separate extra severance from money already owed. List salary through your final date, earned compensation, leave payments and extra separation consideration separately. Confirm the amount and conditions for each; do not count the same payment twice.
Budget from usable cash, not gross pay. The IRS states that severance and unemployment compensation are taxable for federal income-tax purposes. Withholding is not necessarily your final tax bill. Ask payroll for the payment schedule and deductions, then verify the reserve that fits your situation.
Price replacement health coverage. Ask when your employer coverage ends and whether a subsidy is temporary. HealthCare.gov explains Marketplace enrollment after losing job-based coverage and potential COBRA continuation. Compare premiums, deductibles, provider networks and start dates. Do not assume coverage or a subsidy continues for the whole runway.
Check equity and bonus treatment. Record vesting, exercise windows, performance conditions and any forfeiture or repayment terms. Use plan documents and written administrator answers. An unvested award or an uncertain future sale is not cash available for next month’s rent.
Read the agreement, not just the offer email. Identify releases, confidentiality, non-disparagement, rehire rules, repayment obligations and restrictions affecting a new job. The EEOC’s severance-waiver guidance explains that requirements can differ by claim and circumstances. Get qualified advice on the actual document, including review and revocation periods that may apply to you.
Verify benefits and immigration implications separately. Do not assume voluntary separation qualifies for unemployment benefits; check your state workforce agency’s rules and your facts. If work authorization depends on the job, get qualified immigration advice on your specific status and timeline before making an exit decision.
Test the replacement-income assumption. Use a reasonable base case and a slower-search case. A job ad, recruiter conversation or strong interview is not a signed offer. Check the employer, role, location and pay before treating a possible opening as a credible alternative.

Build a stay-versus-exit comparison

Use two columns for a chosen period, such as the next six months. Under stay, list expected net salary, employee benefit costs, scheduled vesting and realistic job uncertainty. Under exit, list net separation payments, payment dates, replacement-benefit costs, lost or retained awards and income-gap scenarios.

Keep cash, non-cash benefits and uncertain outcomes on separate lines. If staying might lead to a different package later, mark that package unknown rather than assuming it will be better or worse. Do not add a hypothetical offer’s salary to a severance scenario unless you clearly identify it as an assumption.

Questions to send HR

Could you confirm my final employment date, each payment amount and payment date, health-coverage end date, any subsidy period, treatment of bonus and equity, the acceptance deadline, and any review or revocation periods? Please also identify any rehire or repayment conditions and the contact for questions after my access ends.

What the calculator cannot decide

Two people with the same runway can reasonably make different choices because their health, family commitments, career options and risk tolerance differ. The purpose of the worksheet is to expose assumptions and missing facts, not turn one number into a recommendation.

If your budget only works with an immediate new job, a favorable tax assumption or an unconfirmed benefit, resolve those dependencies before treating it as a reliable plan. For a forced separation, start with the first-24-hours checklist.

Check the opportunities behind your plan

When evaluating replacement jobs, Lumen helps review public listing signals and evidence gaps. It cannot verify a future offer or predict how long your search will take.

Check a listing with Lumen

General educational information, not individualized legal, tax, investment or benefits advice. Verify your agreement, jurisdiction and plan documents with the appropriate administrator or qualified adviser.