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Should You Accept an Amway Severance Offer?

May 13th, 2021 | 2 min. read

By Jacob Schroeder

Amway severance

For many Amway employees, the opportunity to retire comes earlier than planned. To restructure its workforce, Amway will at times present retirement-eligible employees with a voluntary separation offer. This provides a financial incentive to voluntarily leave the company, should you accept it.

Recently, Amway announced such an offer to more than 1,000 employees. Those who received an offer only have a short window of time, around one month, to decide.

It is not a simple decision, as you must take into consideration factors beyond just the offer’s details. These questions will help you determine whether you should accept the Amway offer.


Your readiness to retire depends on if your retirement assets (401(k), IRA and other investment accounts, Social Security, real estate, etc.) are enough to meet your retirement expenses and goals.

Generally, enough assets to replace 70-80% of your pre-retirement income will allow you to maintain the same standard of living you enjoy today. We, however, typically recommend replacing 100% of your pre-retirement income. Although some of your living costs will fall in retirement (gas, shopping, etc.), others will rise (health care).

For an accurate picture of your retirement readiness, we suggest working with a financial adviser to create a financial plan – a comprehensive picture of your current finances, your financial goals and any recommended strategies to achieve those goals. We can create a complimentary Amway financial plan for you within 1 day.


If you received a voluntary separation offer, you may be able to choose from different payout options. You should consider carefully the tax and cash flow implications of each one. Talk with a financial adviser who understands Amway’s benefits and can evaluate your situation to make sure you are selecting the right option.

Should you consider leaving Amway with severance, it is also important to understand incentive pay is considered earned income like salaried wages. This income is subject to payroll taxes and regular income taxes in the year received. Amway will issue a W2 for the tax year in which this benefit gets paid out. If possible, given your specific situation, you might try to get these benefits into the next tax year.

For those looking to collect Social Security in the year after leaving, don’t worry. Social Security will count these assets as earned in the year of actual retirement, not when paid out.


Upon leaving Amway, you may leave some or all your savings in your Amway 401(k) account. But it is common to rollover your 401(k) to an IRA. A 401(k) rollover can provide many advantages, including greater investment choices, greater withdrawal flexibility, more withholding options, and professional management by a financial adviser. When done properly, no taxes apply to the rollover.

Again, the Amway severance offer gives you only a short amount of time to make a decision. Considering all the different parts involved in making the right choice, we encourage you to speak with an Amway-experienced financial adviser to leave no doubt as to what works best for you.