In theory, a buyout package is a great way to jump-start an early retirement, after all, someone is paying you to stop working. But not all offers are created equal. Here's how to make the most of one.

Now or later: Most buyouts are structured either as a one-time, lump-sum payment or as an annuity that spreads out payments over the rest of your life. If given the choice, think about your savings; if you've fallen short of your goals, you may want the annuity, says Bob Walter, a principal at Buck Consultants in Secaucus, N.J. If your portfolio is in good shape, you'll benefit more from the single payment. One other consideration: If you aren't in good health, go for the lump sum. If you roll the money directly into an IRA, you'll minimize any tax consequences.

Paying the doctor: Some buyouts include insurance, but those are increasingly rare. If your spouse is still working, your cheapest bet is to piggyback onto his or her coverage until you qualify for Medicare. Of course, your spouse might want to retire early too. In that case, Cobra entitles you to your former company's coverage for up to 18 months, longer, if you're disabled, with you paying up to 102 percent of the group premium price. Once that expires, you may need to buy your own insurance: Look for a plan with a high deductible, which will mean lower premiums.

Making the first move: Because companies are placing a higher value on their more experienced staff, it's not as easy as it was a decade ago for an employee to request a buyout, says Bill Arnone, a benefits expert at Ernst & Young. Buyouts are most commonly offered these days to a whole class of employees, think members of a specific team or division of a company. So keep up with the office rumor mill. It might be worth transferring to a division that's on the chopping block.

The part-time boost: Many buyout "retirees" haven't completely left the workforce. A part-time income can supplement a buyout package, letting the retiree sustain a lifestyle while preserving a flexible schedule.

Source: NYTS