Wring a Buyout for All It's Worth

The financial industry is in a tough spot. Mergers, acquisitions and divestitures are heating up, involving companies such as Bank of America (STOCK QUOTE: BAC), Merrill Lynch (STOCK QUOTE: MER) and American International Group (STOCK QUOTE: AIG). Even more can be expected, according to TheStreet's Jim Cramer. That may lead to a sharp increase in employee buyouts on Wall Street as companies trim their workforces.

Buyouts are a mixed blessing. For some, a buyout can be an opportunity to change careers, retire early or jump ship before getting laid off. For others, it can represent a major financial setback. If your company is offering you a buyout, here are a few things to consider before making your decision:

Were you about to leave?

The same buyout package might be a windfall to one employee but a major setback to another. If you are just a few years away from retirement and have little outstanding debt, accepting the offer may be a chance to walk away early. On the other hand, if you have a mortgage and a pile of other debt and weren't planning to retire for another five years or more, the buyout may not be enough to keep you afloat.

Even if you weren't planning on resigning, a buyout may provide a better severance package than a layoff would. If you don't think you'd survive a round of layoffs, taking the buyout may be in your best interest. (To avoid a layoff, possess a unique set of skills that would protect you. If you've been repeatedly passed over for promotions or raises, start thinking about your future.) In fact, a buyout may be the right move even if you think you are safe from layoffs. If other companies in your industry are in better shape than your firm, this may be a lucrative opportunity to take your marketable skills to your next job. Make sure your offer doesn't include a non-compete clause, which would make it difficult, if not impossible, to work for rivals in the same industry.