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Family Leave Fridays!!!
Of course the buyout is critical to your future, because if you accept it, you'll relinquish your pension.
There's greater than 50% chance you'll outlive the life expectancy projected by the payments covered by the buyouts, and the buyout will use a discount rate that's simply not obtainable in the market (in the past two years, most companies have reported using a 7%-8% rate -- expect UPS' offer to be similar). Additionally, if you don't put the money into a qualifying retirement account (e.g. IRA), you'll owe a 10% penalty -- in addition to applicable federal, state and local taxes -- when you file next spring. Do a tax projection -- if you're in the 25% tax bracket, and live in a state (and/or city) that taxes income, it can be greater than a 40% hit. If 20% is withheld, you'll owe an additional 20% (again, your withholding is a deposit toward your tax liability). Unless you're disabled (it doesn't matter if your child is, even if you're claiming him as a dependent), you'll owe the penalty.
Large sums of cash are tempting. If you're in poor health and don't expect to live long, that's one thing. If receiving it is life-changing, that's another (but again, be aware of the tax implication). But if it's just that the money is tempting and you're trying to justify the buyout... remember that once it's gone, it's gone. UPS certainly isn't making this offer for your benefit.
