Why would you take that vs the lump sum? If you take a lump sum you can file for unemployment in your state right away. if you take installment i think it depends on state? (you sometimes cannot until it's over.)
Why take the installments?
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"It all comes out the same tax wise." I believe this statement fails to consider people that have years of service such that their severance package, if taken in installments, would extend into the 2017 calendar year. For those people, taking the lump sum means you are realizing the income this year instead of next year and that may very well place those additional funds into a higher tax bracket.
The earlier post indicating the taxes come out the same isn't necessarily correct. If your installments were to cross into 2017, the tax bracket could be different from taking the lump sum in 2016. But a different earlier post was correct in explaining taking the lump sum in 2016 could allow you to hit the annual FICA income limit in 2016 and avoid some taxes there. In short, you have to forecast the numbers for your situation and see which is likely to be in your favor. But next year's salary may be an unknown, adding some guesswork to the decision....
I've helped my friend with her boa severance package. It's for medical basically. If u have other medical coverage from spouse/partner, get the lump sum. It all comes out the same tax wise.
steep tax penalties if you let your health insurance lapse for more than 3 months
Make sure you read any package carefully. At year end, if you chose the installment option, benefits continued, as did your deductions for them, which is great BUT you couldn't cancel the election even if you got another job before the severance ended (with another company). Cheaper than cobra but if you have many years of service that could be less than ideal. See if they changed anything.
I took the installments by doing this you keep your benefits but to each is own..
Lump sum may prevent social security taxes if it pushes you income to the annual limit.
The lump sum is taxed at a higher rate.
Lump sum may put you in a higher tax bracket.
Some states will factor lump sum severance into unemployment and spread it out as if it were bi-weekly payments
To extend your insurance benefits. If you find other employment prior to your severance running out, it can supplement your income.
To keep your insurance benefits longer