Microsoft’s Voluntary Exit Offer: Benefits and Deadlines After You Accept

Takeaways

• Before leaving Microsoft, get written answers from HR on when your health coverage ends and when each payment lands. Those two dates drive most of the deadlines that follow.
• You have 60 days to elect COBRA, and coverage is retroactive once you pay. Washington Healthplanfinder lets you enroll from 60 days before and after your employer coverage ends.
• If you move your 401(k) away from Microsoft, a direct rollover to an IRA avoids the 20% mandatory federal withholding and 60-day re-deposit deadline that occur if a check is directly sent to you.
• If you leave in or after the year you turn 55, keeping money in the Microsoft 401(k) can preserve penalty-free withdrawals that an IRA rollover would give up.
• Each deadline affects the next one. A Personal CFO view ties them to your 2027 income and spending, so the logistics support the larger plan.

If you’re weighing Microsoft’s Voluntary Exit Offer, or you’ve already decided to take it, the weeks ahead come with a stack of deadlines. Some of the costliest mistakes after leaving a job come from missing one, like a health enrollment window that closes quietly or a 401(k) check that starts a 60-day clock.

This checklist for leaving Microsoft covers the practical side. It starts with the questions to ask HR before you sign and then moves to health coverage and your 401(k). The last sections help you size your cash runway and lay out a timeline through your first 90 days.

Still deciding whether to accept? Start with our companion post, Microsoft’s Voluntary Exit Offer: What to Weigh Before You Decide. From a Personal CFO perspective, the two belong together, because the logistics only work when they fit the larger plan.

Leaving Microsoft: Questions to ask HR before you sign

Microsoft says each eligible employee received an email linking to their individual offer details. Read that first. Then take the questions below to HR and the benefits team, and get the answers in writing where you can.

The payment

• How is your payment calculated from your tenure and level, and will it be paid as a lump sum or over time?
• Which payments land in 2026 and which in 2027? The split shapes your tax bill, as our companion post on the offer
• Will unused vacation be paid out, and is any 2026 bonus prorated?

Stock and benefits

• How long does stock keep vesting after your last day, and which Microsoft stock awards fall outside that window?
• What happens to contributions already withheld for the employee stock purchase plan (ESPP), and to any deferred compensation?
• On what exact date does your medical coverage end, and how long does any subsidized coverage in the package last?
• Which other benefits end with your job, such as life and disability insurance, and can either policy continue?
• What happens to any HSA or FSA balance, and to Microsoft’s charitable gift matching?

The agreement

• What legal claims are you releasing, and does the agreement limit where you can work next?
• Would you be eligible for rehire later?
• How long do you have to decide, and can you revoke after signing?

Your other options

• If you decline, is an internal move or a different role possible?
• What career planning support comes with the package, and how long does it last?

Keep the answers in one place. You’ll use them in every section that follows.

Health Coverage After Leaving Microsoft: Deadlines to Know

Confirm the exact date your Microsoft medical coverage ends. Every window below counts from it, and missing one can leave you uninsured until the next open enrollment.

The offer includes healthcare coverage for a fixed period. Find out how long it lasts and what you’ll pay once it ends, because the options below are what take over after that.

COBRA

COBRA lets you keep your current Microsoft medical plan for up to 18 months. The cost can surprise people, because you pay the full premium plus up to a 2% administrative fee with no employer share. You have 60 days to elect, counted from the later of the date coverage ends or the date you receive the election notice. The first payment is due within 45 days of electing, and coverage is retroactive once you pay. That gives you room to compare options, but a missed deadline means losing COBRA entirely.

If you have a health savings account, it stays yours after you leave, and you can use it to pay COBRA premiums tax-free.

Washington Healthplanfinder

Losing job-based coverage opens a special enrollment period on Washington Healthplanfinder, the state’s marketplace. You can enroll within 60 days before and after your employer coverage ends, and signing up in the month it ends helps you avoid a gap. Premium help depends on household income and size. Federal credits generally stop above 400% of the federal poverty level, and Washington’s Cascade Care Savings may add help at lower incomes, so a lower-income 2027 can make a marketplace plan cheaper than COBRA. Enhanced federal subsidies expired after 2025, so apply to see your actual numbers before you assume either way.

One caution: choosing COBRA and later dropping it on your own generally doesn’t open a new enrollment window. Open enrollment for 2027 coverage runs from November 1, 2026, through January 15, 2027, which overlaps with a year-end departure.

A spouse’s plan

Losing your coverage usually lets you join a spouse’s employer plan outside its open enrollment. Federal rules give at least 30 days to request it, so ask their HR team for the deadline as soon as your last day is set.

Medicare, if you’re 65 or close

Your initial enrollment period runs seven months, starting three months before the month you turn 65. If you’re already 65 and covered through active employment, you get eight months after that employment or coverage ends, whichever comes first, to sign up for Part B without a penalty. COBRA doesn’t count as active employment and doesn’t extend those eight months. Our guide to Medicare or employer insurance covers the trade-offs.

Medicare premiums for higher earners are also based on income from two years earlier, so a large 2026 severance can raise your 2028 premiums. If your work stopped, you can ask Social Security to use your lower current income instead.

Compare before you elect

Put the options side by side before you choose, starting with any subsidized coverage in your offer. Compare the total yearly cost, including deductibles and out-of-pocket limits. Then check that your doctors are in network and your prescriptions are covered. Our guide to individual health insurance covers what to look for.

What to do with your 401(k) when leaving Microsoft

Your 401(k) is one decision you don’t have to make on your last day. A rollover can happen later, after the deadline pressure passes. You have four main options:

• Leave it in the Microsoft plan. Plans can move small balances (under $7,000) out automatically, but larger balances can usually stay. Confirm Microsoft’s rules.
• Roll it into an IRA. This can widen your investment choices, so compare fees and fund options first.
• Roll it into a new employer’s plan, if that plan accepts rollovers.
• Cash it out. For most people this is the most expensive choice. The money is taxed as income, and before age 59½ it may also carry a 10% penalty.

Why a direct 401(k) rollover matters

In a direct rollover, the money moves straight from plan to plan and nothing is withheld. If the plan pays you instead, it must withhold 20% for federal taxes. You then have 60 days to deposit the full amount in an IRA, using other savings to replace the 20% that was withheld, or the shortfall is taxed. The IRS rollover rules and our guide to retirement account rollovers have more detail.

Check these before you move anything

• The age-55 rule. If you leave in or after the calendar year you turn 55, withdrawals from the Microsoft 401(k) generally avoid the 10% early withdrawal penalty. Money rolled into an IRA loses that exception, which matters if you’re planning to retire early.
• Microsoft shares in the plan. If your 401(k) holds Microsoft stock, a rule called net unrealized appreciation may let the growth on those shares be taxed at capital gain rates when you sell. It requires a specific kind of distribution, and the option is lost once the shares roll into an IRA.
• An outstanding 401(k) loan. Leaving usually makes the balance due. An unpaid balance is treated as a distribution, though you have until your tax filing deadline, including extensions, to roll that amount over.
• Roth and after-tax money. If you made Roth or after-tax contributions, ask how each will be handled so it lands in the right account.

Size your cash runway before your last paycheck

Your runway is how long you can cover your life without a paycheck after leaving Microsoft. Working it out turns a vague worry into a number you can plan around. Base it on what actually left your accounts over the last 12 to 24 months, including taxes and any support for family members, so the number reflects what your life costs. The planning guide includes a printable version of this worksheet.

Then test the result against a few realistic scenarios:

• Quick next job: about 3 months
• Thoughtful search: 6 to 12 months
• Longer break or career change: 12 to 24 months
• Lower-paying but more fulfilling role, or starting a business
• Not returning to work at all

Notice which ones feel comfortable and which feel tight. The point is to learn where your margin runs out before you commit. Two reminders: the severance figure in your offer is before tax, and health premiums belong in step one if you’ll be paying them yourself.

Where the money comes from

Next, decide which money you’d use first after leaving Microsoft. For many households, cash, taxable investments, a spouse’s income and Microsoft stock come first. Deferred compensation and retirement accounts usually follow, with Social Security later still. If you’re close to retirement, this step becomes the start of a withdrawal plan that sets which accounts to draw from and for how long.

Your timeline from now through the first 90 days

The steps of leaving Microsoft run on a short clock, so it helps to pace them across the next few weeks.

This week

• Read your offer details in full and write down your questions.
• Gather your latest pay statement along with your equity and benefit summaries.
• Put your decision deadline and last day on the calendar.

Early to mid-November

• Take the questions above to HR and the benefits team.
• Work through your runway with the people your decision affects.
• Get a read on your 2026 and 2027 tax picture.

Late November

• Price COBRA against a Healthplanfinder plan.
• Finish any professional review before the deadline, including legal review of the agreement.
• List what you still need to learn before deciding.

Before your decision date (reported for early December)

• Confirm in writing how and when you must respond, then make the call deliberately.

After leaving Microsoft: the first 90 days

• Confirm your new health coverage is active, and track the COBRA election and payment dates if you’re using it.
• Complete a direct rollover if that’s your plan, or leave the 401(k) in place until you decide.
• Set aside money for taxes. A fourth-quarter estimated payment for 2026 is due January 15, 2027.
• Put a simple spending plan in place based on your runway.
• Give yourself permission to rest before making big commitments.

Why the logistics belong in your larger plan

Each step in leaving Microsoft has its own deadline, and the answers depend on each other. Your health coverage cost depends on your 2027 income, which depends on when severance and stock land. Your 401(k) choice depends on when you’ll need the money.

A Personal CFO approach looks at those connections together, so each deadline gets handled with the whole plan in view. If you’re still deciding, the most useful outcome of that conversation can be confidence that staying is the right call. If you have an offer, three analyses can bring the decision into focus. Our companion post explains each one, from a 12- to 24-month cash-flow plan to a multi-year tax projection. Our Seattle-area advisors have also written about Microsoft’s corporate benefits, which is useful background.

Frequently asked questions

How long do I have to elect COBRA after leaving Microsoft?

You have 60 days, counted from the later of the date your coverage ends or the date you receive the COBRA election notice. Once you elect, the first premium payment is due within 45 days. Coverage is retroactive to the day your Microsoft plan ended, as long as you elect and pay on time.

Can I switch from COBRA to a Washington Healthplanfinder plan later?

Usually not. Dropping COBRA on your own generally doesn’t open a special enrollment period, so you’d wait for open enrollment, which starts November 1 each year. Running out of COBRA, or losing an employer’s share of the premium, does open one. Compare both options before you elect COBRA.

What is a direct rollover?

A direct rollover moves retirement money straight from your 401(k) to an IRA or another employer’s plan without the funds being paid to you. Because the money never passes through your hands, no federal tax is withheld and there’s no 60-day deadline to meet. That simplicity is why many people use it to move a 401(k).

Should I roll over my 401(k) after leaving Microsoft?

There’s no rush to decide. Leaving the money in the Microsoft plan keeps the age-55 rule available if you leave in or after the year you turn 55, and it preserves options for any Microsoft shares in the plan. An IRA can offer broader investment choices. Compare fees and access to the money before you decide.

Does COBRA extend my deadline to sign up for Medicare?

No. If you’re 65 or older and lose coverage based on active employment, you have eight months to enroll in Part B without a penalty. COBRA doesn’t count as coverage from active employment and doesn’t pause that clock, so plan your Medicare enrollment around the date your employer coverage ends.

About the Author: Scott Moser, CFP®, is a Lead Advisor at Brighton Jones. He helps high-income professionals and families design tax-efficient investment strategies and retirement plans aligned with their values and long-term goals.

Disclosure: Brighton Jones is not affiliated with or endorsed by Microsoft. Offer details reflect information available as of October 28, 2026, and may differ from your individual offer documents. Rules and figures were checked against the sources listed on this page as of that date. Due to various factors, including changing market conditions and/or applicable laws, this content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Brighton Jones, LLC. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Brighton Jones, LLC), or any non-investment related content, made reference to directly or indirectly on this website will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Brighton Jones, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. To the extent that you have any questions regarding the applicability of any specific issue discussed above to your individual situation, you are encouraged to consult with the professional advisor of your choosing.