Just an FYI:
Tax Deferrals
Severance package recipients can take steps to defer income tax on some of the money they receive. This is especially useful for workers who lose their jobs close to retirement. Placing money in an annuity or individual retirement account creates the opportunity for a tax deduction. Although the severance income is taxable, it also counts as a deduction from taxable income if it goes into a qualified, tax-deferred retirement plan.
Maxing out such contributions will minimize the tax impact of a severance package and allow the recipient to pay taxes at a lower rate as the money is withdrawn
Source: http://smallbusiness.chron.com/tax-options-severance-packages-23917.html