Mike, I can totally relate to what you are going through. Everything you are feeling is completely normal. I went through a very similar thing about 10 years ago. I had worked for the same company for 20 years and like you, thought I would probably retire from there.
They decided they would outsource my department. They did give us almost a year notice however. The kicker was though that you had to stay until the very end of that year in order to keep your severance package. We also had the option to re apply for the job we already had but with the contract company who was replacing us.
In my case, I opted out and stayed the year needed to get my severance. After that I collected my unemployment and spent some much needed time with my son in his last years of high school before going off to OSU for college. In my case the insurance was not a deciding factor because my husband carried us on his insurance. That is something you will need to consider. The hardest part is having to start over. Like you, I had nearly 6 weeks of vacation plus personal time and 11 holiday's. Starting over with 2 weeks sucks!!
I have now been at my current place of employment for almost 10 years and we were recently told that we may get outsourced. (Life in the I.T world) we are supposed to hear before Christmas. I'm not sure what I will do this time around. Please let me know if I can do anything at all to help. Keep us updated