Federal Employees: What Does the Federal Buyout Mean for Your Retirement?
Are you a federal employee wondering if the buyout is right for you, or have you recently taken the offer?
With so much uncertainty surrounding this program and its implications, it’s completely normal to feel unsure. Let’s take a moment to step back and review what’s at play so you can make informed decisions with confidence.
A Quick Look at the Federal Buyout Program
Originally introduced during the Trump administration, this buyout program offers federal employees financial incentives to leave their positions.
On Monday, February 10, a U.S. District Judge extended the resignation deadline, further extending the program’s timeline.1
So what types of jobs does this affect? Federal employees play a vital role across many industries—from education and law enforcement to healthcare and engineering, the biggest being the Department of Veteran Affairs.
Additionally, the federal workforce has its largest footprint in key regions across the country.2 Check out where federal workers are most concentrated.
While the buyout program may seem straightforward, its logistics and potential impact on your future require closer examination.
Logistics of the Buyout Program
- Salary During the Deferred Resignation Period
If you’ve accepted the buyout, you will continue receiving your salary through September 30, 2025, without needing to work according to the U.S. Office of Personnel Management.3 - How This Affects Your Retirement
The Office of Personnel Management (OPM) outlines this key information about retirement benefits under the buyout program:4- Retirement benefits continue to accrue during the deferred resignation period.
- If you choose to retire (early or normal) before your final resignation date, your retirement election will override the deferred resignation.
- If you simply choose “resign” instead of “resign and retire,” your separation will process as of September 30, 2025, or your approved separation date. For retirement, a separate application must be submitted prior to your chosen retirement date.
Though the process may seem complex, it’s vital to understand what each choice means for your future.
Facing the Uncertainty
The truth is, things feel unstable right now. A recent survey by the 2024 NFCC Financial Literacy and Preparedness Survey revealed that six in ten (62%) people fear government instability will harm their finances in the next 12 months.5
You’re not alone in feeling uneasy. When making such significant decisions, having clarity is more critical than ever.
Here’s what we know for certain—the decisions you make today will shape your retirement tomorrow. A solid financial plan can help preserve the stability and benefits you’ve worked so hard to build. Whether you’re thinking about retiring soon or just navigating this transitional period, understanding the long-term implications of your choices is key.
If your retirement outlook has changed, or you’re nervous it might, feel free to reach out to us via email or phone at 517-435-4040 — we’re here to help.
You’ve dedicated so much to your career. Now, it’s time to preserve what you’ve built.
Sources:
2. https://www.pewresearch.org/short-reads/2025/01/07/what-the-data-says-about-federal-workers/
4. https://www.opm.gov/fork/faq/
5. https://www.nfcc.org/harrispoll/
Content prepared by Advisors Excel.
This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investments can guarantee a profit or protect against loss in periods of declining values.
The information in this material is believe to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.
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