Federal Drive

How can you tell if a federal buyout is a good deal?

It seems like every week another agency is offering employee buyouts and early retirements. But they're not designed to make you rich. So how do you decide w...

Federal News Network Staff

April 6, 2012 5:13 pm

< a min read

wfedstaff | April 17, 2015 3:37 pm

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It seems like every week another agency is offering employee buyouts and early retirements. But they’re not designed to make you rich. So how do you decide if one is right for you? The Federal Drive with Tom Temin and Emily Kopp spoke with registered employee-benefits consultant Ed Zurndorfer to get some answers.

Only federal employees with at least 25 years of service (regardless of age), or those who are at least 50 years old with 20-25 years of service are eligible for early retirement. Those who qualify receive the same retirement benefits they would have if retiring normally.

Some agencies also offer buyouts, which are annuities of up to $25,000. That may sounds like a lot, but keep in mind the annuity is fully taxable.

“Most employees who get this offer, when they see the dollars and cents, what they’re going to be getting, they say, ‘I really cannot afford to retire,'” Zurndorfer said.

Listen to the full interview above for more tips on early retirement and buyouts.

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