## The DOGE Restructuring Context
The largest federal workforce restructuring since WWII is underway. Approximately 300,000 federal positions have been eliminated or offered buyouts — 9% of the entire federal workforce. Agencies hit include SSA, DOD, Commerce, Interior, USAID, GSA, and 18F.
If you've received a VERA (Voluntary Early Retirement Authority) or VSIP (Voluntary Separation Incentive Payment) offer, you face one of the most financially consequential decisions of your career. Here's how to evaluate it.
The Five Financial Components
1. FERS Pension Calculation
Your FERS pension is calculated as: High-3 average salary times years of creditable service times 1% (or 1.1% if retiring at age 62+ with 20+ years). Under VERA, you can retire earlier than the standard age requirements — but the formula still applies. Every additional year of service increases your pension permanently.
2. VSIP Payout
The current VSIP cap is $25,000 (set in the 1990s). After federal and state taxes, most employees net $17,000-$19,000. Important: if you return to federal service within 5 years of accepting VSIP, you must repay the full amount.
3. FEHB Health Insurance (The 5-Year Rule)
To carry Federal Employees Health Benefits into retirement, you must have been continuously enrolled in FEHB for the 5 years immediately before retirement. If you're at 4 years and 6 months, taking VERA now means losing employer health coverage in retirement — potentially the most expensive mistake in this decision.
4. TSP Rollover
Your Thrift Savings Plan balance follows you. You can leave it in the TSP, roll it to an IRA, or take a distribution. Under age 59.5, early withdrawal triggers a 10% penalty plus income tax. The TSP's ultra-low expense ratios (0.04%) make it worth keeping if you don't need the funds immediately.
5. Social Security Interaction
If you retire under VERA before age 62, there's a gap between your early retirement and Social Security eligibility. Your FERS pension must cover living expenses during this period. The FERS Special Retirement Supplement may partially fill this gap for employees with 20+ years of service.
The H.R. 7256 Wildcard
The Federal Workforce Early Separation Incentives Act (H.R. 7256) passed the House Oversight Committee 43-0 in February 2026. If enacted, it would raise the VSIP cap from $25,000 to 6 months of base salary — potentially $60,000+ for senior employees. The bill hasn't reached the House floor yet and has no Senate companion bill. The critical question: should you accept $25,000 now, or wait for a potential $60,000?
Break-Even Framework
Calculate your break-even point: how many months of private-sector salary would it take to make up for the lost pension growth? If VERA gives you a $2,500/month pension now, but staying 2 more years would give you $2,800/month, the $300/month difference compounds for 20-30 years of retirement. Run the numbers before deciding.
What Financial Advisors Charge
Federal employee financial advisors charge $300-$500/hour for VERA/VSIP analysis. A typical engagement is 3-5 hours ($900-$2,500) for a comprehensive recommendation. This is money well spent for complex cases — but a self-service calculator can handle the 80% of cases where the math is straightforward.