If you’re a federal employee and your agency is offering a VERA, handing out VSIPs or talking about a RIF, you’re probably doing a lot of thinking right now—about your career, your finances, and your retirement options. Regardless which of these options you’re considering, it’s important to understand what’s available and how it might work for you.

Let’s break down the three big programs you might hear about during a restructuring: Voluntary Early Retirement Authority (VERA), Discontinued Service Retirement (DSR), and Voluntary Separation Incentive Payments (VSIP).

VERA: Voluntary Early Retirement Authority

Lots of cuts being made in various federal agencies right now and most of them that are attempting to reduce their workforce are offering VERA. This gives eligible employees the chance to retire earlier than they normally could—without the usual age penalties.

Do I Qualify?

You may be eligible for VERA if:

• You’re at least 50 years old with 20 years of service, or any age with 25 years.
• You’ve been on the agency’s rolls for at least 30 days before the VERA offer.
• You’re in a position covered under your agency’s approved VERA plan.

This isn’t a blanket offer for everyone – your position has to be included, and the agency has to get OPM approval first.

Federal Benefits with VERA

• You can leave federal service earlier than you might’ve planned—and still get your full retirement benefits with no reduction in your FERS annuity (reminder that you don’t receive COLAs until age 62).
• You still qualify for the FERS supplement at Minimum Retirement Age (MRA).
• You keep your FEHB and FEGLI coverage if you meet the eligibility rules.

In short: If you’re already considering retirement or just ready for a change, and you meet the requirements, VERA is your ticket to early retirement.

VSIP: Voluntary Separation Incentive Payment (“Buyout”)

This is the icing on the cake—if it’s offered. VSIP is a cash incentive (up to $25,000 before taxes) to get you to voluntarily leave your job. It’s often offered alongside VERA or before a RIF to encourage people to go early and make room for others to shift around.

You can take VSIP and VERA together—a common combo during big reorganizations. But keep in mind:

• You must leave voluntarily.
• You can’t return to federal service within 5 years without repaying the buyout.
• You must have at least 3 years of federal service.

Discontinued Service Retirement (DSR)

What if your agency is offered a VERA which you don’t want to take but you’re scared you will get RIF’d (Reduction in Force) and lose your benefits because you’re under MRA? Do you lose your benefits if that happens? You would likely be eligible for a DSR in this scenario.

A DSR is technically an involuntary retirement, but it allows you to leave with your benefits, and no age penalty.

Who Qualifies for a DSR?

You must:

• Be at least 50 with 20 years or have 25 years at any age—just like VERA.
• Be separated involuntarily (e.g., through a RIF, transfer of function, or position abolishment).
• Not be removed for misconduct or performance issues.
• Not refuse a reasonable offer to another position.

Benefits of a DSR

• Immediate retirement annuity—same formula as VERA.
• You qualify for the same benefits as a VERA

So, if your job is going away, DSR lets you retire early without being penalized for something that’s out of your control.

Final Thoughts

Whether you’re looking to take the early retirement route or bracing for an involuntary separation, understanding these programs gives you power. The decision is personal—based on your finances, retirement goals, and whether you’re ready to leave or still hoping for another position in the agency.

If your agency is offering VERA or VSIP, or if RIF notices are going out, talk to your HR office. Request a retirement estimate. Ask about your service history, annuity projections, and what benefits you keep. Don’t guess—get the facts.

Yes, we are in a time of uncertainty for federal employees but it can also be a time of opportunity for many – the opportunity to retire early or retire from federal service and seek new employment. If you need help with these decisions and would like a partner to help you through retirement you are welcome to schedule an introductory call with me.