Incentives to Retire Early: Are They Worth Taking?
(For a brief overview on the VERA and VSIP programs, click here.)
If you apply for VERA/VSIP there is usually a very limited time period between learning that the agency has approved your application and deciding if you will accept the offer. You should have your decision made prior to an offer, so you can be sure to consider all factors.
The decision to retire should encompass more than financial considerations, but for the moment, let us look at the numbers.
If we assume you have a planned retirement date but take the VERA/VSIP offer, how many years will it take for the lump sum payout to benefit you?
Below are two scenarios laying out this piece of the decision.
While there may be a large tax withholding on this incentive, it will "wash through" your tax return; any overpayment will be returned to you.
About the Author
Brandon S. Christy, CPA, PFS, is president of Christy Capital Management (CCM) and founder of the Retirement Benefits Institute (RBI). RBI has provided benefits and retirement training sessions to thousands of federal employees. For a schedule of upcoming no-cost training, click here. CCM offers retirement analyses for federal employees. For a no-cost consultation or other planning needs, call 866-331-7749 or click here.
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