Q: I’m planning on retiring at the end of May. However, last week my agency announced that it was undertaking a re-organization that is likely to affect the area in which I work. Very often agencies will offer buy-outs during an organization; should I wait for a buy-out or retire as I have planned on May 31?
A: A buy-out is officially called a Voluntary Separation Incentive Payment (VSIP) and may or may not be offered during a re-organization. The amount of a VSIP is the lesser of $25,000 or the amount of severance pay to which an employee would be entitled based on their length of service. Normally the $25,000 is the smaller amount. An employee who accepts a buy-out will have to re-pay it if they return to the government either as an employee or on a personal services contract within five years of receiving the buy-out. Since you are planning on retiring, the chances of you deciding to return to the government are slim to none.
But your agency only announced the re-organization last week. Given the speed at which government agencies implement things, they might not get around to deciding to offer buy-outs (if they do, in fact, offer them) for quite some time. Think about your plans for your retirement life; if you’re planning on spending the summer in the bleachers at Wrigley, waiting for a buy-out will derail that plan.
On the other hand, if you haven’t yet decided on what you want to do with all the time you will find on your hands once you no longer have to work, it might not hurt to hang around long enough to see if a buy-out is offered. Spend some of the time waiting for the buy-out giving some thought to your retirement life. The book What Color is Your Parachute for Retirement? by Nelson and Bolles can help you focus on what you’ll do in retirement.
You might also want to consider how much you like your job. If you enjoy what you do, waiting around to see if there’s a VSIP in your future might not be so painful. If you hate what you do, the wait for a VSIP could be excruciating.
The choice is yours. Consider that you are comparing time and money. Every extra day you spend working is a day where you will not be teeing up on the first hole of your favorite golf course. Yet, if roughly $18,000 (what you will likely net from the VSIP) will cover that two-week Rhine River cruise you’ve always wanted, maybe waiting isn’t such a bad idea.