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Early Out Offers Revisited Plus Updates

Posted By Dennis Damp On In ANNUITIES / ELIGIBILITY,BENEFITS / INSURANCE,FINANCE / TIP,LIFESTYLE / TRAVEL,RETIREMENT CONCERNS | Comments Disabled
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I wrote an article titled “Is a Voluntary Early Retirement (VERA) in Your Future [2]” last July about the impending early retirements and the VERA and VSIP programs. We continue to receive questions about these programs and we expanded our Voluntary Early Retirement Authority (VERA) [3] and Voluntary Separation Incentive Payment (VSIP [4]) guidance to help you decide what to do if an offer comes your way.  It is never an easy decision to make because there are so many variables to consider.

There is an expanding list of agencies now offering early outs including the DOA, DOE, FTC, GPO, Postal Service, the Air Force and others. More may be coming as government prepares to address the debt crisis. Are you prepared?

I was offered and applied for a VERA in the mid 1990s without a VSIP.  I had 25 years service and was eager to expand my business. My application was rejected and I retired 10 years later with 36.5 years of service including my sick leave. The annuity I would have collected with the VERA was approximately 65% less than what I eventually received at age 55; not counting the impact of ten years worth of COLAs! That is a dramatic decrease in annuity benefits especially considering that your last 10 years are typically your highest earning years.  Are you financially prepared? [5]

If a VERA is something you would consider start planning now.  Here is an index with links to helpful information and reports for various issues that you may need to consider:

The Move – Continued

In my last article titled “Are You Considering A Move or Vacation Home Purchase After You Retire” [11] I discussed my recent move and the options retires have to look forward to. Cynthia, one of our newsletter subscribers, provided some insightful advice to anyone contemplating a move in retirement.  Her husband retired 5 years ago and she is still working in federal service and hopes to retire soon.

She and her husband were considering a move to a 55 and older retirement community sometime in the next 5 years. They weren’t in any rush until her husband started cleaning out their garage in Florida and discovered their home had a “very large sink hole” under it.  After living in their home for 25 years they had to vacate on short notice after settling with their insurance company. Cynthia lamented, “Try packing up everything you’ve accumulated after 25 years in such a short period of time!

I can only imagine the heartache, trials and tribulations they had to go through.  They had to move in August one of the hottest months of the year in Florida!  During the move Cynthia fell and ended up with black and blue chin, scraps on her hands and arms, and a big bruise on her knee. She was sore for three weeks! She advises everyone to be careful and pay attention to where you are walking during a move.  Her advice to anyone planning a move is to:

Good advice for all

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice. Our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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