Posted on Friday, 3rd January 2025 by

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Elon Musk and Vivek Ramaswamy met with the House of Representatives in Washington, D.C., to discuss their plan to slash government regulations and streamline the Federal executive branch. They will lead Donald Trump’s administration’s Department of Government Efficiency (DOGE).

They won’t hold cabinet positions and will function outside government to advise the new administration on improving efficiency. Their focus will be to purge obsolete organizational elements, eliminate wasteful spending, relocate a portion of the centralized staff in major metropolitan areas back to field positions, and cut federal agency staffing where appropriate. Federal government employment has grown approximately 17% over the past two decades.

Inefficiencies Abound Across the Board

The USPS reported a $9.5 billion net loss for fiscal 2024 after a $6.5 billion loss in FY 2023; they project a $6.9 billion loss in 2025!

The Pentagon recently failed its seventh consecutive audit; it couldn’t fully account for its massive $824 billion budget. The Government Accounting Office (GAO) has flagged this issue for the department since the early 1980s.

The U.S. Accountability Office (GAO) reports, “Waste is when individuals or organizations spend government resources carelessly, extravagantly, or without purpose. Federal programs may be vulnerable to waste for several reasons.”

They list the major areas where waste occurs: asset mismanagement, inadequate oversight, and lack of adherence to established practices and policies.

Personally, I can think of many instances of inefficiency and government waste from my time with the government.

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Heading for the Exits

Employees should review their retirement eligibility and available early retirement options as the DOGE begins their work.

Over the next few years, approximately a third of the federal workforce will be eligible for regular or early retirement, especially when agencies offer Voluntary Early Retirement Authority (VERA) and the Voluntary Separation Incentive Program (VSIP) options. This could moderate the impact of a pending Reduction in Force (RIF).

The early retirement benefit is available in certain involuntary separation cases and cases of voluntary separations during a major reorganization or reduction in force. To be eligible, you must be age 50 with at least 20 years or at any age with 25 years of service.

Agencies may pay up to $25,000 VSIP or an amount equal to the severance pay an employee would be entitled to receive, whichever is less. This amount can be raised under certain circumstances.

Federal Employees Retirement System (FERS)  

The Federal Employees Retirement System offers retirement with as little as 10 years of service at the minimum retirement age of 57 for those born in 1970 or after. The minimum retirement age decreases for those born before 1970.

A  special supplement similar to Social Security is available for FERS annuitants who retire before age 62 and are paid as an annuity until age 62.

If you retire at the MRA with at least 10 but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62 unless you have 20 years of service, and your benefit starts when you reach age 60 or later. You can defer collecting your annuity to avoid this penalty.

Employees who leave federal service before they meet the age and service requirements for an immediate retirement benefit may be eligible for deferred retirement benefits. You must have completed at least 5 years of creditable civilian service to be eligible. Review the FERS eligibility charts for more information on this subject.

Civil Service Retirement System (CSRS)

The Civil Service Retirement System offers retirement at age 55 with 30 years of service, 60 with 20 years of service, and 62 with 5 years of service.

Many CSRS employees aren’t eligible for Social Security because they didn’t work 40 quarters, ten years, paying into the Social Security system. CSRS employees paid a similar monthly amount into their CSRS retirement system.

If you leave Federal service before you meet the age and service requirements for an immediate CSRS retirement benefit, you may be eligible for deferred retirement benefits. You must have at least 5 years of creditable civilian service to receive a deferred annuity.

OPM advises that you wait until 60 days before your 62nd birthday to apply for deferred retirement benefits and then contact OPM for an “Application for Deferred Retirement.”

Early Retirement Systems

A 20-year retirement system was created for certain designated positions requiring employees to meet vigorous physical demands. This retirement system allows employees to retire sooner, with just 20 years of service. It also includes a mandatory retirement when the employee reaches a designated age or years of service.

The 20-year retirement system covers Law Enforcement Officers (LEO), Firefighters (FF), Air Traffic Controllers (ATC), and Nuclear Weapons Couriers (NWC).

I believe few in this group will be impacted; however, you never know what direction the reorganization will take. Review your early retirement options to be prepared. There are rumors that certain positions or groups may be contracted out.

Federal employees and recent retirees with security clearances can
search thousands of high-paying defense and government contractor jobs.

Resources to Get You Started

There are many options to explore, and anyone that the DOGE may impact needs to thoroughly assess their situation, including a cost analysis for pre and post-retirement to see what you and yours will have to live on.

The following guides, spreadsheets, and schedules will help you assess your personal situation:

Summary

DOGE will evaluate the Executive Branch. The legislative and Judicial branches also require reforms.

Budgeted earmarks by both parties for favored groups and absurd boondoggle projects push us further into debt and have little to do with the associated legislation. To be fiscally responsible, Congress must pass laws to balance the budget and pay for new legislation and any associated spending by cutting programs and costs elsewhere.

The national debt crisis is primarily associated with Congress’s wasteful spending and lack of oversight. Without laws requiring Congress to pay for new programs with cuts elsewhere, efficiency enhancements will be overshadowed for years.

We also need a constitutional amendment establishing term limits, such as 4 terms (8 years) for Congressmen and 2 terms (12 years) for Senators. A good number of representatives would not be eligible for reelection every election cycle. This would permit them to focus on the issues and vote their conscience rather than the party line and what they must do for reelection.

The employees will suffer the consequences of the upcoming reorganizations, but they aren’t the cause; Congress and our leadership, and the lack thereof, have mushroomed our national debt and are bankrupting America.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Last 5 posts by Dennis Damp

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Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (2)


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2 Responses to “A Potential Federal Retirement Tsunami – The DOGE Impact”

  1. Nancy Says:

    We have term limits!! It’s called voting. We’re voting in people that are 85+ years old. I don’t know how we can get people to pay attention and override the lobbyists. Since we can’t do ourselves, I am all for the DOGE to do it. Thank you for your always thoughtful posts.

  2. Dennis Damp Says:

    I agree, voting does impose limits. Many representatives get too powerful and spend much of their time raising funds for the next election and are overly influenced by lobbyists and major donors as you mentioned. The 21st amendment was initiated by Congress after President Roosevelt served four terms. The article was ratified as an amendment to the Constitution by the legislatures of three-fourths of the States limiting our Presidents to two terms. Thanks for reading my articles and for your kind words.

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