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Voluntary Early Retirement – What You Need To Know

Voluntary Early Retirement – What You Need To Know

Voluntary Early Retirement is not something that a lot of people run into when they are getting close to retirement, but it’s important that you understand all of the different decisions that you would face if you happen to be one of the few employees that are given the option for Voluntary Early Retirement.

Voluntary Early Retirement is something that may allow certain federal employees the option to choose to retire early depending on their circumstances and the status of the agency that they are working with. Typically, as a federal employee, you’ll be eligible for retirement after 30 years of employment as long as you’re at least 55-years-old or at the age of 60 if you have at least 20 years of work through the government agency, but with the voluntary early retirement, there is going to be some exceptions from the rules.

Voluntary Early Retirement is directed by the Office of Personnel Management, and they can lower the age requirement and the amount of years of service that are required for you to apply for retirement. Under the Early Retirement rule, the number of years of service is reduced to 20 instead of 25, regardless of how old that you are. If you decide to take advantage of the Voluntary Early Retirement offer, you’ll start receiving an immediate annuity, but there is a 2% reduction for taking the early retirement.

The Office of Personnel Management decides which jobs or positions will be included or excluded from the program. Typically, they will use this voluntary program when an agency decide that they should reduce the number of employees in a particular agency. They could choose to do this because of a lack of resources, reorganizations, closing the agency, or any number of other reasons. They will use their program to decrease the number of people that are demoted or fired because of the changes that are happening within the organization.

Should I Take The Voluntary Early Retirement?

Deciding if you should accept the early retirement offer can be a tricky decision, but the offer is only going to be a limited time offer, and if you wait too long, it will expire, and you won’t be able to take advantage. There are several different factors that you should consider when you’re weighing all of your different options.

The most obvious category that you’ll need to look at is your finances. You’ll have to take a long and hard look at your retirements account and decide if you’re in a place that you can retire early. It’s important that you have the money that you need to retire comfortably without having to worry about finances. The early retirement will give you access to the annuity, but this will only supplement the income that you’ve built up to use during retirement.

You will also need to consider your healthcare. More than likely you get your health insurance through your job, and if you retire early, then you won’t have that insurance protection, and you might be too young to enroll in Medicare, which could leave you with a few different options for private insurance. While you can always enroll in one of those private plans, it’s going to be a significant expense that’s added to your budget every month.

Another factor that you’ll need to consider is if you’re emotionally ready for retirement. Going from working every day to full retirement is a shocking transition, which can be jarring to a lot of recent retirees. While early retirement sounds like a fantastic idea, you need to stop and consider if you’d be happy retiring sooner than you planned.

One factor that might sway you in one direction or another is the simple question of “do I like my job?” and this can be one of the most important things for you to consider. This could be the perfect opportunity to leave a job that you hate, without losing the retirement benefits that you’ve been building. With an early retirement, you can utilize the annuity, and then find a job that you enjoy. Your happiness is one of the most important things, and they could be offering you the chance to find a job that you will love and begin to draw those annuity benefits.

Retiring – Early or Wait?

Planning for your retirement is difficult. We know that. There are dozens and dozens of different factors that you’ll need to decide to ensure that you’re making the best decision for you and your family. Retirement can be one of the best times of your life. You’ve worked hard to reach that point, and now you can sit back and enjoy it, but should you start this stage of your life early, or should you wait until the age that you planned on? Every person is different, and everyone is going to have different needs and retirement plans, which means that no right or wrong answer will work for everyone.

Make sure that you get advice from financial experts before you make any decisions about accepting a Voluntary Early Retirement offer. That offer could have an enormous impact on how you spend your retirement years.


MedicareWallet.com is an unbiased, online resource for individuals turning 65 or already on Medicare. Our utmost goal is to provide information in a way that is user-focused, informative and ethical. With a combined 40 years of experience in the Medicare market, we can answer any questions about Medicare and Medigap insurance. Feel free to reach out to us at 800.376.0824 or by email atinfo@medicarewallet.com.

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