Should you stay or should you go? 10 tips for navigating your federal retirement decision

I think we can all agree with the following statement: “Career decisions are some of the most significant and challenging choices we make in our lives. When faced with a career conundrum, it can be difficult to know which path to take.”

Federal employees have faced one of the biggest career decisions of their lives this year—one literally titled “Fork in the Road.”

After speaking with many federal employees, I noticed that some had found a silver lining in the situation. They saw it as an opportunity for a new beginning, with an early retirement benefit available to eligible employees.

Although the Deferred Resignation Program (DRP) was the cornerstone of the “Fork in the Road” memo, in most agencies it also included a Voluntary Early Retirement Authority (VERA) option for employees of any age with 25 years of service, or those at least age 50 with 20 or more years of service.

For some, accepting early retirement offered a meaningful chance to pursue a new career path. Others have struggled with the uncertainty of making such an important decision—especially under the pressure of returning to in-person work and concerns that a future Reduction in Force (RIF) might follow the voluntary DRP offer.

One major incentive: full pay and benefits while delaying final separation until September. This contributed to the tens of thousands of federal workers who accepted the DRP offer to resign or retire by the end of fiscal 2025, on Sept. 30.

It has been widely reported that approximately 77,000 employees accepted the offer—within a window of just over two weeks. That’s a very short timeframe to make a life-changing decision.

DRP 2.0 has been offered at the departments of Agriculture, Defense, Interior, Treasury, and Veterans Affairs as well as at the General Services Administration and Small Business Administration.

Recently, it was announced that federal workforce reductions will continue into the next fiscal year. The Trump administration plans to eliminate more than 107,000 jobs across the government. Under current budget proposals, the Education Department will experience the largest reduction, followed by the Office of Personnel Management, GSA, SBA and NASA.

While some may navigate such decisions easily, others struggle with the weight of the unknown. And if the decision turns out to be the wrong one, the consequences can be hard to live with. Here are 10 tips to help employees manage the transition from federal employee to annuitant:

1. Evaluate your financial readiness: Start with your take-home pay—the money that goes into your bank account and covers your living expenses, with some hopefully left for savings, travel, college planning, weddings, and more. After covering necessities, this is the money that makes life enjoyable. Will you be able to replace it with retirement income, or will you need to find another source of earned income?
2. Have a plan to manage inflation: Your FERS retirement benefit begins cost-of-living adjustments at age 62 (earlier for employees under mandatory retirement, like law enforcement officers, firefighters, and air traffic controllers). If you’re retiring in your 50s or earlier, consider how you’ll cover rising living costs if you don’t have another income source or a second career.
3. Understand defined benefit vs. defined contribution plans: FERS includes both. The FERS Basic Retirement Benefit and Social Security provide guaranteed lifetime income. But your TSP savings—a defined contribution plan—can be depleted if you withdraw too quickly.
4. Avoid emotional decisions: Retirement can last decades, especially if you’re retiring young. Calculate your total income from all retirement sources (FERS, Social Security, TSP, military retirement, etc.). Speak with a neutral expert who isn’t emotionally involved in your decision. Draw on the insight of people who know you well. The workplace atmosphere may become negative as colleagues question, “Why us?” Remember: “This too shall pass.” When the dust settles, will you be glad you stayed or happy that you moved on?
5. Consider your later years: You might be healthy now and able to return to work if needed. But what if you or your spouse requires caregiving later? What if there’s a major home or car repair? Can you manage these without tapping into retirement savings? Are your investments prepared for both growth and risk, especially if the market declines or inflation surges?
6. Plan your life after retirement: If you’re fortunate enough to retire with financial security, how will you spend your time? Will you need a daily routine? Do you have hobbies or new interests to pursue? Be patient—adjusting to new rhythms takes time. Give yourself permission to say no to things that no longer serve you, and leave room to discover what brings you joy. Take comfort in knowing that “just for waking up every day,” you’ll receive income to support your new life.
7. Avoid decisions you’ll regret: Talk through your options with family or close friends. Set aside time for reflection. Consider consulting a professional such as a tax advisor, financial planner, estate attorney, career coach or a federal benefits expert. Are you setting yourself up for success or for struggle?
8. Accept that no one has a crystal ball: Retirement planning involves uncertainties. Laws may change, marriages may end, health may decline. You can’t predict everything—so build in a Plan B (or even Plan C). Remember the quote attributed to Mark Twain: “Some of the worst things in my life never happened.” Or this one: “Yesterday is history, tomorrow is a mystery, but today is a gift. That’s why they call it the present.”
9. Find the silver lining: If you’re a “glass half empty” person, this may take effort. Try shifting your focus to the positives in a tough situation. Practice gratitude. Reframing your perspective and learning from challenges can reveal unexpected opportunities for growth and resilience.
10. Understand retirement is a series of decisions: Retirement isn’t a single choice—it’s a journey. Life is full of twists and turns. I’ve known retirees who returned to federal service as reemployed annuitants and worked 5, 10, or more years to earn a second retirement benefit. Others who thought they couldn’t afford to retire later realized they were living better in retirement than they had while working. Every decision has consequences.

Many of these tips focus not on financial planning but on the emotional transition to retirement. Remember: You’re not alone in what you’re feeling—whether it’s fear, uncertainty, or excitement about what’s ahead.