How does this calculator decide if the buyout is worth it?

The calculator compares your VERA pension (if you retire now) against the pension you would receive if you stayed and retired later. It then calculates how long the VSIP net lump sum (after taxes) would need to last to offset the annual pension gap. If that breakeven point is under 2 years, the buyout is green; 2-5 years is amber; more than 5 years is red.

Does VERA have a pension penalty?

No. For FERS employees, VERA retirement carries no annuity reduction penalty. This is a major advantage over MRA+10 retirement, which imposes a 5% penalty for each year under age 62. The trade-off is simply fewer years of service, which reduces the pension formula.

What is the VSIP maximum for DoD vs. other agencies?

Congress authorized DoD to offer VSIPs up to $40,000, compared to the standard $25,000 cap for most other federal agencies. After taxes (approximately 22% federal + 7.65% FICA), DoD employees can expect roughly $27,000-$30,000 net; other agencies roughly $17,000-$19,000.

What is the FEHB 5-year rule for VERA retirees?

To carry FEHB health insurance into retirement, you must have been enrolled for the 5 years immediately before your retirement date. If you fall short, OPM sometimes grants waivers when you have been continuously enrolled since your agency's VERA was approved. Verify with your benefits office before accepting.

When do I get the FERS Supplement under VERA?

The FERS Supplement bridges the gap to Social Security at age 62. If you retire under VERA before your Minimum Retirement Age (MRA, typically 57 for those born after 1969), you must wait until you reach MRA to receive the supplement. For example, retiring at 50 with an MRA of 57 means a 7-year wait.

If I take VSIP, can I return to federal service?

You can return to federal service after accepting VSIP, but you must repay the full gross VSIP amount before re-employment. The repayment bar lasts 5 years. This applies even to temporary appointments.

Does sick leave count toward my VERA pension?

Yes. Unused sick leave converts to additional service credit for annuity purposes at the rate of 2,087 hours per year. It does not count toward VERA eligibility thresholds (20 or 25 years), only the pension calculation.

What does the 1% vs 1.1% multiplier mean?

FERS annuity is calculated as High-3 × Years of Service × multiplier. The standard multiplier is 1.0%. The enhanced multiplier of 1.1% applies only if you retire at age 62 or older with 20+ years of service. Under VERA, most employees retire before 62, so the 1.0% multiplier applies.

Calculator

VERA/VSIP Decision Calculator

Your agency offered an early retirement or buyout. This calculator shows whether accepting makes financial sense — comparing your pension now vs. staying, breakeven in years, and a benefits checklist.

Reviewed by Jonathan D., 20-year federal employee · Formulas verified against OPM.gov · Updated June 2026

Step 1: Your Situation

Basic eligibility and agency information.

Current age

Years of federal service

Decimals OK (e.g. 22.5 for 22 years 6 months)

Retirement system

FERS (most employees hired after 1983)CSRS (hired before 1984)

Agency typeMy agency is DoD (Department of Defense) — $40,000 VSIP cap applies

Congress authorized DoD to offer VSIPs up to $40,000 vs. the standard $25,000 cap.

Step 2: Financial Details

Your pay, VSIP offer, and benefit details.

How do you want to enter your pay?

Enter annual basic payPick GS grade/step/locality

Annual basic pay (including locality)

High-3 average salary (optional)

Your average pay over the 3 highest consecutive years. Defaults to current pay. Calculate it →

VSIP amount offered (optional override)

Standard cap: $25,000. Leave blank to use the maximum.

Unused sick leave hours

Converts to service credit at 2,087 hrs/year. Check your leave and earnings statement.

FEHB enrollmentEnrolled in FEHB for the 5 years immediately before retirement

Required to carry FEHB health coverage into retirement. Missing this is a critical risk.

Step 3: Comparison Scenario

If you don't take the buyout, when would you otherwise retire?

Years until alternative retirement (1–20)

years

The calculator compares your VERA pension now vs. what you'd get if you stayed 3 more year(s) and then retired normally.

Estimates use official FERS formulas. Get an official annuity estimate from HR before deciding.

Your results will appear here

Complete all three steps and select Calculate Decision to see the verdict.

How the Decision Calculator Works

The calculator uses three inputs — your situation, your finances, and a comparison scenario — to answer one question: is the VSIP lump sum worth the permanent pension reduction?

The Breakeven Formula

VERA Pension = High-3 × Effective Years × 1%

Alternative Pension = High-3 (grown) × (Years + Extra) × 1%

Annual Gap = (Alternative − VERA Pension) × 12

VSIP Net = VSIP Gross × (1 − 29.65% combined tax)

Breakeven = VSIP Net ÷ Annual Gap

If the breakeven is under 2 years, the buyout is financially sound. Between 2-5 years is a judgment call. Over 5 years, staying earns more over any reasonable retirement horizon.

VERA and VSIP: Two Separate Programs

VERA — Early Retirement

Lowers eligibility to age 50 + 20 years, or any age + 25 years
No FERS annuity penalty (unlike MRA+10)
Starts your pension immediately
COLAs begin at 62 (FERS)
FERS Supplement may be delayed until MRA

VSIP — Cash Buyout

Up to $25,000 lump sum ($40,000 for DoD)
After taxes: approximately $17,000–$19,000 (or $27,000–$30,000 for DoD)
Must actually separate — no retirement required
5-year reemployment bar with full repayment obligation
Can combine with VERA if eligible

Best outcome: If you are VERA-eligible and your agency offers both, you can retire early under VERA and collect the VSIP — the maximum separation package.

VERA Eligibility Requirements

VERA early retirement eligibility paths
Path	Minimum Age	Minimum Service	Notes
50 + 20	50	20 years creditable service	Most common VERA path
Any age + 25	Any	25 years creditable service	At least 5 years must be civilian

Sick leave does not count toward VERA eligibility thresholds, but it does add to service credit for the pension calculation. Military service counts if a deposit was made.

Key Benefits to Check Before Accepting

FEHB Health Insurance — 5-Year Rule

You must have been enrolled in FEHB for the 5 consecutive years immediately before your retirement date. Failing this means losing federal health coverage. OPM grants waivers when you have been continuously enrolled since your agency's VERA was approved — check with HR.

FERS Supplement — Timing Matters

The FERS Supplement (roughly equivalent to your Social Security benefit at 62, prorated for federal service) bridges income until age 62. Under VERA, if you retire before your MRA, the supplement is delayed until MRA. For someone born after 1969 with an MRA of 57, retiring at 50 means a 7-year wait.

TSP — Rule of 55

Federal employees who separate during or after the calendar year they turn 55 can withdraw from TSP without the 10% early withdrawal penalty. Retiring at 50 means a 4.5-year window where TSP access costs an extra 10%.

COLAs — Delayed to 62

FERS retirees do not receive annual cost-of-living adjustments until age 62. A $3,000/month pension starting at age 50 with no inflation adjustments until 62 loses significant purchasing power over those 12 years. CSRS retirees receive COLAs immediately.

Worked Example: Age 52, 22 Years Service

A GS-13 Step 7 employee at the Rest-of-U.S. rate, age 52 with 22 years of service and 500 hours of unused sick leave, considering VERA vs. working 5 more years:

VERA versus staying five years comparison
Factor	VERA Now	Stay 5 Years
Age at retirement	52	57
Effective service years	22.24 (incl. sick leave)	27.24
Estimated High-3	$110,000	~$121,500
FERS multiplier	1.0%	1.0%
Estimated monthly pension	~$2,039/mo	~$2,754/mo
Monthly difference	−$715/mo by taking VERA
Annual pension lost	~$8,580/yr
VSIP net (standard $25K)	~$17,587
Breakeven	~2.0 years

This scenario falls into the amber zone — the VSIP breaks even in about 2 years, but the employee then permanently receives $715/month less for life. Whether that trade is worth it depends on health, post-retirement income plans, and how certain the "5 more years" scenario actually is.

2026 Federal Buyout Landscape

With DOGE-driven reductions ongoing and OMB directing agencies to submit RIF plans by March 13, 2026, more federal employees face VERA/VSIP decisions than at any point in recent history. OPM's proposed performance-based RIF rule could also change retention standing, making voluntary separation more attractive for some employees.

• SSA: 7,000-employee reduction target; RIF possible if voluntary separations fall short
• DoD/DHA: $40K VSIP; 5-8% civilian workforce reduction; multiple VERA rounds
• OPM: Retirement backlog at 65,237 in February 2026 — budget 2-3 months for processing
• VERA windows: Typically 30-60 days — once closed, no extensions

Important Disclaimer

This calculator provides planning estimates using official FERS formulas. It assumes 2% annual pay growth for the comparison scenario and uses simplified tax rates. Actual pension amounts depend on your official service computation date, exact High-3 period, and OPM determination. Always request an official annuity estimate from your HR office and consider consulting a federal retirement specialist before making a final decision.