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.
Step 1: Your Situation
Basic eligibility and agency information.
Decimals OK (e.g. 22.5 for 22 years 6 months)
Step 2: Financial Details
Your pay, VSIP offer, and benefit details.
$
$
Your average pay over the 3 highest consecutive years. Defaults to current pay. Calculate it →
$
Standard cap: $25,000. Leave blank to use the maximum.
Converts to service credit at 2,087 hrs/year. Check your leave and earnings statement.
Step 3: Comparison Scenario
If you don't take the buyout, when would you otherwise retire?
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
| 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:
| 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.
VERA/VSIP Guide 2026 →
Deep dive: eligibility rules, benefits impact, DoD's $40K cap, and common mistakes.
FERS Retirement Calculator →
Full pension estimate with survivor benefits, FERS Supplement, and Social Security.
High-3 Salary Calculator →
Find your exact High-3 average for accurate pension calculations.
Severance Pay Calculator →
Compare VSIP to what you'd receive as RIF severance pay if involuntarily separated.