Federal + public sector

Federal employees face a different menu than the private sector: four distinct separation paths, each with its own statute, eligibility test, and tax and annuity consequences. The decision math turns on tenure, age, and whether the agency is offering buyout authorities concurrently.

Standard involuntary severance under 5 USC 5595 pays 1 week of basic pay per year of service for the first 10 years, 2 weeks per year after, plus a 10 percent age adjustment for each year over 40, capped at 52 weeks and paid as continued biweekly payroll rather than a lump sum. The Voluntary Separation Incentive Payment (VSIP) buyout has been capped at $25,000 since 1993, with a 2026 proposal to raise it to six months of salary not yet enacted. Voluntary Early Retirement Authority (VERA) opens at age 50 with 20 years of service, or any age with 25, at a reduced annuity. The 2025 Fork in the Road deferred-resignation offer drew more than 150,000 acceptances. Each path interacts differently with FERS and CSRS annuities and FEHB continuation, which is where the choice between them is actually made.