Trump DOGE Exit Offer Vexes Federal Workers Nearing Retirement

Federal workers mulling their future health and retirement benefits are at an impasse as they weigh a deferred resignation offer from the Trump administration that is itself subject to a federal court challenge.

Since the deferred resignation offer was emailed to more than 2 million federal employees on Jan. 28 by the Elon Musk-helmed Department of Government Efficiency, retirement advisers who specialize in government employment told Bloomberg Law they have witnessed their largest-ever influx in inquiries from prospective clients.

A US District Court for the District of Massachusetts judge weighing a lawsuit challenging the DOGE offer complicated matters on Thursday by opting to delay the original Feb. 6 deadline for worker responses until after a Feb. 10 court hearing on a longer-term halt.

Between the lawsuit, technical questions about the DOGE early retirement offer, and a looming promise from the administration to drastically cut the federal workforce in the near future, retirement advisers and benefits attorneys say federal workers are at a loss. They face the question of whether to hold on to their jobs and try to eke out a few more dollars in retirement or take the DOGE offer before they reach retirement age and avoid the risk of termination.

“This is real human lives” said Wayne Brown, a retirement planner, founder, and CEO at Dugan Brown LLC, a federal workplace financial planning firm in central Ohio. “You’re talking about someone who’s put in 25 or 30 years of their life toward a pension and health care and life insurance and benefits for life. This decision is causing a lot of real anxiety and real stress and real pressure among these people who, like these positions or not, dedicated their lives to serving their country in some capacity.”

Most federal workers save for retirement through a combination of Social Security, the Thrift Savings Plan modeled after the private-sector 401(k)s, and a pension called the Basic Benefit Plan that is tied directly to salary and years of service.

Exiting government service before traditional retirement age deprives workers of 401(k) vesting time and portions of future defined benefit plan payouts.

DOGE’s “Fork in the Road” email offering deferred resignation appears styled after a similar offer the Tesla Inc. and SpaceX CEO Musk made former Twitter employees after he bought their company, now X Corp., in 2022.

The billionaire’s ties to the buy-out offer are adding to workers’ apprehension, since Musk laid off nearly half Twitter’s workforce with only a month’s pay, despite a promised severance package.

Uncertainty surrounding the deferred resignation offer and its impact on worker benefits is one of the primary reasons so many workers have sought help from retirement experts, said Thiago Glieger, a private wealth adviser for federal workers at Maryland-based investment advisory firm RMG Advisors.

But the truncated timeline and limited detail from the government’s Office of Personnel Management has meant few if any have all the answers.

“Workers facing one of the toughest decisions of their professional lives can’t get clarification, because the time period is so short,” said Brown. “When 2 million people are all trying to call HR, you’re not getting your questions answered, especially if HR doesn’t know the answers themselves.”

Voluntary Early Retirement

OPM has sweetened the initial federal worker deal in the past week by granting voluntary early retirement authority (VERA) to agencies impacted by deferred resignation. VERA gives agencies the ability to lower the government’s minimum retirement age in order to induce retirement, but it’s never been used in conjunction with a deferred resignation offer, said Heather White, a partner at Federal Practice Group LLP, a Washington employment law firm.

The interplay between the two offers appears “scattershot,” White said, only adding to workers’ confusion.

The government offered VERA only after federal worker unions started vocally criticizing the deferred resignation deal. Similarly, the original deal was modified with a written contract after those complaints appeared to outline an easy out for workers unbound by any enforceable agreement.

“This is them trying to fit themselves back within existing federal laws and programs that govern layoffs and severance,” White said. “It’s like they realized that federal retirement programs will be impacted.”

The VERA offer, only available to workers with at least 20 years of service, introduces the same tough challenge to a new class of slightly younger workers deciding whether to earn more or leave early.

“The people who are more heavily considering this are the ones who are near or at the end of their careers anyway,” said Glieger. “For those at retirement, it may be simple. For those near retirement, it’s a lot more complicated.”

For workers whose age and years of service would qualify under the revised deal, VERA seems to represent an unexpected windfall, White added.

Those workers appear to have the option to leave work now and enjoy up to 10 months of added time to their benefit packages without clocking in or logging on. The only catch seems to be that, by taking the deal, workers waive their right to sue their former employers.

But White also said the “combination of hostility and unexpected financial benefits” in the Trump administration’s offers to federal workers are “disturbing” and should give them pause.

“My advice would be that folks should only do this if they can afford for it to fall through,” she said."I know I would be hesitant to take this offer if I didn’t have some circumstance at work that would make me want to leave early. I would stick it out and preserve my options.”