Retirement Benefits

The prospects of Defense Department base closings, along with tight budgets in many other agencies, has raised the possibility for many employees of receiving an incentive payment to resign or retire. Traditionally, most payments go to employees at or near retirement eligibility.

Buyouts are not the pot of gold at the end of the rainbow that many employees believe they are, however, and they come with several important restrictions. The buyout amount is the lesser of the amount of severance pay you would get if separated involuntarily or $25,000, and despite rumors to the contrary, the government has no plans to sweeten that amount.


A buyout taker must repay the entire (pre-tax) amount of the incentive to the agency which paid the buyout if the employee accepts employment with the government of the United States or under a personal services contract within five years of separating with the incentive. The direct rehiring restriction applies to quasi-governmental bodies such as the U.S. Postal Service as well as to part-time and temporary positions. A