As someone who literally wrote the book on how to negotiate a severance package, I love severance case studies! The second rule of FIRE (Financial Independence Retire Early) is simple: never quit your job—always try to negotiate a severance. If you’re planning to leave anyway, why not attempt to create a win-win scenario and walk away with a financial cushion?
Both my wife and I successfully negotiated severance packages in 2012 and 2015, which allowed us to retire early, write, travel extensively, and raise a family. We haven't returned to full-time work since.
Now, in a major development, the Trump administration is offering severance packages to all federal employees who voluntarily leave. The goal? To rapidly shrink the U.S. government and cut costs. Just look what they are doing to USAID, laying off ~99% of its 10,000 employees. Whether you love or hate Trump, it's important to do a thorough analysis of what's being presented and keep your emotions at bay.
A memo from the Office of Personnel Management, the government’s HR agency, also states that all federal employees will soon be subject to “enhanced standards of suitability and conduct” and hints at further downsizing.
When I first heard about the offer—eight months of severance pay and benefits—my immediate reaction was simple: take it! Take the free money and change your life for the better!
But first, let’s conduct a more analytical approach before deciding. Regardless of whether the buyout package is legal or funded, federal employees must think critically about their futures. The government has revealed its hand—now it’s up to employees to determine their best path forward, no matter the outcome.
How To Determine Whether To Take The Severance Package
If your employer is voluntarily offering you a severance package—and you've been thinking about quitting—this is a golden opportunity. You should strongly consider taking the offer, but also try to negotiate for more since the discussion about layoffs is already on the table.
For those undecided, here’s a simple way to assess whether accepting the severance makes sense.
The Basic Severance Barometer
Severance packages typically range from one to three weeks of pay per year worked. To determine if the offer is favorable:
- Calculate what your severance would be based on the number of years you've worked.
- Compare it to the actual offer.
- If the severance package exceeds what you’d normally receive for your tenure, it’s a strong sign to take it.
Applying This to the Federal Government Offer
The latest federal government severance package offers eight months of pay, which is about 33 weeks. Based on typical severance calculations, this package is equivalent to someone with 11 to 33 years of experience receiving a severance. Let’s take the midpoint—22 years—as a benchmark.
- If you’ve worked less than 22 years, the deal is better than standard, and you should take it.
- The fewer years you’ve worked, the better the deal becomes.
According to Pew Research Center, the average federal government employee tenure is 11.8 years. This means the majority of federal employees should take the severance package, as they are receiving a much higher payout than what they'd typically be entitled to.
Again, a severance package is free money for not having to do any work.
Other Considerations Before Accepting The Severance Package
If you love your job or have worked in the federal government for more than 22 years, you may hesitate to accept the eight-month severance package. Additionally, if you're unsure about finding another comparable-paying job before the severance runs out, rejecting the offer may seem like the safer choice. In such cases, it’s reasonable to stay put and hope future layoffs don’t impact you.
That said, from my experience, the first round of layoffs often provides the best severance packages. As layoffs progress through multiple rounds, the employer's focus shifts from reducing headcount quickly to fine-tuning workforce numbers, which often leads to less generous offers down the road. After all, most of the cost savings is already done.
Rejecting The Severance Package Means More Work
If you decide the severance package isn’t good enough, be prepared to work harder for your money.
- Increased Workload – With thousands of colleagues taking the severance, those who remain will have to pick up the slack.
- Culture Shift – The Department of Government Efficiency is now being led by Elon Musk, bringing a shift from a secure, cushy job to a ruthlessly competitive environment.
Here’s an excerpt from what was e-mailed to over two million federal employees.
The reformed federal workforce will be built around four pillars:
1) Return to Office: The substantial majority of federal employees who have been working remotely since Covid will be required to return to their physical offices five days a week. Going forward, we also expect our physical offices to undergo meaningful consolidation and divestitures, potentially resulting in physical office relocations for a number of federal workers.
2) Performance culture: The federal workforce should be comprised of the best America has to offer. We will insist on excellence at every level — our performance standards will be updated to reward and promote those that exceed expectations and address in a fair and open way those who do not meet the high standards which the taxpayers of this country have a right to demand.
3) More streamlined and flexible workforce: While a few agencies and even branches of the military are likely to see increases in the size of their workforce, the majority of federal agencies are likely to be downsized through restructurings, realignments, and reductions in force. These actions are likely to include the use of furloughs and the reclassification to at-will status for a substantial number of federal employees.
4) Enhanced standards of conduct: The federal workforce should be comprised of employees who are reliable, loyal, trustworthy, and who strive for excellence in their daily work. Employees will be subject to enhanced standards of suitability and conduct as we move forward. Employees who engage in unlawful behavior or other misconduct will be prioritized for appropriate investigation and discipline, including termination.
Getting Paid To Work From Home Was Amazing—Now It’s Gone
One of the best life and money hacks is working for a company that lets you work from home while investing in companies that force employees to be in the office at least three days a week, e.g. Amazon and JP Morgan. The idea is to enjoy life while investing in people who enjoy life less because they're working more to boost company profits.
Working from home offered a superior lifestyle—no commute, more flexibility, and the ability to spend more time with family and friends. During the pandemic, I saw firsthand how great it was—tennis and pickleball courts were packed on weekdays with remote workers enjoying their newfound freedom.
Life was so good that I even considered getting a full-time job just to get paid to have fun! But securing a role at Google, Meta, or similar companies wasn’t easy. And eventually, they reversed course, implementing mass layoffs and forcing employees back into the office three days a week. Then their share prices boomed, for other various reasons too.
Now, for federal employees, the shift is even more drastic—going from full-time remote work to five days a week in the office. The quality of life hit will be significant. If you've worked for the federal government for less than 11 years, I’d strongly consider taking the severance package.
Assess Your Abilities Before Leaving Your Job
The more confidence you have in your ability to make money, the more inclined you should be to take the severance package. If your skills are highly transferable, or if you already have job offers lined up, taking the severance makes sense. There’s nothing better than getting a severance package while immediately landing a new job—that’s the ultimate double dip, which I discuss in How To Engineer Your Layoff.
On the other hand, if you know you’ve been getting paid more than you’re worth, then it may be smarter to stay put. Keep collecting your paycheck while quietly looking for another job. If you’re a significant underperformer, the Department of Government Efficiency (DOGE) might eventually let you go without any severance. So start taking action immediately to protect yourself.
Consider the Impact on Your Pension
Also, think carefully about how leaving your job will affect your pension in the future. Your pension is likely far more valuable than you realize. If you’re close to qualifying for a pension or on the verge of a pension pay bump, it may be worth staying and grinding it out a little longer.
In many cases, just a few more years of service can result in a significantly higher payout for life. So before accepting a severance package, run the numbers and weigh the long-term financial impact of walking away.
Furthermore, I’d wait until the final deadline to accept or reject the buyout package, as circumstances could change. The last thing you want is to jump at the offer too soon, only to find out later that the government can't follow through on its payment. Then you'd be exposed to get laid off with an inferior package in the future.
Having A Day Job With Benefits Is Amazing
After 16 years running Financial Samurai and another 16 years working traditional jobs and consulting, I have a clear perspective on what it takes to succeed in both. Both require hard work, but entrepreneurship is relentless—there are no days off if you want to survive and grow.
In retrospect, having a steady paycheck with healthcare and a pension is a luxury, especially if you have a family to provide for. A day job is like snuggling in a warm nest with a thick, furry blanket and a cup of hot chocolate while it snows outside. Meanwhile, entrepreneurship often feels like a sink-or-swim battle in the middle of the rough ocean for survival!
As an entrepreneur, you literally need to earn 30% – 60% more just to match the take-home pay of a steady job. There’s no pension unless you fund one yourself. On top of that, you’re on the hook for double the FICA tax.
As you can see below, the financial burden of self-employment is much higher than most people realize.
So if you don’t have the mindset to hustle relentlessly, or you are too uncomfortable with uncertainty, the decision to take the severance package becomes trickier. Once you leave your job, especially as you get older, it’s tough to find a similar-paying role again.
The better course of action may be to simply work harder and build better relationships. If you do eventually get laid off, hopefully, the government will also give you a severance package. But there are no guarantees.
I'd Take The Money And Go To The Beach
For the millions of federal government employees being offered a severance package, it’s time to crunch the numbers and do an honest assessment of your abilities.
Personally, as long as I keep my lifetime pension, I’d accept the severance package and explore something new. If I’m eligible for a pension, that means I’ve already worked for the federal government for at least five years. Doing the same work gets boring for me after ten years.
I’d use this time off to spend the entire summer with my kids, traveling to exciting new places. At the same time, I’d apply for unemployment benefits and search for other jobs that offer remote work. Plus, I’d work on my side hustle to become less reliant on a day job moving forward.
These voluntary severance packages don’t come around often, so I’d take it! If you’ve managed to secure a federal government job in the first place, you should have the confidence in your ability to land another job down the line. Best of luck!
Take Control Of Your Own Destiny
If you want to learn how to negotiate a severance package and break free from a job you dislike, pick up a copy of How to Engineer Your Layoff. Now in its 6th edition, the book has been refined over the past 13 years with fresh strategies and insights. You have more power than you think, especially after reading my book. Use the code “saveten” at checkout to save $10!
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I’m one of the 75,000 that signed up for the offer. This is a great deal for anyone not interested in returning to the office full time (whether by choice or circumstances). The alternative that the union and democrats are offering is to quit with no severance. Seems like a clear choice to take the offer.
Congrats! I hope you enjoy your time off and find something new and exciting in the future!
wow – just read all the comments and so one-sided…coordinated effort by anyone? All should applaud getting rid of fraud and waste, or, are people going to use the argument that it is too small a percent of overall budget to make a difference? unreal
Do you let your children steal candy because the store makes millions? Let’s change the culture to make fraud frowned upon again. Let’s stop telling people to pay their “fair share” when that is purposely vague to give the person demanding it power over another.
Having worked in corporate America for 25 years, I believe Musk was looking for a list of “volunteers” to leave their jobs without severance. The severance package was dangled with a very short decision window so that workers would “accept” the offer in large numbers by manipulating a visceral, emotional response rather than a logical response. The workers who reached for the carrot may find that the carrot is found to be illegal (by design) or otherwise revoked. And then Musk has his list of workers that will be terminated without severance. So simple yet so effective.
For those of you who already put your names on the list, I hope I am wrong.
Sam: perhaps you can respond with your take on what you would do if the deferred resignation offer is not upheld. Some people will follow your analysis and conclude that the severance is good for their case and accept, and there is a greater-than-zero chance that this won’t get paid out (https://www.vox.com/politics/398618/elon-musk-doge-illegal-lawbreaking-analysis). You feel good about just saying “well, it’s your choice”?
You have to weigh the alternatives. If you don’t take the severance package, what percentage chance are you going to be laid off with a lesser severance package or no servants package? Nobody knows the exact outcome, so you have to think probabilities. But from my experience, the first offer is usually the best.
What do you plan to do? And have you read my book on severance package negotiation yet? I wouldn’t recommend making a decision without reading it, but people are free to do what they wish. I feel that too many people are shooting blind and have no idea about the process.
And I don’t think this article just says “well it’s your choice.” It provides a logical framework on how to decide whether to take it or not.
How long have you been a federal government employee and what is your experience on severance packages? It’s always good to get some background information from commenters so I have a better understanding of where people are coming from. Thanks.
Yeah, but your title is a call to action to take the package, one that (using probability) is unlikely to be paid out. For goodness sakes, the offer is from Trump and Musk, do you trust them??? Given one has a history of not paying out and the other just ran this exact playbook and also not paid out at Twitter?? You feel good about approaching this as if it’s a legit offer?
I plan to do nothing as I am FIREd already and got out of government a while ago. Having worked in HR, I fully understand that severance packages can be both good for the employee and the organization. But this is not that. You don’t offer the entire organization a buyout within the first two weeks of joining it without taking the time to understand what the critical functions are. This is an overt litmus test, so to treat this like a true financial analysis is a disservice to your readers. This entire offer is a disservice to the populace.
Your analysis is also assuming everyone is a rational actor and we should all be looking out for ourselves, and there is some truth to that. But don’t buy into the all (or even most) government employees are lazy deadweight. The ones I’ve worked with care about their mission. As other posters have noted, there’s a reason you can’t run the government like a company.
Got it, I apologize for being a disservice to my readers. Given your strong beliefs and expertise on the subject, would you like to write a guest post to provide great service to others? I think it’s always good to take action and be the change you want to see.
If you have suggestions on how I can improve my severance negotiation book that is now in its 6th edition, I’d love to hear it as well for the seventh edition. It’s helped thousands of employees negotiate the severance since 2012 and I’m always trying to make it better.
Also, that’s great that you FIRED working in HR for the government! It just goes to show that you don’t need a big paycheck to retire earlier. I’m up to hear more of your story. Thx
A guest post isn’t needed at all, as what I’d have to write would veer away from finance! As someone else alluded to, if the wrong people take the “buyout” then the capability of their agency is degraded and we are worse off for it. You said so yourself, if you assume 10% inefficiency/over-hiring, you should correct that, but that implies you find that 10% to eliminate. If you allow it to be a random 10% eliminated, the unintended consequences can be severe. You conduct layoffs with a scalpel and dignity, not a chainsaw and threats.
Your analysis here is just fine, in a NORMAL negotiation and personal finance setting. But this isn’t that, and it’d be a much better message if you foot stomp a LOT harder about this questionable offer. For instance, by changing the article title. I’ve always enjoyed your story; this is an opportunity to use your pulpit for the greater good.
Side note: You can take a look at the pay scale (general schedule, or GS) for civil servants. Depending on role, experience and tenure, you can get pretty decent salaries!
OK, I will try to foot stomp harder for you! And please do give me feedback on my severance negotiation book too.
Would you like to share your story on how you fired on a government HR salary?
To be honest, I have not read your book as I did not negotiate a severance. Perhaps foolish but never felt the need to max out every situation. I would ask though: do you have content on what to do if you negotiate a great severance and then have it rescinded? Because we might be about to witness a bunch of use cases soon, plus the current job environment is rampant with companies exerting their upper hand in the crappiest ways possible to employees and candidates.
My FIRE journey was straightforward: spend less than I made, limit lifestyle creep as I progressively earned more and invest the excess for the long haul. There were definitely elements of luck, and also a healthy dose of discipline. Given my particular expertise applied to HR, I was able to earn a pretty solid income. It seems like you’re surprised that civil servants are capable of earning well into the six figures, even at base salary without figuring in actual total comp!
Cool. I’m aware of the pay for many government employees but not all. Your lifetime pension is a great benefit.
Can you share what age you retired and whether you have a working spouse and kids? Net worth range would be great too, as many who haven’t fired do wonder about the details.
Profiling a government employee who FIRED will be fascinating, as it might inspire other government employees to fire as well. It’s the same thing this case study and helping government employees believe they can negotiate as well.
My biggest challenge now is taking care of a wife and two young children in San Francisco. I’ve been lucky with the bull market, but that won’t always be the case. It would be nice to have a working spouse, like many of my male FIRE contemporaries. But there is no way she wants to return to work after leaving in 2015.
So it’s back to the grind, in my own way! The link has my latest passive income figures and goals.
Can empathize about the kids; one of the reason I pulled the cord when I did was to spend more time with my kid before we’re empty nesters. The days may be long but the years are short! I think part of your challenge is that you’re sort of locked in on the Bay; I am not at a FIRE level where I could but that’s not my goal and if I need to relocate to a LCOL location I’m willing to do so. But I support everyone having the fortitude to work towards their own goals!
In this doxx-happy age, I’m willing to share some general features of my journey that are still hopefully helpful:
-FIRE was achieved in two-player mode, early forties.
-I worked for half a decade in government, double that in government contracting and some more years in the beginning trying to figure out what was interesting that I didn’t completely suck at. So yes I have a small-ish pension, but the more valuable benefit was the retirement contribution match and the cheap fees in the TSP (government version of 401K).
-Liquid net worth will cover annual expenses (inflation adjusted) until age 100. That’s with portfolio growth about ~5%. Statistically, my life expectancy is 81 and the annualized return for the S&P the last 50 years is ~10%.
-Further, my forecast factors in my tax situation, and minimizes the amounts from my small pension and social security. I like stress testing my finances; if it can survive the doom scenarios I should be good.
-I don’t think net worth details matter much if you don’t know annual expenses. It’s probably more useful to know that my NW is ~45x annual expenses. Use whatever number you want for x.
@Cynthia – with 18 years under your belt you should have a better pension than me! Although I forget when the switch was from CSRS to FERS, hopefully you got in on some of the former. You say you find it hard after all those years, have you taken an in-depth look at your current financial position relative to your goals?
I’d love to know how you’re fired as a government employee as well. What age did you leave and what type of FIRE are you eg Lean, working spouse FIRE, etc.
if you could share more details, that would be great because I found it hard to do even after 18 years as a government employee.
Thx!
Ah, sorry, you said “found” it hard to do. Congratulations on your own FIRE journey!
It’s amazing how so many of the angry comments are really just people’s dissatisfaction or hatred of Trump, instead of taking an objective view at the buyout package. It’s a good one if true. And employees should take it if they are thinking of leaving anyway.
Don’t miss out on a golden opportunity just because you dislike someone.
Key words being “if true”. I wouldn’t hesitate to take this offer from my current company, but think it’s reasonable to seriously question whether you can trust a deal that sounds too good to be true, especially given the current state of affairs and the questionable history of the people making the offer. I certainly wouldn’t bet my job on it.
I take it from your comments that you’ve never been in Federal service. Otherwise, you wouldn’t have said this. Government service is just that, a service. They cannot run government like a business. If I were still in federal service, I would not voluntarily quit. This offer is made by the same loser who never paid out severance to his own employees and are still going through the court. Second, I do not believe what Trump and Muzk is doing is legal. This funding is approved by the Congress. The Executive branch’s power is limited by the Constitution. They cannot undo what Congress did.
I believe Trump and Musk bluffed, and people fell for it. Or, the 60 K that have since voluntarily resigned may be looking to double-dip, knowng this deal will likely not be honored, and the government will give them back pay for a fraudulent deal.
You’ve left out one important factor: trust. How much do USG employees trust the USG at this time to follow through on their promises? There are many employees who had planned to retire between March and August 2025. At first, taking the offer seems like a no-brainer: withdraw your retirement and continue to get paid your full salary through September 2025 while doing nothing, then retire at the end of September 2025, and get your pension and lifetime health insurance. What’s the catch? None of us trust the current administration to follow through and actually do this. Musk made a similar offer at Twitter and then stiffed dozens of employees; the subject line of the email was the same. There’s no actual confidence that OPM can legally make this offer either. So employees already eligible to retire in 2025 and planning on retiring in 2025 don’t want to take the offer because lifetime health insurance and a lifetime pension are far, far, far, far more valuable than 8 months of paid admin leave. Because trust is so low right now, we are going to see far fewer people take the offer than the numbers the White House estimated. (They estimated 3 to 6% of 2 million employees will take the offer, or 60,000 to 120,000 employees.) It’s not even clear if Foreign Service (are they National Security?) or EFMs (are they USDH?) are eligible for the offer.
I’m a current federal employee with just shy of 5 years of civilian service, and 4 years military if I buy back that time. Asking us to resign by replying to an email is definitely shady, but I’m keeping an open mind.
If it’s a legit offer, then it’s fairly good. If they had kept to their original idea of offering 2 years severance for an immediate resignation, it would be a no-brainer.
Also, when I started I was in the office 4 days a week, with 1 day of telework. I changed jobs to a more in-demand career field (much more difficult work) with 1 day in the office, and 4 days teleworking. I know the current line is that federal employees are just chilling at home and not working, but I can assure you that everyone in my group is working. We have measurable output that our supervisors watch.
Ordinarily they should take the buyout and get out of the toxic place, but nobody trusts the current administration and congress, and they may take the buyout and get nothing and also lose their positions. So with strong union federal employees will put up a fight. In the mean time the government is basically in limbo. It is not about efficiency or merits, it is about profiting ones own family and billionaire backers. I also saw first hand university researchers’ lifeline was abruptly cut off and face uncertain future. These measures impact average people and families and do not actually save tax dollars, just a way to threaten people to make them fearful and allow the current administration and their billionair allies to do whatever they want to control and profit from us.
I am a federal employee and not in a union. I will take the buyout than dealing with constant Musk bullshit but the fear is that may not be followed through. I am from auto industry and there has been many buyouts by companies. When companies offer a buyout they follow through. But trump musk team there is no guarantee. People are worried about saying yes because immediately they might be losing their jobs and get no money. Agency heads seem to have no information it’s totally chaotic.
The President is demanding loyalty to himself and his agenda. His offer of severance is nothing more than a mechanism for ascertaining and assuring loyalty. He views the federal workers as his employees. They are not. They work for the United States of America and by extension all of us. Their duty is to the people and our constitution not any singular Presidency.
Suggesting that federal employees, who in many instances forgo larger salaries for stability and benefits, should “take the money” is misguided. While it may serve the interests of the President, it is not in the interest of the people. We should always strive for a more efficient government. Arbitrarily gutting it is reckless and irresponsible.
” it is not in the interest of the people.”
I can assure you, if I’ve been wanting to quit my government job but have held off due to fear and money reasons, being able to receive a 8 month severance package in terms of salary and benefits is a huge gift. I found away to get mine in 2012 as I wanted out. If I was just granted one, it would have felt like a gift from heaven!
It is in everybody’s best interest to have financial security and have the opportunity to spend time doing something they enjoy. There are plenty of people, perhaps the majority, who are disengaged at work and want to do something new.
What is it that you do?
I would certainly acknowledge that there are people who would jump at the offer of a severance package even within the federal government. But is it in the best interest of the American people to do this? Can we afford having the President applying a loyalty test and making personnel decisions as if the government was Twitter? If a private sector employee decides to take a severance package it likely has no impact on the greater populace. If government employees do so en masse, it’s a different story.
As for me I retired at 57 after a career in corporate finance. I did not request a severance package because I didn’t need one. I worked for a very successful publicly traded corporation which rewarded me with an ample salary, bonuses, and equity compensation over the course of my career.
I retired from the U.S. Forest Service in December 2024. I spent yesterday with a former FS colleague who works in fire and fuels and it was distressing to hear the level of chaos at the agency and then from my former team members. Friday, employees were instructed they were not even to hold virtual team meetings because the powers-that-be do not want them communicating with each other. Lists are being prepared of “probationary employees” who have been on the job two years or less because they can be more easily fired. Electronic devices are being surveilled and my colleague is so afraid she was unwilling to text me her address so I could meet her at her house. The “buyout” process being undertaken is in no way meant to ensure a smooth transition but rather to tear agencies to the ground.
The FS not only manages the land but employees are at the forefront of many critical scientific, technology, and research and development initiatives–they have knowledge and skills that cannot be replaced overnight. Please don’t plan any outings to your national forests and grasslands (and although we don’t care for them, also your National Parks). Remember the stories about the trash and filth at national forests and national parks during the last government shutdown. The ones that have not been sold off to the highest bidder will soon be worse for wear without loving caretakers.
Oh, and let’s not even mention the F word . . . At this point, this administration has instructed Newsome that he’s on his own in fighting wildfires so don’t come looking to the Forest Service for help if another major wildfire breaks out. There’s already a severe wildland firefighter shortage and even when you do have new recruits they will be inexperienced and lack the institutional knowledge and skills that comes from years on the fireline. So go ahead and gut this agency and see what happens. Oh, and having been part of a program that did go through a VERA (Voluntary Early Retirement Authority)/VSIP (Voluntary Early Retirement Authority) process and handling the communications plan surrounding that process, I know how intricate this process is and anyone sending in the words “resign” per the instruction that Musk’s team sent out, is inviting disaster. The maximum amount of money dangled in front of federal employees for VSIP is $25,000. Taking my ending salary, that means Trump is now offering me $97,333 to take a vacation for eights months but with the caveat that in the interim I can retire at anytime??? What do they say about something sounding too good to be true? More likely, in the interim they would have baked up some reason to fire me and then goodby pension and goodbye healthcare. As a civilian you simply have no idea of how government work and it’s about more than money. I grieve for my agency.
I think you are missing a huge point RC is making The “people” RC is talking about are you and me and all Americans. Federal employees keep Americans safe and we just sent offers to every federal employee to please quit. Look up Dr. Francis Kelsey. Would you really want the Dr. Kelsey of today to leave employment with the federal government? I don’t think federal employees are in it for the money. Otherwise they wouldn’t be working there in the first place.
Estimate the percentage of people who will quit. If there is 10% over hiring and inefficiency, and 10% of the people take the buyout, that is an optimization of resources
Your approaching it as if everybody will leave, which is not the case at all.
I’m sorry but this is incredibly short sided and ignores the vital role that many government workers play. I understand the cynicism but do we really want to find out how bad things might be if we lose 10% of our FBI agents, scientists, health inspectors, air traffic controllers? Some of these roles are highly specialized and not easily replaced. Many involve our personal health, welfare, and national security. We lost over a million lives to a pandemic. Do we really want to gut public health because we’re angry that it inconvenienced those of us that survived?
The freedom to choose is good. You can’t force people to work forever, like indentured servants, can you?
How long did you work for the federal government and what was so vital about your role that things would have been negatively impacted if you left before 60-65?
In the private sector, if one person leaves, it’s next man or woman up who takes over the role. And many would argue that the private sector is much more efficient than the government, so one person leaving from a private sector company is more impactful.
Of course no one can be forced to work forever. Taking a severance package is obviously a personal decision that each person has to make.
I never worked for the federal government. I don’t think that you have to be a federal worker to recognize this as bad policy. Here’s but one example of why:
We’ve had a chronic shortage of air traffic controllers. It’s estimated that 80% of our most critical towers are understaffed. It takes about 3 years to become fully trained and only 60% of trainees make the cut. So if we were to lose 10% of our air traffic controllers there is no next man or woman. We’ve made a bad situation much worse.
There are plenty of other examples. What if we lose 10% of our counter terrorism experts? Do you think we can absorb that hit? Do you think think someone can learn that role on the fly? Many of our federal workers have spent a lifetime acquiring skills that our vital to our nation and it’s security. If they and their agencies fail our safety is on the line. I can’t think of any private business where the stakes are this high. Efficiency is critical in private business because the goal is profitability. The government’s goal should be competence, effectiveness, and above all safety. It should not be loyalty to a leader.
Got it. So we should focus on continuously hiring more given more is better? How do we think about costs though and how to best spend taxpayer money?
I understand it’s easy to spend other people’s money, especially if you don’t have to pay a lot of taxes. But I think we should also be disciplined in spending as well, as this is a fundamental part of good personal finances. Thx
I never said we should hire more people. That would be silly and unsupported. It would also deny the reality of government employment as it exists today.
https://www.brookings.edu/articles/is-government-too-big-reflections-on-the-size-and-composition-of-todays-federal-government/
Got it. So what’s the solution to manage spending more efficiently? What do you propose and are you will to pay a higher tax on retirement?
Payroll makes up about 6% of our federal budget. I can’t think of any private business where the percentage is anywhere near that level. In most companies that I worked for it was around 60%.
As far as achieving real spending efficiency, I would focus on the areas that comprise the vast majority of the federal budget. That’s defense, social security, and Medicare/Medicaid. Those programs also drive our debt.
Personally I would focus on reducing defense spending. While I think we could reimagine social security, Medicare/Medicaid, I’ve yet to see a politician who’s willing to risk the political capital to do so. But if we’re serious it should be part of the discussion. If we say that those programs are “off limits” than we aren’t really serious about reducing spending in a meaningful way. Not a popular take but an honest one.
But why put this to a random 10%? You want to keep the good ones. I’m sure not all would take the offer, but man, dangling a supposed carrot in front of a dedicated, talented person doesn’t sound like a great use of our taxpayer dollars. You can cut waste more thoughtfully.
I think a more accurate way to look at your situation is the American people are the stockholders (many have direct experience working with the system) and president is the CEO. This is what the executive branch of government does it makes sure the trains run on time.
The government is not a business. CEO’s can be sued and found personally liable by their shareholders. They don’t have a Supreme Court granting them immunity.
And Amtrak has a lousy on-time record but I wouldn’t attempt to solve the problem by letting the conductors and engineers go.
We need experienced people helping to run the government. The government is a service not a business.
Thank you for sharing the formula on how to think about whether to take a severance package or not. It is so logical and it is the first time I’ve seen it laid out there so clearly.
It’s also fascinating to read how polarizing some of the comments are. I guess some people just can’t help but feel triggered with any mention of politicians or politics.
But if more people can control their emotions and try to approach, dilemmas and problems more rationally, I think they’ll be much richer and happier!
Trump is not going to pay the severance packages. There is no money allocated by Congress for this and will not happen. Trump refuses to pay contractors that work for him all the time. The federal employees should stay and do their jobs and protect the American people from Trump’s worst impulses. Trump breaks things and he is trying to create a new Gilded Age in America.
The Gilded Age was terrible for ordinary Americans the first time and it will be just as bad again. We have to stop doing these things as a country. We need to build a more stable and fair economy for everyone and that will benefit everyone too! Stocks go up with the poor and the middle class are doing well. We need policies that reflect that reality.
The labor union that protects most of these employees have already told them to not respond because it’s illegal and they are already suing over it. This lame idea won’t happen. I would never trust Trump or Musk to make good on their promises…Trump has stiffed countless people and organizations. Good luck suing them for the severance you never got!!! This is the kind of garbage that happens when you have a convicted felon in charge. I love that they want to “Enhance the standards of conduct.” When the leaders have no standards of conduct, it’s absurd to ask the people below them to be held to higher standards. 2 Nazi lovers and psychopaths. This entire administration is a joke and embarrassment.
Trump doesn’t need extra funds allocated from Congress.
It sounds like he’s offering a continuation of their status quo employment (ie continue to get paid for “make believe” work from home) in which they won’t have to return to the office in exchange for an agreed end date in 8 mths.
While it’s true that the govt is not currently funded beyond March and the deal will not be honored if congress doesn’t fund it, this is true in the base case. In other words, if the govt doesn’t get funded, govt employees aren’t going to get paid whether they accept the severance or not.
The problem is that a lot of the agencies are already underfunded. where is the money going to come from? The Forest Service has a nearly $1Billion shortfall–most all agencies do–in large part because congress did not allocate money to cover the 2024 annual pay raise (historically higher than in the recent past at 5.2%) adjustment inflation raise provided to federal employees. There agency imposed a hiring freeze last fall to deal with this even before the current non-sense. Good luck with that.
The issue isn’t the actual payout (separate discussion), the issue is you can’t even legally promise to pay until September funds that haven’t been appropriated past March. The offer isn’t legal.
This offer truly would be a blessing to my family if the payout of the severance package happens. We have a 10month old that will be starting daycare next week and but if we can take this offer we could extend caring for our baby at home until he is 18mos old! We’re sorta in a pickle since my husband has only 4months in his position so he would be first to be let go if there are reductions in force. He really wants to take the severance but I’m nervous about not having guaranteed income. What would you do in this situation?
That’s a tough situation because of the newborn. Do you currently have a full-time job?
From a financial return and math standpoint, him getting eight months of salary of severance after only working there for four months is one of the biggest return on Investments. So the numbers say to take it and run and find a new job, if the buyouts are real.
There is definitely a last in first out tradition when it comes to laying people off.
Yes, I have a full time job as well. I will be going back to work this week. We are taking your advice and waiting until the last minute to make the decision. His leadership is coming out with more information each day and we need the dust to settle before making a decision. We just learned his department is applying for an exception since they technically are considered national security division. So he might not even be allowed to take the offer! So for now we just keep on going like nothing has changed.
Great! Keep your cards hidden until the last minute. Good luck and keep us posted!
Has your husband taken the full 12 weeks of paternity leave yet? If no, this is the time to do it.
Yeah he has already taken it. Our baby was born in April. He will be one in a couple months!
I find this whole situation fascinating. Will the offer hold true or will it not? How many people will be tempted to take the offer but decline out of fear vs how many will jump at the opportunity etc?
There are so many possible outcomes and I think you laid out a very logical and wise approach to considering the terms. Whatever ends up happening, I think it is always great to be as prepared as possible so that one can make as best an optimal decision as possible. I will be closely watching this unfold and wish the affected employees all the best in navigating such an unusual circumstance for the government.
Considering how often trump has stiffed his own contractors and businesses in the past, I’d be very wary of this offer, considering its legality and funding questionability.
The legality of the offer is questionable. However, if I were planning to retire this fall/winter or in January 2026, I would look at the offer hard. To me it is a heads I win, tails you lose proposition for folks in that specific situation. I don’t have to worry. My agency got itself exempted so taking it is not an option for me.
I work for the federal, in Canada. The conservatives will take power and I’m 7 years away from retirement. If they make me an offer, you betcha I’ll take it !
The culture they are aspiring to create and hoping will follow things like Tesla and Google are missing one main component, high pay. People are willing to grind at those jobs and they attract talent based on interesting projects yes, but also six figure and up pay. The average government worker makes under 6 figures. The competitive advantage the government offered to compensate for this was flexible working situations. Expecting private level work ethic at public level pay will never work the way they want. They’ll simply lose the most marketable and valuable employees and either deal with vacancies or whoever they can get to do the job, no matter the quality. And I agree with most others, he can promise anything he wants but comes controls the money and the law no matter how much he wishes it wasn’t so. No one in their right mind should take the layoff offer.
Excellent point Db about lower pay and a lack of upside for raises. So logically, that should change too, with more performance-based incentives.
The one thing federal government employees do have are valuable pensions though. And that’s a nice equalizer, especially for lifetime security, if the employees can work long enough and earn a substantial pension.
But now I wonder whether the pensions will continue to be cut under this new administration. I doubt it, as there would be a huge revolt.
I would wait until the deadline to take the offer if you want it, b/c anything can change between now and then.
It will take some time but pensions will eventually be frozen then eliminated. New employees will get the option of a bigger contribution than currently allowed.
I’m not sure the defined benefit, non-contributory plans exist any longer and so a lucrative pension may not be the glue holding employees to their career. Federal workers I associated with valued their jobs for the flexibility and generous time off, not for the pensions.
Pensions definitely aren’t what they used to be. But it still is valuable if you got one.
The competitiveness of the government vs private industry boiled down to 3 factors: job stability, flexibility and pension.
There is now immediately no job stability or flexibility, leaving only the pension to rival private jobs. But then to vest at even a minimum level takes 5 years of employment. Which factoring in the loss of the previous two benefits means it’s unlikely that most will even qualify for that. They will make sure that most employees that they bother to retain are still released before 5 years while simultaneously working to eliminate pensions the same way the military did. Anyone who fails to see this doesn’t understand the game they’re playing even though they’ve been very clear about it.
How is sneaking in at the end of the deadline going to make any difference if OPM has not promulgated the written rules and regulations that have the effect of law?
There’s no sneaking around. There is an honest conversation about what to do next with your manager, who is also unsure.
DB, I agree with you. I believe what he has put out there…not trustworthy, insensitive, bully, and selfish…I don’t trust “anything” he says…8 mths of pay to sit home…makes no sense in this case. We are “not” talking about 1 or 2 employees but thousands…what is the point of them getting the package and sitting at home? What about the work load…will they actually get paid?
They wouldn’t sit at home. They were just collect their servant package or pay and be free to move on and do something else.
I got a lump sum payment of 33 weeks of salary when I got my severance package. I help transition the team and then I was free to do whatever, even work for a competitor if I wanted to, but I decided to travel and be free.
And as part of my negotiation, I was able to keep 100% of my deferred compensation that kept paying out for five years after I left.
So many employees truly do not understand how much leverage they have and how much they are able to negotiate.
Maybe an article like this one may help: absolute reputational destruction is while negotiating a servant as possible
I agree- the quality of the federal workforce will decline because high talent with transferable skills will leave for more money. I disagree that they haven’t considered this. I think they know this is the future, and welcome it because it fits their narrative that government workers are lazy and bad at their jobs. They will use this narrative to maintain power because “only they can fix it”. When in reality, they worsened it.
Like previous posters, I don’t believe the offer is legal. The President does not have the legal authority to offer 8 months of pay and salaries are funded by the respective gov’t agencies, not OPM. Also, the gov’t is only funded through 3/14 – NOT September.
The thing is, federal government employees must now think and act strategically. It’s free to do to be prepared for whatever may happen.
The biggest fear employees have is bringing up the topic of getting a severance package. Now that it’s open, there’s no greater time to negotiate one!
I’d wait until the final deadline to accept or reject the buyout package, as circumstances could change. The last thing you want is to jump at the offer too soon, only to find out later that the government can’t follow through on its payment.
Negotiating a severance package with Trump and Musk? I doubt it. In the end, we’ll likely have only two choices: resign voluntarily or be forced out.
Most employees feel powerless to negotiate until they learn they do have power, protection, and means. This is how employers can take advantage of employees with asymmetric information.
I’ve seen both sides of the negotiating table. And of course, employees are free to quit with nothing if they want. That’s the beauty of living in a free country. We are all rational in the end.
And if that’s really, the only two options, then the higher probability best move is to take the package and do something new. Elon Musk cut the Twitter workforce by 80%. And Twitter still works fine.
The “buyout” is not legal, nor is it funded. Why bother considering a nonsense offer?
Next, the enhanced standards of conduct mean showing fealty to the FFOTUS (First Felon Of the United States). That is not part of the standards of conduct for any civil servant.
What Elump is attempting to do might work in the business world, but not in government.
Because it’s always good to plan ahead and think about your best course of action when things are presented. The federal government has shown them their cards, now it’s up to you to navigate appropriately, including negotiations.
Employees have more negotiating leverage than they realize.
Are you a federal government employee?
I was a government employee for 30 years and in management for 20. There is no way to negotiate anything for the majority of the employees. There is no leverage.
Sounds like a good run!
In your experience, was it a “take it and like it” type of iron fist ruling? If so, what department were you in and did you leave with a severance or just voluntarily retire with your pension? When did you leave?
Times, they are a changing with the new administration. And the pandemic also change so much about work. I would have loved to have gotten paid to work from home from 2020 – 2024. Those were formidable years for my children.
No, but I worked with civil servants for decades and now, in retirement, know several including relatives.
“…would you take the eight-month severance package offer?”
If it was guaranteed to be paid out, however there are quite a few articles around that indicate that this particular payout isn’t.
Picking one at random, it says:
But it now that the government has revealed its hand and what it wants, the employees have the advantage now. They can mentally decide whether to take or not when the deadline comes (Wait until the end), and pivot if things change.
Everything is negotiable. And how employees, at the moment, know what the floor is. Smart employees who want out will start having open dialogues and cut side deals.
Keep things fluid folks!
Apparently the offer is not a legal one and was not authorized by congress.
I’d love to negotiate a severance. I’m the VP of the business and my wife is the President. Any suggestions?
Kidding aside, I fully agree that this is a fantastic opportunity for a lot of folks. You couldn’t pay me enough to get me in an office 5 days a week. I’m also excited that this is being implemented — I don’t mind folks slacking working for private companies — that’s the company’s problem and not my business. But slacking on the taxpayers dime is another issue, and the amount of job security they’ve had in the past has made slacking even easier. My dad worked road construction for a private company for 40 years. Then he spent his last 10 years of his career at the department of transportation. It was a real eye opener to see how time and money was wasted.
Mike, I would tell your wife to work harder so you can get that severance! Just got to treat her well and make sure the household is taken care of. You can do it!
See this post for strategies: How To Convince Your Spouse To Work Longer So You Can Retire Earlier
I just want to point out that slacking and other employment issues at private companies also costs you so it seems like a double standard. But it all comes down to the framing of the issue and the gullibility of the audience, which these days seems pretty gullible.