The fact that Congress has been asked to authorize $40,000 buyouts for the Defense Department doesn’t mean they are going to be approved this year.

Or next year.

Or ever.

And IF the Pentagon gets the nod to boost maximum buyout payments from $25,000 to $40,000, there is no guarantee the option would be extended to other agencies. This a long shot with a capital “L”. But …

If the administration wants to downsize Defense and other agencies (which it has proposed), and if Congress wants to trim the payroll, buyouts are the magic button. Our website here at Federal News Radio has been near meltdown since we asked people if $40,000 would be enough to tempt them into regular or early retirement. Wham, Bam! Short answer: Nine out of 10 respondents said they would go in a heartbeat. So many in fact that the ripple effect, the people we didn’t hear from but who may feel the same, could jumpstart that Retirement tsunami experts have been predicting for years.

That long-time employees would jump at a $40K buyout isn’t surprising. But what’s especially interesting is the thinking of people who either said $40K isn’t enough, or that working longer makes more financial sense.

Katherine C., from the VA, spoke for many when she wrote: “Already fully retirement eligible with over 33 years. Just waiting for the ‘magic numbers’ to align. $40K would do the trick!”

Another VA employee, Brenda B., said, “Give me the paper to sign and I will be gone! I’ve been here since dinosaurs roamed the Earth!”

For Greta J., of the Navy, timing is everything. “I’m set to retire in September and would love to get a $40K buyout. That is the one thing that would get me to stay for a few more months if necessary. I would not stay the extra time for $25K. You end up with about $17,000 after tax and I don’t find that worthwhile.”

A number of readers agreed with Mac of the IRS, who said, “Regardless of the size of the buyout it shouldn’t be the primary reason you retire. The bottom line is if you are in a financial situation where you desperately need the money from the buyout, regardless of the amount, you should NOT retire. You should not quit your daytime job.”

Michael K. said buyouts are a bad financial move. “Wouldn’t take the $40K buyout — it’s replacing long-term income with a short-term blast, except the $40K would never be invested to accomplish or exceed the same steady income goal. Probably buy a car or boat with it.”

A number of readers said that even boosting the buyout to $40K isn’t enough. They said that many private-sector buyouts are bigger and better. One suggested that the buyout be a minimum of one year’s salary PLUS a one-year “time in service’”credit. To that, Jim from Agriculture said: “That sounds a lot like industry — fairly common practice once upon a time to get those with 20+ years to consider retirement. In fact, one such offer was 2 + 2 (two years salary plus two years time in service). I had a colleague who made out quite well on that one. That ain’t gonna happen in government!”

Agreed. Also, a little something about those legendary private sector buyouts of old:

I worked at a place where they offered very generous buyouts (two years’ pay) to long-service employees. The kicker was that the pension benefit wasn’t as high as for a federal employee at the same salary level and the pension was frozen. No COLAs, ever. So, if you retired on $500 a month in 2002, your monthly pension in 2016 (and in 2030 if you live long enough) will still be getting $500 per month.

Nearly Useless Factoid

By Michael O’Connell

It took Norman Larsen, founder of the Rocket Chemical Company, 40 attempts to create the formula for WD-40 penetrating oil.  The name of the product is an abbreviation of its full name: Water Displacement, 40th formula.

Source: Wikipedia

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