1) How will a buyout benefit my long-term financial plan?
For most people, Stein said, a buyout could hurt. “If you were thinking of retiring in a month or three months, maybe a buyout would leave you better off. But if you’re a [Federal Employees Retirement System] employee, it’s just unlikely to do so.”
But long-time Civil Service Retirement System employees might benefit from buyouts, Stein said, “because when they retire, their annuity is going to pick up … 75 or 80 percent of what they were receiving in pay. … And for a lot of people, a $25,000 buyout could be as much as they are losing from retiring early. And for many people it will be more.”
Buyouts might also help federal employees taking jobs in the private sector, Stein said.
“Then the amount that you’re losing by retiring early is much smaller because you’re not going from working for the federal government … to not earning anything but your annuity.”
2) How will retiring early change the way I feel?
“A key part of how good you’re going to feel in retirement is how financially secure you are,” Stein said. “What it says to me is, ‘do some financial planning.’ Can you afford to take a buyout? Could you afford to retire now? How much risk are you taking on?”
3) How much will quitting now cost me in the long-term?