VERA & VSIP Early-Out Evaluator

What is VERA?

VERA — Voluntary Early Retirement Authority — is a special OPM-authorized window that allows federal agencies to offer early retirement to employees who would not yet qualify for an immediate unreduced annuity under normal FERS rules. It is a powerful tool for workforce reshaping during agency reorganizations and reductions in force (RIF).

The key point: VERA only exists when your specific agency has active OPM authorization. It is not a standing right. If your agency does not have a current VERA authorization, early retirement is simply not available regardless of your age or service.

VERA eligibility rules

During an authorized window, you qualify for VERA if you meet either of two service criteria:

• Age 50 with 20 or more years of creditable FERS civilian service, or
• Any age with 25 or more years of creditable FERS civilian service.

Notably, VERA annuities carry no age reduction. Under normal MRA+10 rules, retiring before age 62 triggers a 5% per year reduction. Under VERA, that penalty does not apply — you receive the full 1% × years × High-3 formula as though you had retired at a standard unreduced age.

What is VSIP (the buyout)?

VSIP — Voluntary Separation Incentive Pay — is a cash buyout an agency may offer alongside VERA to further encourage voluntary departures. The statutory maximum is $25,000 regardless of what the agency might offer. VSIP is fully taxable as ordinary income in the year received, with OPM typically withholding at the 22% federal supplemental rate plus FICA. Your actual after-tax amount depends on your total year income.

Repayment rule: If you accept VSIP and then return to federal employment within five years (including through a non-appropriated fund position or a personal services contract), you generally must repay the full gross VSIP amount before being reemployed.

The supplement timing under VERA

The FERS Annuity Supplement (SRS) bridges the gap between your retirement date and age 62, approximating what Social Security would pay if you had retired at 62. Under a standard immediate retirement, the supplement begins at your retirement date if you are already at or past your MRA.

Under VERA, the supplement does not start at separation — it starts when you reach your MRA. If you separate at 48 under VERA (via the any-age/25-year rule) and your MRA is 57, you will receive no supplement for nine years, then receive it from MRA until age 62. Plan your income bridge accordingly.

Keeping FEHB after VERA

FEHB (Federal Employees Health Benefits) can be carried into retirement under VERA provided you were enrolled for the five years immediately before your separation (or since you first became eligible) and you are retiring on an immediate annuity — which VERA qualifies as. Retirees pay the same enrollee share as active employees.