Business Innovators Radio - Money Pryor-ities with Darryl & Alicia Pryor EP #3- Navigating the Deferred Resignation Offer with Cassie Graves – Part 2

Episode Date: June 26, 2025

In this episode, we delve into the complexities of the deferred resignation offer for federal employees, exploring its implications, risks, and the various retirement options available. Cassie Graves, CEO of FedOptions, provides expert insights on navigating these unprecedented changes, emphasizing the importance of understanding benefits and making informed decisions. The conversation covers the nuances of deferred resignations versus retirements, the significance of MRA, and the need for careful planning to ensure financial stability during transitions.  As CEO of Fed Options, I explain the complicated world of federal employee benefits to financial advisors so the benefit choices are easily understood by employees.  I have spent over 15 years in the insurance industry with 10+ years being focused in the federal benefits arena. As a former spouse of a federal employee, I had first-hand experience of the lack of knowledge that employees and their spouse have around the federal employee benefits. After taking my first federal benefits class for professionals in 2014, I made it my mission to educate employees and their spouses about their complexities and challenges they have with their federal benefits; so that they don’t have to face the rude awakening that some of my family and friends faced when it came to the retirement planning process.  My position has changed through the years though. Originally, I began helping federal employees directly as an independent insurance representative, then after a couple of years I began helping financial professionals all over the country. This shift was one of the best life changing decisions I made. While still serving my original mission of educating employees and their spouses, I get to have an even larger impact by helping professionals understand the challenges, complexities, and possible solutions that assist employees, and their spouses have a better retirement future. With Fed Options, we provide a variety of services, resources, and tools that increase service, trust, and credibility with the federal employee community saving financial professionals time, money and energy of having to be the federal benefits guru. This helps them to be able to stay the master of the solution!Money Pryor-itieshttps://businessinnovatorsradio.com/money-pryor-ities/Source: https://businessinnovatorsradio.com/money-pryor-ities-with-darryl-alicia-pryor-ep-3-retirement-planning-for-government-workers-with-cassie-graves-part-2

Money Priorities with the husband and wife team of Daryl and Alicia Pryor, principles of DNA financial and associates. You'll get tips and techniques on personal finance, insurance, and tax topics aimed at closing the wealth gap. So if you want to be a player in the financial game, you're in the right place. Now, money priorities with Daryl and Alicia Pryor. We have a very special episode today because we are tackling a huge development in the world. of federal employment, the deferred resignation offer. This is an important topic that can affect thousands of federal employees. Absolutely, you know, we're getting, we're fielding phone calls

from a lot of different people trying to make sense of it all. And we're excited to welcome a true expert in this field. Cassie Greas, she's a strategic partner of ours. Cassie is a CEO of Fed Option. Cassie, thank you for joining us today. And tell us what's going on in your work. Thank you so much, Darrell and Alicia, for having me all. today. I really appreciate the time because these are unprecedented times and employees, federal employees specifically, are faced with something that has never been anything that's been offered before, right? And so I'm Cassie Graves and again, I'm the CEO of Fed Options. We provide support services for financial professionals out there serving the federal

employee community because we want them to understand where federal employees are starting from when it comes to their benefits so they can help make a plan into the future. I've been doing this for a little bit. Let's see, insurance. I've been in the insurance industry for 16 years now and specifically working strategically with federal employees for 11 years. So maybe in different capacities. At first, I started working directly with federal employees and then branched out to

working with the professionals because that has allowed me to exponentially make sure that federal employees get the canad device that they need to, to get and start with a basis of knowledge in that retirement planning process. Absolutely outstanding. That's why you're a strategic partner of ours. And I want to start with some basics, but I just want you to understand we're here and I want people to understand that we're here in the national capital region. You know, we're in D.C.

The hub of government employees. So we're experiencing calls and emails and everything else with people with a lot of anxieties just trying to figure out what is it and what can they do. So can you explain? what the deferred resignation offer is and who's eligible for it. Absolutely. So this, again, is something that a term that federal employees haven't experienced before. A deferred resignation is not a deferred retirement.

I want to make that very clear. And there's no buyout option. I've been hearing that a lot too in the sources that I've been seeing. And this is not a buyout, right? There's no monetary value to it unless your agency is actually going to allow you to stay on that admin leave from February 6th till September 30th. And so this offer is simply an offer for federal employees to delay resigning or delay leaving the federal government. Obviously, there's been promises in the letter about pension accrual and pay and benefits being able to

continue. However, I think there's certain realities that we have to take into consideration that simply may not be true with that. In what employees have received and what the expectation is, is that they will simply let the government know by February 6th if they are going to take advantage of the deferred resignation offer. And then with that, they are not expected to work at the full capacity. Rather, they'll be on mostly an admin leave until September 30th.

when that leave resignation date rather is. And so then they will not have employment with the government after September 30th of this year. Wow. That's a lot to kind of chew on there and consider. Would you think that or do you think that there are any risk to consider as well with this deferred resignation? Great question, Alicia. Absolutely. Because, you know, who's to say that the admin leave will be guaranteed between February

and September right now we're in a continuing resolution and that's only good until March 14th. And so there's no guarantee that the budget will allow for people to stay in a paid capacity all the way until September 30th. The other caveat is what does your agency say? I have gotten emails and phone calls from financial professionals with all kinds of misinformation that people, are getting from their higher-ups. And so, you know, there is some level of choice and things like that that agencies have. But again, they have to stay in certain parameters, just like, you know, this letter. And so is this a legal offer that's been another concern out there?

You know, so far from the research that we've done, the offer is valid. But again, I'm not a legal expert. I'm not an attorney, so don't quote me on. That it be as unicated somewhere else. Yeah, just based on the years of experience and what have you that, you know, and listen, the president's redefining certain terms, right? Admen leave was just redefined. And so now we have to look at these kind of granular pieces and kind of get into the weeds of

things that we haven't been, haven't had to do previously. And so that's another question. will is it even legal with the new admin rules to have it extended for that period of time because that's not currently how it works. So we don't know these different pieces and these are I think the risks and quite quite honestly those realities that employees have to look at. Take the emotion out of it and look at the real come to Jesus

moments if you wanted with what on with right? Well, I'm glad you mentioned one thing about take the emotion out of it. Again, we're getting a lot of calls from people from a very broad career range. And so one of the things we want to make sure we're able to do is put people's mind at ease no matter where they are. But how should employees who are near, well, I mean, nowhere near retirement, how should they approach this thing, really? Because, again, there's so much, there's already a complex system that they're involved in. Now we add a little chaos, and then it gets real emotional for a lot of people. And that's when people make mistakes. And so what we want to do is

kind of demystify some of those things. And we're glad to have you here today to answer those questions. But a person who's nowhere near retirement, how should they approach it? Great question. Generally, I would say don't take the offer. Because if you take the offer, then you're simply leaving service and you're not going to be able to continue your benefits if you leave service and you haven't met the basic age and service year requirements to be eligible for even an early retirement, right? So that's another thing that people are really getting hung up on, which I want to make clear on, is deferred resignation means you are resigning from service. You are not retiring necessarily. So you have an option to look for another position and do all of these other things.

If you know that your position isn't solid enough to keep, you know, you can do that. But it is similar in the deferred retirement, whereas if you do leave service, you will not be eligible to continue your benefits past September 3rd, and eventually you will be able to pick up a pension if you don't come back to federal service. However, if you do, you don't reply to the email, right? You say, no, thanks, I'm not resigning. There's a possibility of a discontinued service retirement or a voluntary early retirement or Vira being offered, which means at that point, that's kind of a better situation for some employees because it lessens the age and service year requirements for somebody to be able to retire.

So they may be able to then retire from government service and keep their benefits that may rely on, especially that health benefit and possibly the life insurance, depending on what that looks like for that individual. Okay, well, for this situation in particular, it seems like there's only a couple of options that they have. You know, I've heard talk about the MRA 10 and the deferred retire. Can you talk? I know you talked a little bit about the deferred retirement, but can you kind of elaborate a little bit more on those two? Yeah, so great question.

The deferred retirement is when somebody does not meet their MRA. They haven't met that minimum retirement age, which is anywhere between age 55 to 57, depending on your year of birth. and you don't have the minimum requirement of years of service to even think about an early retirement, which has a different set of options, right? So deferred retirement is you have not met any age or service year requirements. Therefore, you just leave. Say you have at least five years vested in the FERS program. You can take a pension later, but you don't get any of those other benefits.

Now, an MRA plus 10 scenario, that's when somebody is eligible for an early retirement. And that kind of changes the game because if you are eligible for an early retirement, what does that look like for your numbers, right? And you have a couple of different options. And these are, again, for folks who have met their minimum retirement age and have at least 10 years of service. And five years of that service being invested in the first program, right? That's pretty key because some people who have had, say, four years in government service

and six years of military service won't qualify. for this. You have to have at least five years vested in the first program to qualify for any of the pension and other benefits in retirement. So I want to make that very clear. However, if you have six years as a federal employee and four years of military service that you've made a deposit for, that can count towards that whole 10-year period. Okay, so it's 10 years of creditable service and at least five years of contributing to the first program. And again, you have to meet your MRI. And if you have all of those things true, then what will happen is you're eligible for an immediate pension or a postponed retirement pension. What that means is if you take your pension immediately, you'll have a reduction or penalty to your pension. That reduction or penalty is 512 to 1% for each mug. You are under the age of 62 or about 5% per year. So if we have a scenario where somebody's age 59 with 20 years of service and they decide that they want to retire and take a pension immediately, they will have a 15% reduction to that pension benefit. However, they'll be able to keep their Fagley and their health benefits as soon as they take that a pension, which is immediately, right?

So there will be no gap or loss of coverage for any period of time. however, if somebody takes a pension benefit or a postponed pension benefit or a postponed retirement, then the employee can wait to avoid or lessen that reduction, but they also wait to get their family and FBHB benefit until they begin their pension. So that might feel like a little bit of a penalty, right? because they have to have a plan for that time on what's going to happen if they need that life insurance, where is it coming from? If they need the health benefit program, are they able to hook up on their spouses program or do they buy into the market? What does that look like for that person? And so these are

the other considerations that we have to look at if somebody is eligible for an early retirement benefit. But I think furthermore, we have to look at is there any other service time, whether it's military service, or maybe some non-dedduction service time or a redeposit service time, so they had a break-in service and they took their funds with them. Can they simply make a deposit or redeposit for other service that may be creditable to get them to that fully eligible point? Okay. Wow.

That's a lot of information. Go ahead, Alicia. That's a lot. I was just thinking about that gap, you know, the necessity to bridge that gap. If they have to wait and delay and receiving the full benefit, the necessity to ensure that they have something to cover them and the in-between time while they're waiting. That's going to be quite important to ensure they have something to bridge that gap during that time. You know, especially those who are considering retiring a little bit early. It's like

waiting, you know, financial stability now versus, you know, what you want in your future retirement plan, the income that you want. And so, you know, we have a class of individuals who are just at this point right now. They're ready to retire now. But before I said, mention that, I did want to interjected, we happen to be in an area, so we're going to have to do another podcast possibly because we have military, we have government civilians, and then we have a lot of people who have gone back and support the government as contractors. It doesn't impact their government retirement as much unless you look at it from a holistic picture. And one of the things that we're excited about our partnership with you is that we can work with our clients now so they can

see how the military and the government pension fits in with some of the other streams of income that they may have. I'm really excited about it. You have a wealth of information. But for those who are ready to retire now, do you have any recommendations or anything that we should be concerned about? Absolutely. Great question. And yes, I think there's also many considerations for those who are looking at the possibility

of retiring, right? And say, like I've had several advisors. And I think this is most of where the phone call. are coming in from are from the people who are ready to retire, right? And they don't know, do I keep my retirement date? Do I take this offer? What does that look like for me? And do I delay my retirement? What does that look like? And so a couple of different things to consider, right? I can't tell you what to do in any given situation. That's not my position. What does that look like, right? So, I would say to that, go and take the resignation, but plan for the worst.

case scenario, right? When the beginning of this, we looked at what are those risk factors? You know, what happens if your admin leave stops for whatever reason? You know, are you prepared to turn in your paperwork at that time? Those are things that we need to be looking at. So I would say, go on and push the button if you're already planning on retirement. You can turn in your retirement paperwork in the middle of this time and it will trump the resignation, which means you won't have till September 30th. You'll have whatever date you plan on retirement and then that's when everything starts, right? Well, assuming you're going to retire at the end of the month, then your pension will be out and accruing at the first of the following months for most first

employees and for CSRS, they have a little bit of a different strategy. But if you're planning on retiring at the end of the month, that's what that will look like. If you are planning in the middle of the month, just know that you're not going to have any pay or benefit accrual for that time period from whatever date that is till the end of the month or the, I'm sorry, the first of the following month when your pension begins accruing. So that's something to consider. You know, I've heard of agencies not willing to let people continue on benefits and pay and all of this. I've heard where they're going to take leave away. Legally, they can't do that. If you recruit it and he worked all this time, they can't take that leave away. But, you know, one of the things that I do want

to caution people is if you're going to retire now and you're going to say, okay, I'll defer, think about maybe not waiting until September 30th to turn in that retirement people because how many other people will be doing the same thing? And we have to look at who are federal employees. OPM has been having a high turnover rate and they're shortstopped, right? it typically takes about three to four months on a low end for retirement paperwork to be adjudicated. How much longer will it take if you wait until September 30th and everybody else is doing the same thing? Absolutely.

Wow. Right? So I want to caution people to plan for rather than for, you know, that three months to four months period, pushed out six months to possibly even 12 months for your paperwork to be adjudicated properly. And we also want to make sure, though, that they're planning for retirement during that time, right? So make sure that you have your retirement application package healthy. That means make sure that all the eyes are dotted and the T's are crossed and all the additional paperwork is in there and that you don't have any issues when it does get to OPM, right?

And so this is one of the services that we offer with our advisors is that retirement application review to make sure that things are in good order. and I will tell you most of the time, I've worked with hundreds of these retirement applications now, and there's about 90% of them that have something missing or wrong with them to where we want to make sure, again, that that application package is healthy. It's in good order. So that way,

it lessens that adjudication process with OPM. Okay. Some more wonderful points that you bought there. So under this program, it's pretty straightforward. You just reply, resign if you're ready to retire now and you know that you're ready to resign. But I think once you do that email, is it locked in? I mean, once you do that email, respond to that email, it's locked in, right?

Question. So, yes, they take that as the approval, right? Because it says reply to this email with resign in the body of the email, and that will act as your approval. However, you can also choose to rescind that order at any time during this period. However, that is subject to the agency's discretion on whether or not they will approve that resision. Right. So if you are fully ready to retire and you want to consider this, I mean, I think this is a really good opportunity for those who have been put on remote work. so maybe we are eligible to retire and just didn't decide to retire because they're able to work from the comfort of their own home and everything else.

This might be the straw that breaks the camel's back for them, but they say, I'm done, right? And so I have a sneaking suspicion that this is kind of for those types of people. I'm not saying that's the only reason why this is happening. General consensus. Right? But if you can retire and you've been waiting to retire, why not pull the plug? I will say those who have a planned retirement date, they'll pass the September 30th date, say November 30th or the end of the year. And this might be because you're meaning to be eligible for, you know, to meet a certain age or service your requirement or possibly even to get that extra 10% bump in your pension, right? maybe you're waiting until that 62 mark because you'll have that 20 years and you're going to

get that bump in your pension and it's going to significantly impact you financially. There are special exceptions that your agency can make if you make that request. And so check with your agency and see if they're willing to work with you on that front. Otherwise, don't take the resignation, right? Because we don't want to have anybody in a position where they're eligible to retire after the September 3rd. 30th date, but now they've resigned and their SOL on their benefits, right? If you are, are at any point questioning what you should do because you're eligible past that September 30th,

I would sincerely, sincerely talk with your HR department. If they're wishy-washy, don't take the offer. Only take the resignation offer if I think if you're in that retirement planning phase. You're pretty, pretty certain about it. Yeah. Yeah. That's good advice. Good advice. This has been Very informative, very informative, really kind of pull the wool off all the questions and kind of expose a lot of things for consideration. So we thank you so much, Cassie, for being with us. But before we wrap up, do you have any final words of advice for the federal employees navigating this decision? Just take the emotion out of it and really look at your numbers. Again, like I said at the beginning, you have to know where you're starting from to make a

plan for your future. And with federal employees, the start point is your pension and your benefits. What does that look like? And so I think, you know, just getting real with yourself and having serious conversations about the realities of what these times look like for you and your different options, you know, getting in touch with a financial professional who's going to be able to help you because I will tell you what, OPM and HR are overrun right now with trying to get people to get information, get clarity on these things. And so as soon as we give the information, we're giving it to the advisors, right? So you guys have this information as much as anybody else. You know, we're making sure that you guys have it from the source, from OPM, directly what's

happening, what's not happening. But I'll tell you what, I try to call OPM the other morning. And they pretty much were like, we have so many calls, you can try again later. And I expect that they'll continue to have that message for some time. So good luck trying to get a hold of them for answers, right? And if they're having, they're probably having HR departments, get in touch with them. I even tried to call the director himself and they kind of redirect you back to the same 800 numbers. So, you know, this is what's happening, you know, with trying to get answers.

So the person to contact, unfortunately, are your higher ups, your supervisor, your HR. but make sure again that that information is solid. Look on OPM.gov if you can and if you have a hard time navigating it, again, we're putting out content to our advisors. They'll be able to direct you to the most recent information, the links that we have and everything else regarding this, because you can get lost in the weeds of certain things as well. And we just want to make sure that people have what they need to, again, make that plan.

So good luck to everybody. I hope that this was helpful. and we're with you guys. We're here to help. It's been extremely helpful. One of the things that we have at our firm, DNA, financial and associates, is that no individuals is a cookie cutter approach when it comes to finances. You know, each DNA, financial DNA is separate. So what we recognize from the calls that we're getting,

we know that this is a major financial decision and career choice. And so we, you know, we recommend that you, again, reach out to OPM, or just, you know, give us a call. We can answer some questions and make sure that we get the answers that they need because we have a wonderful strategic partner in FedOps. Absolutely. Absolutely. There is definitely no cookie cutter approach.

And we want to make sure that everyone is comfortable and more importantly informed because information is power. And then you want to make sure that you're making the right decisions that it relates to your finances, your situation, your retirement, your options, your decisions. Absolutely. So thank you so much, Cassie, for what you bring to the table. We're so excited about this partnership and what we can bring to the community. Thank you, guys.

You have a great day. Absolutely. So with that said, see you next time. Money Priorities with Daryl and Alicia Pryor. Make sure to like and subscribe for more tips and techniques on personal finance, insurance, and tax topics aimed at closing the wealth gap and making you a player in the financial game. Visit dna financial associates.com for more information