Don’t Lose What You’ve Earned: Protecting Pay, Benefits & Retirement After a Federal Layoff
Financial & Benefits Protection Focus
Key things most feds lose because they don’t act fast:
Back Pay Rights
During a shutdown furlough (not RIF), you are almost always entitled to retroactive pay once the budget is passed. During a true RIF, you usually are NOT. Know the difference — your notice letter will say “furlough” or “separation/RIF.”
Health Insurance (FEHB) You have 61 days after separation to decide on Temporary Continuation of Coverage (TCC) — 18 months, you pay 100% + 2% admin fee. If you’re RIF’d with 5+ years, you may keep FEHB into retirement later with no break.
Thrift Savings Plan (TSP) Loans become due immediately upon separation. Withdrawals before 59½ trigger 10% penalty unless you qualify for an exception. Consider rolling to an IRA instead of cashing out.
Severance Pay If RIF’d (not furloughed), you may be eligible for severance: 1 week pay per year of service (2 weeks if over 40). It’s taxable and offsets unemployment.
Unemployment Insurance Federal employees qualify in almost every state during shutdowns. Average benefit is ~40–50% of your basic pay, tax-free if you elect.
Don’t Lose What You’ve Earned: Protecting Pay, Benefits & Retirement After a Federal Layoff
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