The news surrounding federal layoffs is unsettling, leaving many employees uncertain about what comes next. If you’re feeling concerned about your job security, you’re not alone. Major shifts in the federal workforce can be overwhelming, but with the right information and strategies, you can take proactive steps to safeguard your financial future.
Why Are Federal Layoffs Happening?
The federal workforce is experiencing significant changes due to budget reductions, workforce restructuring, and a shift toward modernization. Recent reports indicate that the Trump administration may require agencies to submit layoff plans by March 13, 2025, as part of an initiative to cut costs and streamline operations.
While these changes may feel abrupt, they are part of a broader restructuring of government agencies. Unfortunately, workforce reductions have occurred in past administrations during similar cost-cutting measures.
Steps to Protect Your Financial Future
While you may not be able to control these workforce changes, you can take proactive steps to strengthen your financial security:
- Stay Informed: Regularly check official communications from your agency regarding layoff plans, severance options, and career transition resources.
- Understand Your Rights: Federal employees impacted by a reduction in force (RIF) have rights, including potential severance pay, priority placement in programs, and extended benefits. Review OPM guidelines to understand your options.
- Update Your Resume and Skills: Consider refreshing your resume and acquiring new skills to broaden your career opportunities. The federal government and private sector offer transition assistance programs that could help you.
- Review Your Finances: Assess your financial situation, build an emergency fund, and look for areas where you can reduce discretionary spending to prepare for potential income changes.
Managing Your Thrift Savings Plan (TSP)
If you separate from federal service, you may still have options regarding your Thrift Savings Plan (TSP). Here’s what you should consider:
- Retaining your TSP Account: You can leave your funds in the TSP, though you may need to adjust your investment allocations based on your risk tolerance and retirement timeline.
- Rolling Over to Another Retirement Plan: You have the option to roll your TSP funds into an IRA or another qualified retirement plan.
- Handling Outstanding Loans: If you have a TSP loan, you may need to repay it within a specific time frame. Otherwise, unpaid balances could be classified as taxable distributions.
You’re Not Alone – We’re Here to Help
Job uncertainty is never easy, but you don’t have to navigate it alone. Whether you need guidance on managing your TSP, evaluating your benefits, or adjusting your financial strategy, our team of financial advisors may be able to help you. You can schedule a consultation using the link below.
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Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.