Congress just created a new at-will hiring option tied to the Federal Employees Retirement System (FERS), and the federal community's reaction has been largely negative. The timing didn't help — this rolled out right after the 2025 reductions in force (RIFs) and the unprecedented deferred resignation program (DRP), both of which already shook how Feds think about job stability.
Here's the trade: You give up traditional civil service protections in exchange for greater agency flexibility to hire and fire. To offset the loss of job security, some positions come with higher pay bands or enhanced FERS contributions. But those perks aren't guaranteed. What you get depends on the agency and the specific role, so make sure you see it in writing before you sign anything.
Which brings us to the question every Fed needs to answer: Is the trade worth it?
Core Tradeoff: Job Security vs. Compensation
This new hiring path flips the risk-reward setup that federal employment has run on for decades.
The upsides: faster hiring, pay premiums for specialized skills, and possibly higher Thrift Savings Plan (TSP) agency contributions or other add-ons. For certain skill sets, the package can look attractive.
The downsides: easier separation or termination, fewer appeal rights, and more income volatility when downturns or reorganizations hit. If you count on predictability, this is a real shift. When weighing federal at-will jobs pros and cons, higher pay or better retirement contributions mean you're shouldering more career risk.
This is where the FERS at-will hiring retirement impact hits. It changes how stable your long-term plan feels.
Retirement Math Under At-Will
Before you take an at-will role, figure out how the retirement benefits work.
Start with the FERS basic annuity. Make sure the accrual rates, high-3 salary calculation, unused sick leave credit, and eligibility rules are the same as those for standard FERS. The high-5 average salary change didn't pass, but double-check what applies to your job anyway.
Your TSP deferral limits stay the same because the law sets them. The agency match and any extra employer contributions can change. Some at-will jobs come with more, others don't. Over time, that makes a difference.
You also need to confirm that Federal Employees Health Benefits (FEHB), Federal Employees' Group Life Insurance (FEGLI), and survivor benefits still cover you. Check if the five-year participation rule for retirement applies. Get it in writing and don't assume your coverage carries over.
The FERS at-will hiring retirement impact isn't about headlines. It's about these details.
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Cash-Flow and Risk Management
Higher pay doesn't mean more financial security if your income becomes less stable.
If you're taking an at-will job, build a bigger emergency fund than the standard three to six months. A larger cushion helps if you lose your job suddenly and keeps you from making rushed decisions.
Keep your debt low and your fixed costs flexible. Long-term obligations with no wiggle room make uncertainty a lot more stressful.
Also, look at disability coverage and life insurance outside what your employer offers, especially if those benefits don't travel with you. Employer benefits shouldn't be your only safety net when job security changes.
Taxes and Timing Considerations
Higher pay can mess with your taxes in ways you might not see coming.
A bigger salary could bump you into a higher tax bracket, trigger Medicare Income-Related Monthly Adjustment Amount (IRMAA) charges down the line, and shrink what you're actually able to save. Plan for it now so you're not caught off guard.
If your pay includes variable bonuses or incentives, automate your TSP contributions. That way, you keep saving even when cash is tight.
When evaluating federal at-will jobs pros and cons, think about tax efficiency up front, not later.
Decision Framework
When we walk Feds through this decision, we encourage a structured approach:
- Mission and role fit.Does the opportunity align with your skills, interests, and tolerance for change, given the learning curve and separation risk?
- Total compensation today versus long-term value.Compare salary, benefits, and TSP support against the pension and compounded savings you might build by staying in a traditional role.
- Exit optionality.Consider how easily you could return to competitive service or transition to the private sector if circumstances change.
This framework keeps emotion from driving a decision that has long-term consequences.
Balancing Opportunity With Stability
The at-will path might boost your pay in the short term, but it comes with real career and income risks. If you have in-demand skills and a solid financial cushion, the trade might work. If you don't, losing traditional protections could cost you more than you gain.
Do your homework. Get the exact benefits in writing, run the numbers on your pension and Thrift Savings Plan (TSP), and see if this actually works for your long-term plan.
If you need help running the numbers, reach out to us at Serving Those Who Serve at [email protected]. We'll help you figure out if this makes sense for you, not just on paper.
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
