Scale Of Trump ‘buyout’ Plan Means Opportunity For Advisors

A million federal employees are facing buyout offers, and most have no idea what to do next. With Trump’s administration’s buyout offer on the table, there are still questions around what the next steps are and what this “deferred resignation” will lead to.

John Troncoso, partner and investment advisor at Jaffe Tilchin Wealth Management, said that the repercussion on people seeking financial advice from his peers could be significant.

“This offer has been sent out to a million-plus people,” he said. “That’d be the equivalent of Walmart or Amazon laying off nearly their entire workforce. The scale of it is pretty amazing when you think about it, and that's why I think it's gotten so much attention. Because it impacts such a wide percentage of the population.”

And for financial advisors, this is more than just another round of voluntary separations. This is a once-in-a-generation opportunity to guide clients through the most significant financial decision of their lives—and in the process, capture long-term business, expand services, and establish a reputation as the go-to expert for federal retirement planning. The question isn’t whether federal employees need financial guidance, it’s which advisors will step up and provide it? 

Most federal employees don’t have a financial plan. They’re overwhelmed. They don’t even know where to start.

“All of my clients have one,” Troncoso says. “But I think most folks are coming from a place of: 'Wow, I know this is going to affect me, but I can't even begin to think of whether this is a good thing or a bad thing, because I don't know how it fits in conjunction with the rest of my finances.'”

For advisors, that’s the opening. These employees need help answering the most fundamental questions: Is this buyout good for me or bad for me? What does it mean for my future cash flow? What does it mean for my retirement? Am I going to be able to meet my goals? 

Troncoso puts it bluntly: “At the end of the day, isn’t the biggest concern for most people how much they can comfortably spend in retirement? Will I be able to meet my financial goals? If I retire now and accept a buyout offer, will that impact my ability to achieve them? Will I need to cut back on vacations, or could this be a positive move?”

Advisors who can help clients map out their financial future in the face of uncertainty will not only land business today but build relationships that last for decades. 

Many federal employees assume they can just find work elsewhere if they take the buyout. But in reality, they could be walking straight into a saturated job market.

Troncoso said: “I recently spoke with a client who shared: ‘Under normal circumstances, I’m confident that if I retired, I could easily find part-time work elsewhere. However, with the potential influx of federal workers into the job market, I’m not as sure about that.”

For advisors, this means creating financial strategies that don’t rely on future employment. Buyout recipients need to know if they can sustain their current lifestyle without another paycheck. If they can’t, what adjustments need to be made? 

This is where advisors can add massive value — stress-testing retirement income scenarios, structuring withdrawals from Thrift Savings Plans (TSP), optimizing pensions, and building contingency plans for unexpected employment gaps. Clients aren’t thinking about these risks. Advisors should be. 

Many federal employees don’t understand how their pensions are calculated, and the math isn’t always linear. Working just a little longer can dramatically increase retirement benefits.

Troncosco explained: “The key consideration here is whether you've optimized the income multipliers effectively. Are you potentially leaving money on the table by retiring in, say, eight months instead of working an additional 18 months? The scales don’t follow a simple linear pattern, so there’s a lot more to it. The relationship between time worked and retirement benefits isn’t proportional. For example, you could increase your multiplier from 1.5x to 1.75x simply by working an extra day or two.”

That difference compounds over decades. Advisors need to walk clients through the trade-offs: Take the buyout now and risk a lower pension? Or work a little longer and lock in a significantly higher retirement income? Many don’t even realize they have that choice. 

Government jobs are stable. Buyouts change that overnight.

“There’s a certain level of uncertainty, particularly when working with the government. It used to be that unless something was seriously mishandled, the income flow was fairly stable and secure. Now, however, you’d be trading that stability for a buyout, and there’s no guarantee the private sector will offer the same opportunities. Additionally, you can’t be sure that, in the event of the next recession, you won’t be among the first to be let go.”

For advisors, the conversation isn’t just about money—it’s about risk. Is this client financially prepared to take on that uncertainty? Do they have enough assets to ride out market downturns? Are their investments structured to provide stable income? 

Helping clients shift from a government salary to a self-sustaining financial strategy is where advisors can make a real difference. 

Beyond just retirement savings, federal employees have access to powerful financial tools that many fail to optimize. The most common mistake? Not fully leveraging employer-matching contributions.  

“I think all too often, there's a short supply of folks who actually have those numbers in front of them to say, hey, under column A, I can do this. Under column B, I can do that. Which one makes me happier?” 

Advisors who can answer that question—and show clients a clear path forward—will dominate this market.