Washington, D.C. — The Trump administration’s sweeping reorganization efforts have hit a legal wall—but the real impact may be quietly unfolding far from the courtrooms.
While a federal injunction currently blocks dozens of Reduction in Force (RIF) actions across 17 government agencies, the clock is ticking for thousands of federal employees whose financial futures remain in limbo. And behind the political debate over executive authority and budget discipline lies a more urgent, personal question: What happens to a worker who’s forced to retire without a plan?
“Every 90 days, federal employees are being pushed to make the biggest financial decision of their lives—without the support or time they need to do it right,” says Michael A. Scarpati, a certified financial planner and CEO of RetireUS, a fintech platform that connects workers with fiduciary experts. “It’s not just bad policy. It’s dangerous for everyday Americans.”
The administration has made clear that, if the injunction is lifted, agencies will move swiftly to resume or begin RIFs—a form of structured layoffs that allow departments to eliminate positions and trim costs.
In a request to the U.S. Supreme Court, the Justice Department called the delay “disruptive,” saying it forces agencies “to keep large numbers of employees on the payroll without necessity, at unrecoverable taxpayer expense.”
But for workers inside those agencies, the disruption began long before the legal showdown. “You can’t expect someone who’s spent 25 years in public service to reinvent their retirement strategy in a matter of weeks,” says Scarpati. “They’re not just losing a job—they’re losing access to FEGLI life insurance, early retirement benefits, and sometimes their housing stability.”
RIFs are not new. But the scope and speed of the current reorganization push are unprecedented. Unlike past downsizing efforts, which were often slow, localized, and tied to specific agency restructuring, these cuts are happening under a 90-day rolling cycle. That means federal workers—especially those over age 55—face mounting pressure to accept Voluntary Early Retirement (VERA) offers or risk being laid off altogether.
The challenge? Most don’t know what that decision means for their long-term financial well-being.
“Without proper guidance, people leave money on the table. They underestimate taxes. They lose essential coverage. And they don’t understand options like using IRS Code 72(t) to access their Thrift Savings Plan early, penalty-free,” Scarpati explains.
The administration’s argument for fast-tracking the cuts rests on fiscal responsibility. But critics warn that short-term savings could create longer-term harm.
“This scheme could become a fait accompli before the courts can even rule,” the American Federation of Government Employees (AFGE) argued in court filings, warning that statutorily authorized programs and services could be lost—along with the livelihoods of hundreds of thousands of workers.
Scarpati agrees. “We’re not just talking about numbers in a spreadsheet. We’re talking about families who may not be able to cover COBRA premiums, who have no plan for out-of-pocket medical costs, who could lose access to income in the years they need it most.”
His organization, RetireUS, launched Government Transition Decision HQ as a direct response to the crisis. The initiative offers free one-on-one planning sessions, webinars, and federal-specific financial tools to help workers avoid rushed mistakes that could derail their retirement security.
The legal drama is playing out in high courts, but the consequences extend across the country. Many of the impacted employees serve in small offices, rural communities, and support roles in key federal programs.
And it’s not just the employees who are vulnerable. If those offices close or services are eliminated, the public—especially the elderly, veterans, and low-income families—may see delays in Social Security, Medicare processing, and disaster assistance.
“Reorganization is sometimes necessary,” Scarpati says, “but if you gut the workforce without a plan, you create instability that echoes throughout the economy.”
As the injunction holds—for now—Scarpati urges federal workers to take advantage of the time to prepare.
With the next RIF deadline already looming and legal uncertainty still unresolved, one thing is clear: behind every agency cut is a person, a paycheck, and a plan that may not survive without urgent support.