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Hundreds of Ogden, Utah IRS employees are expected to be laid off in the coming months, reports KUTV. The layoffs are part of President Donald Trump and DOGE’s plan to slash federal spending by dramatically cutting the federal workforce.
The Trump administration has already fired over 7,000 employees from the IRS and plans to cut 11,000 more by May 15 — in line with its goal to reduce the department’s workforce by 50%. All told, there were 280,253 layoffs across 27 federal agencies in February and March.
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“This was going to be my retirement plan,” one probationary IRS employee, who did not want to be identified, told KUTV reporters. “My wife is going to be fired too, so it’s going to affect my entire family.”
Industry layoffs could impact retirement plans
The rolling announcement of layoffs in federal departments has left many employees, including those nearing retirement, facing uncertainty about their financial future.
In the latest round of layoffs, the Trump administration fired roughly 90% of the Consumer Financial Protection Bureau’s workforce, or 1,500 employees — a move that’s currently blocked by a Washington D.C. district judge
Federal and state government jobs are often seen as stable employers with generous benefits. Government employees tend to take on lower salaries in exchange for stronger job protections compared to the private sector.
For the thousands of workers facing unexpected layoffs, the financial impact — especially on retirement savings — could be significant.
Here are a few steps to keep your retirement savings on track.
Don’t remove retirement savings from retirement accounts
It can be tempting to dip into retirement savings after a layoff, but this can have a long-term impact on your golden years. Withdrawing from retirement accounts can lead to significant tax liabilities and penalties. It also disrupts the long-term growth potential of your savings.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Instead, make sure to apply for unemployment and try to negotiate a severance package.
Consider rolling retirement savings over into an IRA.
If you currently have a 401(k), consider rolling your savings into an Individual Retirement Account (IRA) or a new employer’s retirement plan, which allows your investments to continue growing tax-deferred. Rolling over, rather than withdrawing, doesn’t create a taxable event or require you to pay a penalty.
This move can provide more control over your funds and a broader range of investment options.
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.
To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.
Pull a small amount for emergencies, if you must — but put it back as soon as possible.
New IRS rules allow taxpayers to pull up to $1,000 from their retirement savings tax-and penalty-free. This could help some laid-off workers bridge the gap between jobs. However, that $1,000 might also grow exponentially with a little bit of careful investing.
Consider creating an emergency fund with at least six months of living expenses instead.
Rather than keeping the money in your savings account, opening a high-yield savings account with little to no fees allows you to enjoy the benefits of compounding interest.
As of April 21, the national average interest rate offered by savings accounts was 0.41%.
For example, you can open a high-yield checking and savings account with SoFi and earn up to 3.80% APY Plus, SoFi charges no account, monthly or overdraft fees.
The best part? You can get up to $300 when you sign up with SoFi and set up a direct deposit.
Keep building
Layoffs are challenging, especially when they disrupt long-term plans, as they have for federal employees across the country. But by making informed decisions and leveraging your resources you can navigate the challenge without setting back your retirement goals.
While you’re looking for work, it might still pay to squirrel away a little each day to keep up with your long-term investment goals.
One option is to automatically invest spare change from everyday purchases into a smart investment portfolio of diversified ETFs with Acorns.
Here’s how it works: Anytime you make a purchase with your linked debit or credit card, the amount will automatically be rounded up to the next dollar, and the spare change is set aside.
For instance, when you buy a coffee for $4.25, Acorns will round up the purchase to $5 and set aside the 75-cent difference. Once the savings reach $5, it’ll be deposited into your smart investment portfolio.
And you’re not limited to spare change. You can also automate investing as part of your paycheck in low-cost diversified ETFs on a monthly basis.
The best part? You can get a $20 bonus investment when you sign up with Acorns.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
