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Advice on VA/Federal job for retirement plan?
Old 02-18-2010, 03:21 PM   #1
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Advice on VA/Federal job for retirement plan?

I work for a worldwide retail/wholesale chain, as a pharmacist, that has a reputation for being 'good' to its employees and for the most part that is true.
My biggest issue is that there is no pension/retirement. No problem, most places don't have them anymore and it just means we save more.
There is no continuation of health benefits after retiring. Again, most employers don't offer that benefit anymore either, but it would be nice to be able to continue into the group plan after you gave 20-25 years to the company.

Anyhow, the original plan was to work FT 13 more years to 55 then drop to ESR and work PT (20 hrs a week, 2 days), MAINLY to keep benefits and as extra income (PT I can make the median wage in the area) till I hit Medicare.

Then I saw an opening for a VA (Veterans Administration) pharmacist in the area and am now wondering if it is worth it to try and move jobs to earn a government retirement and continuation of health benefits.
Just from some minor poking around, it seems I could 'early retire' at just under 59 years of age with 17ish years in the program. I estimate that the VA salary would be about $8-10k/year less.

So I am asking advice from people who have a government retirement package if it is worth it, benefits/disadvantages, etc.

Or if there is a VA pharmacist on the board what s/he has to say about working for the VA and the benefits or disadvantages.

Thanks.
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Old 02-18-2010, 03:48 PM   #2
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If it is a job as a federal employee under the FERS retirement system, your minimum retirement age is probably around 56-57 depending on your year of birth. For more information, check www.opm.gov/retire If you have put in ten years by that age, you can retire on a reduced pension if you want to. I would recommend contributing the maximum to the TSP, because you will need it in retirement.

I am happy with my tiny FERS pension (not enough to pay the groceries but certainly welcome), my TSP withdrawals, and lifetime medical benefits, the best they offer for only $175/month (right now, anyway, but spiralling upwards as everywhere). While I was working the pay was pretty low in my field, but as I grew older I appreciated the job security.
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Old 02-18-2010, 04:21 PM   #3
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TSP offerings are the most cost effective 401K.

What you don't get is access to employee stock purchases that might be offered through publicly traded pharmacies.

Were I you I would not count on any retirement offerings from public agencies such as State/County hospitals.
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Old 02-19-2010, 11:18 AM   #4
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Check out OPM.gov and look at MRA +10 retirement. MRA is minimum retirement age, probably 56-57 and varies depending on your age (mine is 56 and 4 months, age 43). MRA+10 reduced your annuity by 5% a year under age 62 and you get no COLAs until 62, so its a significant hit.

Also check out the pay charts. Your pay will progress upwards due to step increases and cost of living raises (most of the time). The pharmacist jobs I've seen here are all in the GS12 level, which is fairly decent.
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Old 02-19-2010, 11:35 AM   #5
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Originally Posted by Bimmerbill View Post
Check out OPM.gov and look at MRA +10 retirement. MRA is minimum retirement age, probably 56-57 and varies depending on your age (mine is 56 and 4 months, age 43). MRA+10 reduced your annuity by 5% a year under age 62 and you get no COLAs until 62, so its a significant hit.

Also check out the pay charts. Your pay will progress upwards due to step increases and cost of living raises (most of the time). The pharmacist jobs I've seen here are all in the GS12 level, which is fairly decent.
(emphasis mine)

FERS pensions are so low anyway, that pension reduction might not be as bad an impact as it might seem. For example, if he starts out as a GS-12 Step 1, and then progresses at the normal rate of step increases, years 8, 9, and 10 would be at step 6, step 6, and step 7. So, at today's pay rates his hi-three would be (80276*2+82570)/3 = 81041, assuming he lives in the "Rest of the U.S." geographic region, which is most of the country. Pay tables are available here. So, his unreduced monthly annuity (pension) would be (81041 x .01 x 10) = $675/month, before taxes and medical insurance deductions. If he takes it at 56, it is reduced 30% so his reduced pension would be $473/month before taxes and medical insurance deductions.

Contributing the maximum to the TSP is really helpful to FERS employees.
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Old 02-19-2010, 11:39 AM   #6
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Pharmacist positions are hard to fill in many markets. There may be a premium above GS12.

As the poster must know there are a variety of specialty areas in pharmacy which affect compensation.
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Old 02-21-2010, 12:45 AM   #7
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(emphasis mine)

FERS pensions are so low anyway, that pension reduction might not be as bad an impact as it might seem. For example, if he starts out as a GS-12 Step 1, and then progresses at the normal rate of step increases, years 8, 9, and 10 would be at step 6, step 6, and step 7. So, at today's pay rates his hi-three would be (80276*2+82570)/3 = 81041, assuming he lives in the "Rest of the U.S." geographic region, which is most of the country. Pay tables are available here. So, his unreduced monthly annuity (pension) would be (81041 x .01 x 10) = $675/month, before taxes and medical insurance deductions. If he takes it at 56, it is reduced 30% so his reduced pension would be $473/month before taxes and medical insurance deductions.

Contributing the maximum to the TSP is really helpful to FERS employees.

Well I guess the FERS isn't necessarily worth it... Looking at an immediate annuity I would need about $95k in todays dollars to generate $500/mo at age 58. Something that could be achieved with the $8-10k per year in salary difference if invested that way. But the lifetime medical would be priceless.....unless something happens with universal healthcare or the government program.
The VA job posting is listing a salary range of 100,942-118,753 (GS-0660-12/12 whatever that means).

I guess I need to find someone who is actually working for the VA and see what kind of work environment it is like.
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Old 02-21-2010, 11:18 AM   #8
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Like any organization the work environment will differ from facility to facility.

Here is what I would do: apply. Usually there is more than one interview in a selection process. During a second interview share that you want to make sure that you are a "good fit" for the department, not only in terms of skills but temperament. At that point reverse the interview process by asking what they feel are the major issues, ask how they are responding to issues in your profession (pick a couple that you think are important), arrange to go to coffee with a couple of staff who would be your colleagues. Don't ignore the Techs as they often have the most insight into department dynamics.

If you receive an offer after the first interview you schedule your own second interview with them. Try to obtain the names of pharmicists who left the group and seek them out (reverse reference checking). Remember, recruitment is the romance, the first 60 days or so is the honeymoon, after that you start real life.

Hey, you can always decline an offer. Pharmacists are hard to fill positions in many health care organizations.
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Old 02-21-2010, 06:24 PM   #9
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Hey, I'm not even in the US, and that's good advice!
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Old 02-24-2010, 12:18 PM   #10
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I'm in FERS & contribute max +6%. It's all in the (retire @) 2040 auto-allocation. Should I be doing something else with that $? i'll be here at least 21 more years.
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Old 02-25-2010, 02:32 PM   #11
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I'm in FERS & contribute max +6%. It's all in the (retire @) 2040 auto-allocation. Should I be doing something else with that $? i'll be here at least 21 more years.
Go to the Fire & Money board here and start t thread on a desired TSP AA for someone with 21+ years to go.

Simple answer, the Lifecycle Funds look OK to me. I used them but they need to be part of your overall portfolio.
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Old 02-27-2010, 11:35 AM   #12
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Originally Posted by Bimmerbill View Post
Check out OPM.gov and look at MRA +10 retirement. MRA is minimum retirement age, probably 56-57 and varies depending on your age (mine is 56 and 4 months, age 43). MRA+10 reduced your annuity by 5% a year under age 62 and you get no COLAs until 62, so its a significant hit.
Sorry to bump an old thread, but I've been running the numbers again since I'm about 3 years away from my MRA (age 56). I figure my high three will yield about $22k in pension payouts per year. If I were turning 62 in three years the pension + SS + (TSP x.04) would offer a pretty nice income per year.

The early retiree really does get hammered on the pension though. The 30% reduction puts it down to $15,400. The real killer is the lack of a COLA for six years. Even at 3% inflation the pension erodes to $12,829 by age 62. Percentage-wise, that's a huge hit to take to retire six years early.

So, I think the FERS retirement system is a very good system for those who plan to stay until 62, but not so much for an early retiree. Still, I feel very fortunate to have a pension at all, plus the retiree health care is worth a lot. And, as someone else pointed out, the TSP has lower expense ratios than Vanguard.
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Old 02-28-2010, 12:14 PM   #13
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You can retire in FERS at 30 years and have no reductions. Unfortunately, I started with the feds too late, so when I get 30 years I'll be 60.

There is always hope of early retirement packages, or BRACs tho. Not that I want to see the place on the BRAC list.
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Old 02-28-2010, 03:14 PM   #14
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You can retire in FERS at 30 years and have no reductions. Unfortunately, I started with the feds too late, so when I get 30 years I'll be 60.

There is always hope of early retirement packages, or BRACs tho. Not that I want to see the place on the BRAC list.

Oops, I forgot about that. I started too late too.
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Old 03-01-2010, 12:45 PM   #15
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There are a lot of different retirement options. We have an online system called EBIS (employee benny info sys) that shows the most common ones and what the monthly payout is.

It even shows what the payout is with survivor bennies.

Early retirement (MRA+10) with survivor bennies really wipes out the $$!
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