Government Retirees

[W2R]

I found the pre-retirement training offered by my agency to be extremely helpful so if any are offered for you, I'd recommend attending.

The helpfulness of the training depends on a few factors if you ask me. #1). Knowledge and understanding of the attendee prior to attendance. Knowledge and presentation of the actual training. Sometimes the presentor is just OK.

I stand corrected! I guess that as usual, my agency just did things right (like finding a good pre-retirement training for us). I liked working for them.

 

[gayl]

Gayl, I have read this paragraph 3 times, and still have no idea what it says. How do you convert a pension, and are you saying you paid extra money to do this? What was strange about the time?

Yes. I converted from Tier 2 pension (rank-and-file) to Tier 3 (mgmt) pension but because Tier 3 had a higher monthly contribution, my Tier 3 was underfunded by 66k and the 'contract' needed to resolved before retirement. I could have left myself in Tier 2 but that formula was YRS × FAS × 1%@55 + max 3% COLA whereas Tier 3 was YRS × FAS × 2%@55 + max 4% COLA. Didn't make it to 55 so left at 1.67%. That 66K was well worth it.

My '5 yrs to retirement' session showed me the #s and was invaluable. I had already been a director for several years but did not know about the conversion.

 

[RAE]

I retired from the fed. govt. (under CSRS) about 5 months before reaching age 55. I already had more than 30 years of service, and was just waiting until I reached 55 (for normal retirement eligibility), but they offered me an "early out" a few months early, so I took it. I have no idea what percentage of my regular salary my pension was, but like Donheff, I had carefully determined my expenses (and other sources of income), and pretty much knew that I would be okay.


I had a good career overall, but my last 18 months or so was not much fun. We got a new supervisor at our office during that period, whose main objective was to cut staff and make life miserable for everyone, which is a big reason why I took the "early out". No regrets.

 

[1242Vintage]

I found the pre-retirement training offered by my agency to be extremely helpful so if any are offered for you, I'd recommend attending.

I found the pre-retirement seminars helpful too. At the seminar I caught a comment from one of the presenters that was pure gold! Presenter asked if anyone has a disabled dependent since they are covered under the pension system too.

We have a disabled adult child (she’s deaf) and she qualifies for a portion of my pension ($2,800/month) PLUS healthcare for her lifespan as long as she remains single after both wife and I pass. Wouldn’t have known that if it weren’t covered at the seminar.

 

[Chuckanut]

I retired when I found out that if I took my pension a bit early, I could buy into a state medical insurance plan. There was no subsidy from the state, but the plan benefits were good and the state group rate was much better than any individual plan I could buy.

Pension? If I waited for it to exceed my take then home income, I would still be working today, and tomorrow, and probably well into the 2030's. It's big benefit was being able to get good health insurance at a more reasonable price. No Obamacare back them.

I sleep better knowing that my modest pension plan is 100% funded. Better a 100% funded brass and wood plan than a less than 80% funded Solid Gold Platinum Plated plan. (There are two much older SGPP plans, real stinkers, that pull the state down to 90%.) Now if I could only get the Feds to work on fixing SS again.

 

[Amethyst]

My agency started offering retirement planning seminars at mid-career (15 years in). They were some of the most useful presentations I've ever attended. Eventually there was a tool on the internal web where you could put in age, years of service, and other factors, and compute your monthly benefits for whatever retirement date you chose. Sometimes, when I was really annoyed at work, I would run the numbers just for fun. "Ha, ha! Think you've got a hold on me? Just wait till I dance out the door and leave you flat." Not that I ever actually did such a thing!

Of course I attended real retirement seminars later on, too. And met with a retirement counselor the moment I had a date in mind. All extremely useful. They brought in former employees, now contractors, who were actually paid to explain all the important pro's and cons of a very complex retirement system.

I found the pre-retirement training offered by my agency to be extremely helpful so if any are offered for you, I'd recommend attending.

 

[braumeister]

I was stationed at the Pentagon when I decided to retire, and I had the chance to attend retirement planning seminars aimed at active duty military, although I had to pay for it. IIRC it cost a couple hundred bucks for ten evening sessions of about three hours each in 1989.

Worth every penny, since I credit that experience with giving me the confidence to easily score exactly the kind of job I wanted for my second career, despite never having worked in that field before.

 

[zinger1457]

The helpfulness of the training depends on a few factors if you ask me. #1). Knowledge and understanding of the attendee prior to attendance. Knowledge and presentation of the actual training. Sometimes the presentor is just OK.

DW is 9 years into a FERS position after 21 in the USMC. She will jump in 2-5 years and will have to defer her FERS until age 63. From what I gather, the vast majority of folks do not defer. They work up until eligibilty of some sort. We don't need that because of our military pensions. Took a lot of digging and asking to get the specifics of quiting at 50-54 and defering until 63. Most responders were wondering why we were doing it that way. Same responses we would get when talking to people about 55 rule with 401k's. Most people just don't know.

I also deferred my FERS retirement, left the feds at 53. The retirement training is geared towards those applying for an immediate retirement, I'm sure the vast majority fall in that category. The OPM web site has the information you need, by the time I went to the retirement training class I was well read up, found the class mostly useless for my needs but would be helpful for normal retirees. Tell your wife to be patient when it comes time to applying for her FERS pension, it seems deferred retires are placed at the end of the line, priority is given to immediate retirees. As directed I submitted my paperwork 3 months before I wanted to start my pension, after not hearing anything from OPM for a couple months I contacted them and was told it might be another 6 months before they could get to it. Not a big deal to me, I got what was coming, just took a little longer then expected.

 

[teej1985]

The helpfulness of the training depends on a few factors if you ask me. #1). Knowledge and understanding of the attendee prior to attendance. Knowledge and presentation of the actual training. Sometimes the presentor is just OK.

DW is 9 years into a FERS position after 21 in the USMC. She will jump in 2-5 years and will have to defer her FERS until age 63. From what I gather, the vast majority of folks do not defer. They work up until eligibilty of some sort. We don't need that because of our military pensions. Took a lot of digging and asking to get the specifics of quiting at 50-54 and defering until 63. Most responders were wondering why we were doing it that way. Same responses we would get when talking to people about 55 rule with 401k's. Most people just don't know.

There is nothing to be gained by waiting until 63. She would defer to 62 for her full pension.

 

[jazz4cash]

I think a lot of folks that drool over Gov’t pension payouts don’t take into account the cost to employees which can be significant. OTOH I didn’t have to contribute to my Megacorp pension but it had an optional contribution feature that added slight bump up for a tiny cost. Of course they kept reducing the payout but it ended up around 40% of final salary. The 401k + match started near the beginning of my career and they maintained the DB pension in addition rather than dropping it and offering 401k only as many employers did.

I recall vividly when FERS came about all my Fed friends and family thought it was no longer an attractive place to hire into.

 

[teej1985]

I recall vividly when FERS came about all my Fed friends and family thought it was no longer an attractive place to hire into.

If someone was hired before 2013, it was a lot more attractive than it is now. I pay 4.4% for my pensions, people hired before 2013 only pay 0.8% fro the same pension.


I suppose less of my pension will be taxable, at least.

 

[Teacher Terry]

I worked 15 years for the state. I started my career later going to undergrad and graduate school once my 3 kids were in school. My pension when I retired was a third of my yearly income. I took a 4K cut to have my husband as beneficiary. Now divorced I was able to start receiving it and I also get small raises. I didn’t realize when hired that the state didn’t pay into SS which hurts. For people with 30 years in the SS cut doesn’t really matter.

 

[Amethyst]

My CSRS pension contribution was 7%, slightly more than the FICA contribution of 6.5%, which I did not have to make.

After being on the ER forum, I wondered what I might have done with that 7%, and if I could have accumulated more than the NPV of my pension, which of course goes down with age. But that's the bargain you make: I know I'll get the pension, if I stay in long enough. I don't know for sure what I could do for myself. Either way, I am pretty sure I will get a larger monthly payout than SS would have provided.

I think a lot of folks that drool over Gov’t pension payouts don’t take into account the cost to employees which can be significant. .

 

[zinger1457]

My CSRS pension contribution was 7%, slightly more than the FICA contribution of 6.5%, which I did not have to make.

After being on the ER forum, I wondered what I might have done with that 7%, and if I could have accumulated more than the NPV of my pension, which of course goes down with age. But that's the bargain you make: I know I'll get the pension, if I stay in long enough. I don't know for sure what I could do for myself. Either way, I am pretty sure I will get a larger monthly payout than SS would have provided.

The FERS SS contribution was never meant to match the CSRS pension by itself, you also need to add in the smaller FERS pension and the 5% company matching TSP contribution which could add up to a significant amount over a long career if invested wisely (a big IF for many FERS employees).

 

[Music Lover]

I think a lot of folks that drool over Gov’t pension payouts don’t take into account the cost to employees which can be significant.

Sure, but considering how many people there are that have no savings, having a govt pension is probably the best that they can do. This site is different...there are a lot of high achievers on this site that had the means to save $2, $3, $5 million for retirement.

But not everyone has that opportunity. I know several people who couldn't save a dime but were able to retire only because of their govt pension. I never made a lot of money yet was the first one of all my friends to retire, and many of them made a lot more than me.

 

[donheff]

I retired from the fed. govt. (under CSRS) about 5 months before reaching age 55. I already had more than 30 years of service, and was just waiting until I reached 55 (for normal retirement eligibility), but they offered me an "early out" a few months early, so I took it. I have no idea what percentage of my regular salary my pension was, but like Donheff, I had carefully determined my expenses (and other sources of income), and pretty much knew that I would be okay.

It is pretty straightforward. You can look at the amounts for the first 5, years, the second 5 years, and then all the years thereafter. Or just remember that they total up to 56.25% for 30 years. Add 2%/yr for any additional years worked beyond 30 (including a credit in months or years for unused sick leave). I ended up with 31 years - so 58.25%. The dollars were calculated on that percentage times the high three average salary but that was almost the same as ending salary for me. Then they took out 10% to guarantee my wife a survivor annuity when I kick. So take home ended up at 52.425%.

 

[jazz4cash]

Sure, but considering how many people there are that have no savings, having a govt pension is probably the best that they can do. This site is different...there are a lot of high achievers on this site that had the means to save $2, $3, $5 million for retirement.



But not everyone has that opportunity. I know several people who couldn't save a dime but were able to retire only because of their govt pension. I never made a lot of money yet was the first one of all my friends to retire, and many of them made a lot more than me.

For me, having pension and SS gave me confidence to take substantially more risk with the 401k.

 

[Montecfo]

Sure, but considering how many people there are that have no savings, having a govt pension is probably the best that they can do. This site is different...there are a lot of high achievers on this site that had the means to save $2, $3, $5 million for retirement.

But not everyone has that opportunity. I know several people who [-]couldn't[m[/-] didn't save a dime but were able to retire only because of their govt pension. I never made a lot of money yet was the first one of all my friends to retire, and many of them made a lot more than me.

FIFY.

I think discipline and goal orientation are the large variables.

Lots of high earners spend all they make and more, and plenty of folks of less means save, invest and stay invested over years to a comfy retirement.

And that discipline is needed with pensions highly endangered (though most US workers never had access to them).

 

[old medic]

For me, having pension and SS gave me confidence to take substantially more risk with the 401k.

I'm in the same boat here... now to learn more

 

[Music Lover]

Another good thing about being a govt retiree...when the topic of "how much is enough" comes up, most of us have an entirely different answer. "Enough" was the day I was eligible to retire with an unpenalized pension. OMY syndrome was never a factor.

 

[Andre1969]

This was awhile back, but at the end of 2012, we had a lady retire, who was under the old CSRS plan, and had one year under the max in. I always used to think you had to have 40 years, but I think it's actually 42, to get the full 80% of your best three years?

Anyway, at this point she was about to turn 78, and her career had been on cruise control for years. I remember her saying that she decided to go out at 78%, rather than 80%, because something had changed...maybe they were going to make her pay more for health insurance or something like that? But, she just decided it wasn't worth it, to stay an extra year for another 2%.

I don't know what her financial situation was, otherwise, but I know she was a widow, and might have gotten something from that. She also had a fairly nice, upscale home in Crofton, Maryland, that backed up to a golf course, and I'm sure was long since paid off. So, she was doing pretty well.

Well, presuming she's still alive, that is. She'd be 86 now. I looked up her house online, and it shows it's still in her name, just in a family trust. I tried googling her name with obituaries and nothing came up. So, hopefully she's enjoying those twilight years!

 

[teej1985]

Another good thing about being a govt retiree...when the topic of "how much is enough" comes up, most of us have an entirely different answer. "Enough" was the day I was eligible to retire with an unpenalized pension. OMY syndrome was never a factor.

I just can't imagine working that long. The day I hit pension and lifelong FEHB eligibility, and not a day more. Even with the 25% reduction in the pension. I honestly don't even know if I can make it that long. The nice part is that there being so many different agencies, you can try different things over a career, but to do the same thing for 20+ years, ugh, the thought is exhausting.

 

[Music Lover]

I just can't imagine working that long. The day I hit pension and lifelong FEHB eligibility, and not a day more. Even with the 25% reduction in the pension. I honestly don't even know if I can make it that long. The nice part is that there being so many different agencies, you can try different things over a career, but to do the same thing for 20+ years, ugh, the thought is exhausting.

My retirement age without penalty was 55...long enough but still early enough for me. I actually left 15 months prior to 55 and held off collecting my pension until the non-penalty phase was reached. I never would have made it to 60, I would have left and taken the penalty.

 

[Teacher Terry]

Tee, I did the same job for 19 years and still do it on a consulting basis which has been 9 years. But I went to graduate school in a small highly specific field to be able to do it. Teaching is a new gig just in retirement which was great fun while it lasted.

 

[jazz4cash]

This was awhile back, but at the end of 2012, we had a lady retire, who was under the old CSRS plan, and had one year under the max in. I always used to think you had to have 40 years, but I think it's actually 42, to get the full 80% of your best three years?

Anyway, at this point she was about to turn 78, and her career had been on cruise control for years. I remember her saying that she decided to go out at 78%, rather than 80%, because something had changed...maybe they were going to make her pay more for health insurance or something like that? But, she just decided it wasn't worth it, to stay an extra year for another 2%.

I don't know what her financial situation was, otherwise, but I know she was a widow, and might have gotten something from that. She also had a fairly nice, upscale home in Crofton, Maryland, that backed up to a golf course, and I'm sure was long since paid off. So, she was doing pretty well.

Well, presuming she's still alive, that is. She'd be 86 now. I looked up her house online, and it shows it's still in her name, just in a family trust. I tried googling her name with obituaries and nothing came up. So, hopefully she's enjoying those twilight years!

I certainly hope so! Living in this area, I know a dozen or so people like that including some relatives. Some also that worked at megacorp many years ago were working for less than the pension.....didn't condsider they'd no longer need to pay FICA or CSRS retirement contributions. I realized they generally:
a) don't have any resource like this forum
b) never tried to figure out what their expenses would be
c) have no life outside work
d) have adult children, grandchildren or other relatives to support
or
e) never figured out how to live on 100% of their income so the idea of living on 80% terrifies them.