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Old 05-14-2020, 07:22 AM   #61
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Originally Posted by FatBob View Post
I worked in the private sector until age 35 and then began Federal service. My experience is that Federal salary is less than the private sector but the stability is better. A lot of people will mention how good the health coverage is in retirement; however, they often neglect to mention that when you turn 65, your Federal Employee Health Benefits (FEHB) become secondary insurance to Medicare....however, what you pay for the FEHB does not decrease. For example, if you retire at 62, you only get three years of FEHB before it becomes secondary to Medicare but you are still paying full price for the FEHB from 65 until death. An increasing number of Federal Employees are "suspending" their FEHB when they turn 65 and purchasing a Medicare Supplemental policy because the premiums are cheaper and the coverage is the same. If/when that math might change, you can always "un-suspend" your FEHB. The FEHB also covers international health care so
FEHB costs the same in retirement as when employed but it also remains in full force after retirement. Medicare Part A (free) covers hospitalization but Part B is optional (technically, even Part A is optional but it makes sense to enroll and virtually everyone does). I don't have Part B so my FEHB continues in the same way it did when I was working which means I pay the same co-pays and deductibles. But I don't pay Part B, which can be very costly if you have dual pensions or large RMDs. I also don't pay Parts C or D and instead rely on the FEHB. FEHB also covers health costs while on international travel (paid for an ER visit in France).

The FEHB insurance companies want retirees to take Part B (and 70% do) so they waive deductibles and co-pays, and pay full rates on out of network doctors. About 70% of retirees take Part B and do end up with an expensive (albeit comprehensive) supplement. The other 30% skip Part B and continue with what is generally viewed as good health insurance at an acceptable out of pocket cost. Very few feds drop FEHB and take a Medicare supplement instead. The only option for suspending FEHB in favor of a supplement is to take a Medicare Advantage program. The suspension allows you to come back to FEHB if you drop Advantage. A fair number of Feds in plans like Kaiser go with the Advantage program. Part B costs are included in the Medicare Advantage enrollment so they would go up for high income retirees.
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Old 05-14-2020, 07:52 AM   #62
gone traveling
Join Date: Sep 2014
Posts: 225
the third option.... work for yourself and start your own company... when you get ready to retire you sell the company and live off of that.... too many ways to make money.. you just need to figure out what would make you happy and work your tail off for a few years growing your company...
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Private vs. Public
Old 05-14-2020, 08:53 AM   #63
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Private vs. Public

I worked in the Private sector until age 52. I'm now 153 days away from retiring from State government. Holding on by the skin of my teeth because of an already in progress re-organization and now the impact of Covid-19 on state budgets. I have to do 10 years to get the retirement medical, which I REALLY need. My retirement medical is totally free, AND they reimburse Medicare Part B. If you are in your 30's, I have to say I have my doubts that government pensions will be what they are when you get to retirement age. I see small changes being made already that are making it tougher. Longer vesting and lower benefits. Also, the public sector has somewhat lower salaries and generally no bonus or incentives. Many rules and (until Covid) little flexibility in terms of working from home, etc. Old fashioned management techniques.

As others have said, you may like it or not. You can give it a go and if you hate it, you can move on. I sincerely believe the short term economic outlook is awful, but with the exception of certain sectors, most of the economy will bounce back. I am worried about hospitality and travel, but I'll end here as I am digressing from your original question.

I'm grateful I would up in the public sector, because of the retirement medical.
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Old 05-14-2020, 11:32 AM   #64
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Like some others, had 12 years in private sector then switched to public for the last 20. Have small pension from private and now a nice pension and free health care from public sector. Best decision for me as taking a public position enabled me to FIRE at 54, given health care and decent pension that meets our normal expenses.

More importantly, LBYM is critical as it allowed us to fully contribute to 401k and 457 during career, which provided another solid leg of the retirement stool.

While things worked out well for me, it is also a priority to do something you enjoy as 30+ years is a long time and you want to enjoy the ride too.
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Old 05-14-2020, 01:31 PM   #65
Confused about dryer sheets
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It definitely depends on what employer and how well funded the pension system is. Ironically, despite California's shaky financial situation, I think California for new public sector employees is fine. Most of the county pension systems are hovering around 80% and post Jerry Brown everyone is paying half the cost. Depending on the state, there may be flexibility in going between different agencies, through reciprocity, so you don't need to feel locked into an employer. Retiree health care is a concern but for some of the reasons listed above, I think it is less important, and can always be downgraded (i.e., the Blue Cross PPO currently offered as a default could be reduced to an EPO, or the Kaiser HMO also offered could convert into a Bronze HDHP model) as there was nothing contractually that obligated a specific plan design. It would get a lot of backlash but is not impossible.
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Old 05-14-2020, 02:00 PM   #66
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I worked as a programmer from 1979-2006, 19 years in aerospace then 8 years in financial services.

I chose the no-pension private route over the public or pensioned private route, figuring that a maxed out 401k would be better than a pension for me. I figured a pension might trap me in an unpleasant work situation. I kept the 401ks in SP index funds, then rolled into dividend stocks in an IRA after leaving each job.

It worked out well. I could not have retired at (net) full salary replacement at 48 on a pension.
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Old 05-14-2020, 04:57 PM   #67
Dryer sheet wannabe
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OP - one thing you need to consider is how motivated are you to achieve. I went into the Fed gov after a 1.5 yr layoff during the dotcom implosion for all the reasons you've heard here - pension, security, healthcare. I managed to stay 11 yrs before I had to leave. I've never had a more soul sucking, demoralizing job in my life, before or since. People around me frowned heavily on trying to do something good with my career and produce good work. The overwhelming majority were just there to collect a check and skate as much as possible. We used to joke that the building could collapse and kill everyone, and productivity would increase. I'm much happier working harder but able to produce something I'm proud of without beating back the naysayers and negative influences to do so. I guess it depends on where you worked but I heard much the same story wherever I went.
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