Retirement Investing Option

[InTheShade]

I am a federal employee and am considering retiring in FY18. I am on the CSRS (old) retirement system and, as such, will receive a fairly good pension. In addition, there is an option called the Voluntary Contribution Program which would allow me to contribute an amount of my savings (limited to 10% of my total cumulative earnings) into an account which, at retirement, can be rolled over into a Roth IRA where it can grow tax free. My estimate is that at 10% I could put about $220k into this account and I would probably put it into some kind of indexed stock fund. I'm thinking this sounds like a pretty good idea but would love to hear from others particularly if they are familiar with this program.

 

[Blue Collar Guy]

you made 2 million 200 thousand in salary? Please tell me you were like a rocket scientist. Or you worked 45 years.

 

[ABQ2015]

Many of us on this forum are engineers. And if you are an engineer and work for the federal government, $2.2M over a 30+ year career is not unreasonable. I have 32 years of service and have a similar total salary. And I started at $23,170 in 1985 when my classmates were being hired in industry at $30K or more.

But I'm in FERS and don't know much about the Voluntary Contribution Program, although I have heard of it, so cannot help.

 

[InTheShade]

Yes, I am an engineer and have 35 years. I've just estimated at the 2.2M number. I called OPM to get a definitive number but was told that I would not get that until after I had applied and been approved for the program.

 

[Blue Collar Guy]

Yes, I am an engineer and have 35 years. I've just estimated at the 2.2M number. I called OPM to get a definitive number but was told that I would not get that until after I had applied and been approved for the program.

Nice, ty for the response. Seems like a great deal, i would do that program in a heartbeat.

 

[jzajzz]

what are you trying to accomplish with that 10k ... are you not trying to touch it for a while.. and what strategy will you employ with the rest of your earnings .

 

[InTheShade]

At the moment, my cash allocation is too high and I want to do something more productive with some of it. So my objective for the 10% would be to let it grow as much as possible. I will have enough income from my pension and other investments so that I will not need access to this money or any income it may generate any time soon. My understanding is that I could not access any earnings from it for 5 years without penalty. At that point I would be 60.