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Recently there has been some discussion on FERS (Federal Employees Retirement System) and retirement. It so happened that is one of the reasons I joined here. I have in my short time learned a great deal from some very smart people here.
A few days ago our HR department put on a retirement seminar/briefing for employees and families. It was a one day presentation. I hope you will find the information valuable for your situations if you are FERS employees or know someone. Remember as the ABC representative said to us “your retirement is yours and not necessarily like someone elses.”
I promised some here that I would post up what I learned. I posted up the slides I could fighting restrictions on file size and formats. I zipped up the slides as a handout from Power Point with multiple slides per page. I hope you will get all the information you need from these.
If anyone has questions on the information presented please ask. If you need answers you can call the 877 number listed on slide 5 or 6. ABC (Army Benefit Center is the FERS inter-agency that takes you from your local HR to the final destination at retirement of OPM. It helps stream line the process and gets everyone on the road to enjoying their retirement.
There are two things that I took as important for everyone to take from this. Besides starting early investing the two are to call for a retirement estimate and expect a two month period at the end as you retire to not be paid. Calling for the estimate will give you an idea how much and what you will need to do if you are missing time or what have you to buy back. Calling the number will get you that information in a report. Second they can also contact DFAS in your behalf to get paid receipts for military buy back time.
FERS employees need to take the FERS pyramid slide to heart, where the FERS annuity is the smallest component and TSP the largest of one's retirement savings. Most FERS employees act as if that pyramid is inverted. So take this for true put away as much as you can into savings accounts. Take advantage of the matching and tax savings of the TSP.
Survivor Benefit Plan (SBP) costs FERS employees 10% of your annuity to pay out 50% survivor benefits or 5% to pay out 25% survivor benefits. If you are planning or have any intention of carrying FEHB (Federal Health Benefits) you will need to at least carry the SBP in 5%. If there is no SBP there is no option for FEHB.
Your FERS retirement is basically the number of years you are an employee as a percentage of your basic salary. Let’s say for example you have 25 years that is 25% of your base pay. Think on that when you think you can retire on that sort of income. Of course many can do 40 years and do. In my case I am going to end up with about 39 years. This is because all federal service is taken into consideration and especially if you did military time and bought that back paying 3% of your pay earned during those years for those years.
As you get ready to retire it will be important to save up your leave and get that as a lump sum. Long term FERS employees usually can carry 240 plus hours into your retirement years. This can equal 2 months of pay if saved judiciously. This pay will be needed to carry you for the wait. They will pay you about 80% when you do start for about 8 months until OPM has settled the years and months count and your final high three years.
Another point if you are retiring like I am due to mandatory service age and losing my position because it requires military service at age 60, a supplement equating to a portion of your age 62 SS income will be paid but only when you get your full pay. It will be brought up in a lump sum catch up pay check. Then you will collect your normal pay. The Annuity supplement is only paid out until you reach 62 when you become eligible to collect SS.
Thoughts based on others's experiences:
1. Talk to the counselors and take advantage of seminars.
2. Get an early start on applications, confirming bought back time, etc and doing research for FERS Survivor Annuity, FEHB and FEGLI decisions…to mention a few.
3. If you don’t plan on immediately getting another job, put aside funds and/or accrue maximum leave to supplement your interim annuity. I’ve heard of folks with complex issues receiving only 25-30% of their final annuity for an extended time.
4. If you do get a new job in federal service do not start until after you have used up the leave you cashed in. If you cashed in say 1 month of leave, do not start back to work within that time frame after you retire or they will be looking for that money back for the time. Your leave carries over year to year, job to job.
As mathjak has said in a number of post everyone puts a lot of emphasis on planning for death but no one seems to be planning for living. I plan on harrassing DW for a good long time. Maybe even be a pain in her butt until the cow jumps over the moon.
I put 25 percent of my gross pay into TSP. FERS will be my second pension when I retire. I already have a, 20 year state employee retirement pension. I will probably have more money when I retire, then I do now.
I plan in working until they kick me out. So, I will probably get at least 25 years here.
golfingduo, it all sounds very good. You do realize though (don't you?) that the vast majority of people in this country (including many on this site I'd bet) have nothing like what you describe. It is one of the topics that infuriates those people most.
As you know I retired from the Army and my pension is pretty good. However, I almost never mention the topic to many of my relatives as it is a very sore point with them (which, unfortunately, I've learned over the years), Totally disregarding what I did over the years in order to earn that pension (a sore point with me).
Anyway, good for you reaching this important milestone in your life.
I put 25 percent of my gross pay into TSP. FERS will be my second pension when I retire. I already have a, 20 year state employee retirement pension. I will probably have more money when I retire, then I do now.
I plan in working until they kick me out. So, I will probably get at least 25 years here.
Great job and hang in there.
Quote:
Originally Posted by Weichert
golfingduo, it all sounds very good. You do realize though (don't you?) that the vast majority of people in this country (including many on this site I'd bet) have nothing like what you describe. It is one of the topics that infuriates those people most.
As you know I retired from the Army and my pension is pretty good. However, I almost never mention the topic to many of my relatives as it is a very sore point with them (which, unfortunately, I've learned over the years), Totally disregarding what I did over the years in order to earn that pension (a sore point with me).
Anyway, good for you reaching this important milestone in your life.
Oh and before you read on down my comments thanks for your service. To your relations that don't like it, tell them to go pick up their ruck and rifle and head to the front lines. Go guard an embassy in Yeman or fly an Apache in Sudan.
Yes, for the vast majority I know don't care about this topic. For them they can ignore it and even speak up if they so chose. This is a free country. I wear the uniform of a soldier to protect that right. If they're jealous they can wear it right along side me. Do it until they're 60. Earn it too, I don't begrudge the majority of folks that sock away 2-3 mil and say I'm FI now and just retire or not.
No let them complain because it is their right. I put this here for those just starting out. The few people working under new rules to now put in 3% of their pay in addition to TSP. For their sake I posted this. To help them make some sense of it all.
Last edited by oldsoldier1976; 03-23-2013 at 03:21 AM..
Those complainers were the same ones who laughed at me and constantly made fun of my government job for the whole 31 years I worked there. I can only remember one or two who asked how to get a job there.
They all told me I should be making more money "on the outside" and was pretty stupid for working hard at my job since I was paid "so little". Now I don't look so stupid and these same people are mad probably because they did not make the same choices.
I was working for a pension and that was my plan. I was a spouse but spouses are far down the ladder when corporate cuts to benefits happen and I knew that 30 years ago. I needed to protect myself. Civil Service pensions then were instead of Social Security. Even if I earned SS outside my regular job, it would be cut by several provisions of the law so I did not run out and work multiple jobs.
There was nothing secret about benefits or pay. Nothing others could not have planned for back then.
But, I say the same thing about debt. We bought a very reasonably priced house, paid it off and will not buy one more expensive when we move. We bought cars, paid them off, and kept them until they were not economically repairable. Current oldest one is about 200,000 miles. Everyone could do the same thing. But a whole lot would rather carry large debt and continue their whole lives. It very often is just a choice.
Everyone should start their working life (or earlier) making plans and having goals. They change over time but knowing where you were, where you are, and where you want to go makes good decision making easier.
Rant over.
What amazes me is the number of people that they Government retirees get free health care. I constantly have to remind new friends I meet that no I don't get free health care. It comes out of my check every month. Where do these people get their info? So ignorant - heck all they have to do is google and get the right info.
Great info.........I try to mentor our younger apprentices just starting their careers to plan for the future (even though some of them have many, many years to go).
Times are changing fast for federal workers and you need to stay abreast of what is coming down the pike as far as changes go. I am within 9 years of retirement and FERS contributions, Social Security, health benefits and annuity supplement are all now on the table to be chopped in some way shape or form.
Great info.........I try to mentor our younger apprentices just starting their careers to plan for the future (even though some of them have many, many years to go).
Times are changing fast for federal workers and you need to stay abreast of what is coming down the pike as far as changes go. I am within 9 years of retirement and FERS contributions, Social Security, health benefits and annuity supplement are all now on the table to be chopped in some way shape or form.
Congrats on the retirement
Not there yet either. I am within 5 years, actually four and a half years. As you say anything can happen. We have to worry about sequestor. I have to worry about my military membership. Every two years we go through a quality retention board. (QRB) where they take a look at our records to make sure we have all our schooling done to the grade we are at or at least in the process of it. That I can still do my annual physical fitness test (APFT). That I meet height and weight standards. That I have a DA Photo on file and any other paperwork in my files that needs to be there. That I have not stagnated in my job and have potential to give good years. It is stressful when they are looking for cuts. I think I made it through this year (fingers crossed). That could mean I only have one more to be worried about. Any way great job on mentoring younger workers. It is key now with the new system. It will save the government money and it will give the younger guys a more heavily weighted responsibility to their own future.
Those complainers were the same ones who laughed at me and constantly made fun of my government job for the whole 31 years I worked there. I can only remember one or two who asked how to get a job there.
Yup! During the late 1980s, my husband was making 1/4 of what he could have been making in the private sector. He had a MBA, worked long and late hours, and traveled across eastern USA for little compensation. We were laughed at too, some of our friends were dot.com-er start up people, everyone was living the good life but us. He constantly reminded me that I'd thank him when retirement came. I thank him every day for the choices he made and his vision for our future. He retired at age 58 and we're living a good life. We've met friends along the way, one had been a vice-president for a gaming company who flashed money around like no tomorrow but at the age of 60 he and his wife were scrambling to find jobs in retail and insuring themselves under the COBRA system until social security kicked in. It's kind of like 'The Tortoise and the Hare'.
I started working for Uncle Sam at an early age, and most of my friends in private industry started at a higher salary and frankly, I never did catch up to them. But over a 34-year career, I worked my way up, and retired at 55 under CSRS. That was five years ago, and I'm very happy.
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until the cow jumps over the moon.
