Federal worker/retiree stats (55, pension, social security, 2010)

[GreenGene]

I'm on vacation (although I'm not sure "on vacation" means the same thing now that I'm retired!) and was just getting caught up with Mike Causey's column on federalnewsradio.com. He had some interesting stats:

In FY2006, 76% of civilian federal employees were enrolled in the Federal Employees Retirement System (FERS), which covers employees hired since 1984. Twenty-four percent were enrolled in the Civil Service Retirement System (CSRS), which covers only employees hired before 1984.

In FY2007, nearly 2.5 million people received civil service annuity payments. Eighty-eight percent of these annuitants received annuities earned under CSRS.

More than one-third of all federal employee annuitants and survivor annuitants reside in five states: California, Florida, Texas, Maryland, and Virginia.

The average civilian federal employee who retired in 2006 was 59.4 years old and had completed 27.8 years of federal service.

At the end of FY2008, the balance of the CSRDF was $728 billion, an amount equal to more than 11 times the amount of outlays from the fund during 2008. The trust fund balance is expected to reach $785 billion by the end of FY2010.

From 1970 to 1985, the number of people receiving federal civil service annuities rose from fewer than one million to nearly two million, an increase of 105%. Between 1985 and 2008 the number of civil service annuitants rose by 500,000, an increase of 25%.

As of September 2008, civilian federal employment, including the Postal Service, totaled 2.8 million workers. This was 100,000 more than the number of employees in 2000, but 300,000 fewer than the number of employees in 1990.

Employees of the federal government are older on average than workers in the private sector. Fifty-eight percent of all federal employees were aged 45 or older in March 2009, and almost 25% were aged 55 or older. In contrast, only 42% of wage and salary workers in the private sector were 45 or older in 2007, and 18% were 55 or older.

These stats are from a report of the Congressional Research Service, but I don't know which report, so I can't provide a link. Also, the "CSRDF" refers to the Civil Service Retirement & Disability Fund.

[Giesela]

I'm 53 and hope to retire at 60. I am that my Air National Guard and FERS retirement benefits will end up being cut and cut and cut as I get older. All my retirement depends on the govt if you include TSP at which I have not done all that well.
The "general population" has I think a view that federal retirees are "fat cats" or a little "parasitical" and would not I believe complain if our benefits were cut.
So its definately a big worry for me.

[NewToCA]

Originally Posted by Giesela

I'm 53 and hope to retire at 60. I am that my Air National Guard and FERS retirement benefits will end up being cut and cut and cut as I get older. All my retirement depends on the govt if you include TSP at which I have not done all that well.
The "general population" has I think a view that federal retirees are "fat cats" or a little "parasitical" and would not I believe complain if our benefits were cut.
So its definately a big worry for me.

I think you will be OK with FERS, I suspect any potential cuts won't apply to folks as far along as you. Frankly, I think the benefit formula is pretty safe, but retirement age might be impacted at some point. But again, I think you are far enough to not be concerned.

As far as the public goes, I wouldn't worry about their sentiments. When I was in high school, back in the 1960's, I read a whole bunch of stuff about "bloated bureaucrats". I still read it today, so I guess it is just embedded into our cultural perspective.

When you take a look at your social security and pension benefits, TSP won't have to be that great to give you a decent annual income. TSP has an annuity purchase option too, so if you are concerned about long term income you can go that route and stabilize your long term benefits:

TSP: Civilian Features chapter 14, TSP Annuities; 2008 Sep 18

[kygman]

My wife retired as a civilian employee at an Army base a couple years ago. She only had 21 years in so her pension is about $375/month. Along with my pension as a state employee we were also using her TSP. She had it figured out, with what she was drawing, that it would last us until her 62nd birthday, a little over 2 years from now. Well, thanks to the stock market, her TSP will be gone by December. She had moved hers around before the drop and couldn't do anything with it until it was too late. Good luck with yours!

[Mick St John]

I would NEVER have retirement money in stocks this close to retirement. Suze would NOT approve. All of my retirement money is now in the G fund and that's where it's going to stay. Not making a lot, but not losing anything either.

[MadManofBethesda]

Originally Posted by Mick St John

I would NEVER have retirement money in stocks this close to retirement. Suze would NOT approve. All of my retirement money is now in the G fund and that's where it's going to stay. Not making a lot, but not losing anything either.

Well, since you are a government employee with an inflation-indexed pension, having your 401(k) money 100% invested in Government securities is not really an issue. But for the average private sector employee who needs their 401(k) to survive, such a strategy would be a recipe for complete and utter disaster. Twenty-five or thirty years down the road you could end up running out of money or living in poverty.

[juniperbleu]

Originally Posted by Mick St John

I would NEVER have retirement money in stocks this close to retirement. Suze would NOT approve. All of my retirement money is now in the G fund and that's where it's going to stay. Not making a lot, but not losing anything either.

I think if you were to choose the Lifetime Fund option, that's basically what it has you do closer to retirement. In your younger years you play around with the International markets and such, but as you go along they put more and more in more stable investments.

[MadManofBethesda]

Originally Posted by juniperbleu

I think if you were to choose the Lifetime Fund option, that's basically what it has you do closer to retirement. In your younger years you play around with the International markets and such, but as you go along they put more and more in more stable investments.

There are four lifecycle funds for future retirees: 2040, 2030, 2020, 2010, and an Income Fund for current retirees. Even the Income fund, which is the most conservative investment, has 20% invested in equities (12% C, 3% S, and 5% I) with another 6% in the corporate bond fund (F). Only 74% will ever be invested in the G Fund.

That's why I said having 100% in G at all times because someone might afraid of market fluctuations is penny wise and pound foolish.

[GreenGene]

My TSP allocation is 2/3 in L2040 and 1/3 in the F fund .... although sometime after Labor Day, that 1/3 will be going into the S fund. And I'm already retired! But since I won't be drawing on the TSP money until I have to (age 70 1/2, about 13 years from now), I don't see any reason not to have some (actually, most) of my TSP money in stocks. I suspect that even when I start to withdraw the money, I'll have some percentage in stocks.

[Mick St John]

Originally Posted by juniperbleu

I think if you were to choose the Lifetime Fund option, that's basically what it has you do closer to retirement. In your younger years you play around with the International markets and such, but as you go along they put more and more in more stable investments.

Exactly. One can afford to take more risk early on. I'm very close to retirement now, so my money will be in a risk free environment.
The mistake some people make is having insufficient funds at retirement and having to depend on growth during their retirement years.
On the other hand, we're all getting clowned by our government by the pathetic interest rates currently available.