Author Topic: FERS people-- assuming all proposed changes were to pass...  (Read 3652 times)

sparkytheop

  • Pencil Stache
  • ****
  • Posts: 992
If all the proposed changes to FERS were to pass, without any grandfathering in of current employees, how would that change your retirement plans?

Proposed changes:

No more COLA in retirement (instead of beginning at age 62)
Pension amount based on High 5 (instead of high 3)
Increased FERS contribution (from 1% or 3% to 6% or more)
No more SS supplement

I think it's pretty safe to say we all hope for any changes to only affect new-hires, if anyone, but what if they did pass?

sparkytheop

  • Pencil Stache
  • ****
  • Posts: 992
Re: FERS people-- assuming all proposed changes were to pass...
« Reply #1 on: May 31, 2017, 05:28:20 PM »
Personally, my plans do not change.  It would suck, but I've ran all the numbers through various calculators (tsp, ebis, firecalc, aarp, etc, etc) and, while I may have to reduce in-retirement spending, it would not be enough of a reduction to change my current course.  Due to my own reasons, I figured I'd retire at MRA rather than early (unless, by some miracle, my crew became eligible to retire under early outs), when I'll have 35 years in.

I've also been very lucky to escape a bad environment and jump into a new (but related) career at a new location.  I don't take it for granted that anything can change on a dime, but right now, I really enjoy my schedule, don't mind the work, and have a lot of down-time related perks that I would hate to see go.  My current boss isn't so bad either.

So, the changes aren't enough to make me jump ship with the current job, where, if I was still stuck in my old one, I'd really be considering exiting federal service.  And, I saved big enough, early enough, that I don't plan to change that approach either.

BuildingFrugalHabits

  • Bristles
  • ***
  • Posts: 250
  • Location: Great Plains
  • Living the dream
Re: FERS people-- assuming all proposed changes were to pass...
« Reply #2 on: May 31, 2017, 06:07:44 PM »
I don't see how they could make the changes you've described to existing employees without offering some type of compensation in return.  Not positive but I read somewhere that existing employees would have the option of:

1) "cashing out" their FERs and not participating. Not sure how this would work exactly,
2) continued participation at a higher % contribution.  Basically equivalent to a pay cut,
3) leaving the existing contributions in place but no longer participating at the increased contribution rate. 

FERs is already marginal for Feds planning to ER because since the COLA doesn't start until after you start receiving it.  So an employee that works 10 years and retires at 30 making 75k (70k and 65k in the previous 2 years) would be slated to collect 7k a year starting at age 59.  But by the time that 59 rolls around the 7k would probably have the buying power of 3k ($250/month). 

Social security will probably be a much bigger portion of the old man money at $1,000 bucks a month or so. 

fattest_foot

  • Pencil Stache
  • ****
  • Posts: 856
Re: FERS people-- assuming all proposed changes were to pass...
« Reply #3 on: May 31, 2017, 06:40:50 PM »
If the changes pass, I'm hoping I can opt out. And then get my military buyback back.

It might make it a lot more tempting to hop over to the contractor side, to be honest. I already calculated that $10k in increased salary is my break even point. Each year I get closer to FIRE that number drops.

shunkman

  • 5 O'Clock Shadow
  • *
  • Posts: 51
Re: FERS people-- assuming all proposed changes were to pass...
« Reply #4 on: May 31, 2017, 07:07:01 PM »

FERs is already marginal for Feds planning to ER because since the COLA doesn't start until after you start receiving it. 

I believe that the FERS COLA does not start until age 62.

shunkman

  • 5 O'Clock Shadow
  • *
  • Posts: 51
Re: FERS people-- assuming all proposed changes were to pass...
« Reply #5 on: May 31, 2017, 07:13:17 PM »

No more SS supplement



With 9 months to go this would be the FERS FIRE deal breaker for me.