Working for the Government: JV or All Mustachian?

[EngiNerd]

I recently posted a thread discussing a job prospect and I realized the major conflict I am dealing with is deciding to stay with government work or build experience more suited for employment in the private sector.

http://forum.mrmoneymustache.com/ask-a-mustachian/job-prospect-civilstructural-eng-emphasis-but-all-advice-is-welcomed/

A few points for All Balls Mustachian
*You usually work less hours and get paid less annually (possibly more per hour though).  Therefore you have more of your life to focus on non-work matters and generally won't chase luxury shiny consumer items in an effort to keep up with the Jones.  Also, with more time and less money you are more likely to take on DIY projects and enjoy building varies skill sets throughout your career. 
*Your career is probably not quite as stressful or competitive, so likely you are happier in your day to day life and again are not always focused on getting ahead in the rat race. 
*Traditionally, because of pension plans, was a great route to relatively early retirement.  However, if you are a good saver/investor it is likely you could reach FIRE sooner with a matching 401K than qualifying for the pension plan. 
*Often times you can work an alternate work schedule and lengthen your weekends.  Every mustachian would enjoy one less work day and commute.
*Less expensive Wardrobe

A few cases for JV:
*You are sacrificing earning potential for security therefore quite possibly delaying FIRE.
*Private sector probably has the top echelon of the industry, by working with the best you will be more motivated and accelerate your learning curve.
*Less political BS and bureaucratic paperwork
*In the private sector people are more likely to be promoted based on their value.  This leads to more self reliance/competency.

So those are just a few points please feel free add to the case for either. 

[CommonCents]

I work for the government now, and worked previously in the private sector.

Wardrobe isn't really that different
Smart people in government (it gets a bad rap I think)
Not necessarily less stressful - my work is dealing with encouraged early retirements leading to more work for the rest of us remaining, plus the possibility of layoffs.  There's always high priority projects we have to juggle.  At switches in leadership adds to the pressure (as priorities shift, adding new projects w/o taking away old ones).

[tj]

If you are working an average joe job, you're probably better off in the public sector because the jobs pay the same and you get a pension.

If you're in a specialty field or very good at selling (yourself), might be better off in private sector.

[forummm]

There's a difference between state, federal, and local government. And pensions are generally not that lucrative for early retirees (e.g. not paying out and not indexing for inflation until retirement age, so 10 years of $100k employment ending at 35 might yield something like $4k/year in pension in today's dollars starting 25-30 years from RE if inflation is minimal). And you can still work in government work without being a government employee if you are a contractor. So you have the same atmosphere and similar work projects, but different career trajectory and compensation and more work variety.

[Dee18]

I worked for the government 8 years before switching to private.  I worked many, many more hours per week for the government.  The people I worked with were smart and fun to work with.  We were young, but had tremendous authority and responsibility....very exciting and a great opportunity to learn a lot and grow professionally.  I left because I wanted more free time, and a more flexible schedule down the road for parenting.  I think "government jobs" encompasses as many variations as "private jobs."

[DeltaBond]

I don't know what "JV" stands for, but I work for the federal government and jobs within the federal government are different. 

In my department -
- medical insurance is better
- salary is twice that of people doing my same job in the private sector
- matching retirement fund
- separate pension aside from retirement fund
- no layoffs in my department unless you get on the news for embezzlement

I'm here to stay, early retirement or not.

[KisKis]

I agree that government jobs get a bad rap.  Pay is often not as high as private sector, but the benefits are typically better and you can still climb quickly to a sufficient salary if you have those skills.  If you are the type of mustachian who eschews urban life, government jobs may actually be the best in your area, as the best competitive private industries tend to set up shop in metropolitan areas.  You also have access to the 457b, which is awesome.

The one major downside is the constant raising of minimum retirement age for pensions (in many states) when your goal is ER.  Luckily, I can draw pension immediately upon 25 years worked regardless of age; however, those hired after 2013 in my state have to reach a minimum age of 62 before they can collect pension payouts.  On the other hand, 25 years of service puts me in my 40s and we will be FI in a few more years in our late 30s.  I have promised DH that he can retire as soon as we hit FI, but I feel obligated to keep working the additional 10 years because the pension is too good to waste.  It's a sad mustachian problem. 

[northernlights]

I'm a government lawyer (the worst of the worst!) and for where we reside, it's definitely mustachian. The pay is far better than 90% of private sector positions and there actually are benefits. Hours are equally bad, but the knowledge you'll actually get paid and the benefits make up for it, in my mind. Plus, I qualify for PSLF, which is going to save us about $45,000 in loan payments.

[Frugal Consumerist]

I work for the government and I have the same internal struggle. But I work with a smart group in the government (MBAs from good schools) so that is a big help. Seeing the waste around me, however is not. All in all I'd say it's more all balls than JV because of the decent pay and great work life balance/perks.

By the way, are you by any chance a fan of DFG?

I recently posted a thread discussing a job prospect and I realized the major conflict I am dealing with is deciding to stay with government work or build experience more suited for employment in the private sector.

http://forum.mrmoneymustache.com/ask-a-mustachian/job-prospect-civilstructural-eng-emphasis-but-all-advice-is-welcomed/

A few points for All Balls Mustachian
*You usually work less hours and get paid less annually (possibly more per hour though).  Therefore you have more of your life to focus on non-work matters and generally won't chase luxury shiny consumer items in an effort to keep up with the Jones.  Also, with more time and less money you are more likely to take on DIY projects and enjoy building varies skill sets throughout your career. 
*Your career is probably not quite as stressful or competitive, so likely you are happier in your day to day life and again are not always focused on getting ahead in the rat race. 
*Traditionally, because of pension plans, was a great route to relatively early retirement.  However, if you are a good saver/investor it is likely you could reach FIRE sooner with a matching 401K than qualifying for the pension plan. 
*Often times you can work an alternate work schedule and lengthen your weekends.  Every mustachian would enjoy one less work day and commute.
*Less expensive Wardrobe

A few cases for JV:
*You are sacrificing earning potential for security therefore quite possibly delaying FIRE.
*Private sector probably has the top echelon of the industry, by working with the best you will be more motivated and accelerate your learning curve.
*Less political BS and bureaucratic paperwork
*In the private sector people are more likely to be promoted based on their value.  This leads to more self reliance/competency.

So those are just a few points please feel free add to the case for either.

[EngiNerd]

I don't know what "JV" stands for, but I work for the federal government and jobs within the federal government are different. 

In my department -
- medical insurance is better
- salary is twice that of people doing my same job in the private sector
- matching retirement fund
- separate pension aside from retirement fund
- no layoffs in my department unless you get on the news for embezzlement

I'm here to stay, early retirement or not.

JV is junior varsity.  Paid twice as much!?!?! Dang, I assume it must be crazy competitive to get a job with your Department.  Do you mind if I ask your industry?

The people I worked with were smart and fun to work with.  We were young, but had tremendous authority and responsibility....very exciting and a great opportunity to learn a lot and grow professionally.  I left because I wanted more free time, and a more flexible schedule down the road for parenting.  I think "government jobs" encompasses as many variations as "private jobs."

Good point, as a structural engineer I was given more responsibility early in my career than my peers in the private sector, that is for sure.

If you're government, you may also have access to a 457, which is a huge boon for early retirees or, really, anybody.

My fees are good and I can withdraw from it without penalty if I leave, is there something else I am unaware of?

I work for the government and I have the same internal struggle. But I work with a smart group in the government (MBAs from good schools) so that is a big help. Seeing the waste around me, however is not. All in all I'd say it's more all balls than JV because of the decent pay and great work life balance/perks.

By the way, are you by any chance a fan of DFG?

Not really a fan, but I occasionally listen to Carolla's show and the whole JV or All Balls bit is pretty good, and a perfect way to phrase the question of our struggle.  I too work with smart people in my division and that helps, however there is waste in my agency and some of the engineers there are only an engineer by diploma.  I have friends and future in-laws who are a more work/success oriented, entrepreneur type of person who I know loathe government for it's wastefulness and therefore probably judge my choice of employer.  Sometimes I wonder if it would be better to live the life of a driven entrepreneur,  I imagine you would have a sense of purpose, intense motivation, and pride in your work.  And working longer hours wouldn't be thought of as a negative, but just using your time to work towards your purpose.  But if you're not wired like that I don't think it would be wise to try and fake it.  And the most common death bed regret is working too hard and not stopping and enjoying life... Or so I hear.  And right now I am pretty sure my compensation per hour is greater than my peers in the private sector so I am too leaning towards All Balls. 

[EngiNerd]

You can max it and a 403b or 401k, which gives you way more tax advantaged space than most private sector workers.

I don't think my employer offers a 403b or 401k.  Is there a way I can open one for myself or something?

[wordnerd]

Depends on your field. For some fields (e.g., public health, social work), government (especially, federal) employment is probably highest the pay you could get and still affords a balanced lifestyle in most cases.

As the Shocking Simple Math (tm) tells us, though, FIRE is really about savings rate, so work-life balance seems like the key. If you're able to cook your meals, shop for deals, pursue hobbies, think about the future, havethe mental energy to optimize your lifestyle, you're well-positioned for Mustachianism. This is not true for all government jobs; the inverse is not true for all non-government jobs. But, it's probably more likely in government.

[EngiNerd]

You can max it and a 403b or 401k, which gives you way more tax advantaged space than most private sector workers.

I don't think my employer offers a 403b or 401k.  Is there a way I can open one for myself or something?

If you have freelance income you can open and fund a solo 401k. I've done it. It's easy.

Awesome.  Can you put more money into this 401K than your freelance business makes?  I currently do not have a side hustle though I plan on renting out my house and maybe getting another rental in the future. Could I open a solo 401K and move some of my after tax dollars into it to lower my agi?   

[EngiNerd]

I agree that government jobs get a bad rap.  Pay is often not as high as private sector, but the benefits are typically better and you can still climb quickly to a sufficient salary if you have those skills.  If you are the type of mustachian who eschews urban life, government jobs may actually be the best in your area, as the best competitive private industries tend to set up shop in metropolitan areas.  You also have access to the 457b, which is awesome.

The one major downside is the constant raising of minimum retirement age for pensions (in many states) when your goal is ER.  Luckily, I can draw pension immediately upon 25 years worked regardless of age; however, those hired after 2013 in my state have to reach a minimum age of 62 before they can collect pension payouts.  On the other hand, 25 years of service puts me in my 40s and we will be FI in a few more years in our late 30s.  I have promised DH that he can retire as soon as we hit FI, but I feel obligated to keep working the additional 10 years because the pension is too good to waste.  It's a sad mustachian problem. 

So you plan to keep working after FI just because you are close to the pension and emotionally invested in it. 

That's a problem I can easily envision happening to myself.  A mustachian catch 22. Working a great government job that allows you to enjoy the work life balance while maintaining a good savings rate.  If you know you can easily live the good life off your pension alone, why maintain such a diligent focus on saving/investing/making side money.  But If you don't focus on living frugally your lifestyle expense could creep up to where you feel limited by living off of your pension alone.  All in all it's always better to have more than not enough $, I doubt I'll ever look back and wish I spent more money on consumer shit just because I ended up with a pension that pays for my day to day while my stache continues to grow with little utility. 

[KisKis]

I agree that government jobs get a bad rap.  Pay is often not as high as private sector, but the benefits are typically better and you can still climb quickly to a sufficient salary if you have those skills.  If you are the type of mustachian who eschews urban life, government jobs may actually be the best in your area, as the best competitive private industries tend to set up shop in metropolitan areas.  You also have access to the 457b, which is awesome.

The one major downside is the constant raising of minimum retirement age for pensions (in many states) when your goal is ER.  Luckily, I can draw pension immediately upon 25 years worked regardless of age; however, those hired after 2013 in my state have to reach a minimum age of 62 before they can collect pension payouts.  On the other hand, 25 years of service puts me in my 40s and we will be FI in a few more years in our late 30s.  I have promised DH that he can retire as soon as we hit FI, but I feel obligated to keep working the additional 10 years because the pension is too good to waste.  It's a sad mustachian problem. 

So you plan to keep working after FI just because you are close to the pension and emotionally invested in it. 

That's a problem I can easily envision happening to myself.  A mustachian catch 22. Working a great government job that allows you to enjoy the work life balance while maintaining a good savings rate.  If you know you can easily live the good life off your pension alone, why maintain such a diligent focus on saving/investing/making side money.  But If you don't focus on living frugally your lifestyle expense could creep up to where you feel limited by living off of your pension alone.  All in all it's always better to have more than not enough $, I doubt I'll ever look back and wish I spent more money on consumer shit just because I ended up with a pension that pays for my day to day while my stache continues to grow with little utility.

Agreed.  I also feel like there is no way I will be able to relax on saving the whole time I am working.  It just gives me too much saver's satisfaction.  If I don't max out the Roth IRAs and 457, then I feel like I am wasting opportunity.  I think I can easily let the taxable savings go.  I figure that my late 40s is not too late to start expanding our lifestyle if we end up with the $2M+ I have forecasted, when our annual expenses are currently at $30k.  The FIREcalc results in 100% chance of success through age 100, with an average ending amount of $7M.  It's just silly.  My kids are going to be rich.   

[EngiNerd]

That's what I figured.  I just need to find a way to make 18K on the side!

[EngiNerd]

Agreed.  I also feel like there is no way I will be able to relax on saving the whole time I am working.  It just gives me too much saver's satisfaction.  If I don't max out the Roth IRAs and 457, then I feel like I am wasting opportunity.  I think I can easily let the taxable savings go.  I figure that my late 40s is not too late to start expanding our lifestyle if we end up with the $2M+ I have forecasted, when our annual expenses are currently at $30k.  The FIREcalc results in 100% chance of success through age 100, with an average ending amount of $7M.  It's just silly.  My kids are going to be rich.   

I can totally see that mentality even though I have only paid 5 years into pension fund that requires 28 to qualify retirement at any age.  But to the over analyzer/ engineer in me that type of wealth and stache screams inefficient.  It's like saving up for a sub 1% swr: it doesn't make mathematical sense.  It's hard to turn down the pension but for me I would be 52 when I get 28 years and qualify or I can retire earlier and just leave my contributions in the pension fund and start drawing a reduced amount at 55.  That is only a 3 years later; granted that if I retire at 45 I'd have to wait 10 years to receive anything from my pension.