Author Topic: Any FERS + TSP FIRE folks out there?  (Read 54203 times)

DoNorth

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Re: Any FERS + TSP FIRE folks out there?
« Reply #200 on: May 14, 2019, 09:26:55 AM »
Agree with pretty much everything you mention.

As a military (medical) retiree receiving a pretty substantial pension, term federal employment overseas in short stints has been good.  Fixed duration, I live in cool places, LQA and post allowance is good and quality of life tends to be way better than in the US.

For my friends who left military service, bought back their time and went in to the reserves, its also a very good deal.  Every few years, they do a tour a duty and continue their step increases etc., while maximizing their benefits while being mobilized.

For others who do jobs that aren't available in the private sector and its a calling for them, I think it makes sense as well.  For many others, its golden handcuffs like you say.  Even now, I want to extend overseas 6 months so my kids can finish school and it looks like the only option I'm being given is a 2 year extension with a take or leave it mentality.

In what way do you mean more freedom?  Just in terms of bureaucracy and more freedom to innovate and figure out the best ways to solve issues?

That's certainly part of it.  I found the entire environment a bit stifling at times.  They were very big on "staying in your lane" and not speaking uncomfortable truths.  Problems were sometimes covered up to protect powerful people.  And yes, the bureaucracy was momentous.

But I also meant freedom to retire early.  The FERS pension is a decent deal if you work until traditional retirement age and were hired before 2012.  But if you want to retire early, like virtually everyone here, it sucks.  It's golden handcuffs of the worst sort, where they yank out one of the legs of that three-legged stool if you dare to contravene the accepted career timeline.  Stay forever and you're taken care of.  Do anything else and you're fucked.  It's a prison.

There are other reasons to choose a career in federal service, of course.  The paychecks used to be more reliable than the private sector, until Congress started using furloughs as bargaining chips.  You can genuinely make a difference in your own country by directly making it better with the work of your own hands.  I found a certain level of professional respect came with the title, and sometimes you get to play with top secret stuff.  But I don't think any new hires should choose a federal career for the money, because the starting pay stinks and the raises are worse.  You definitely shouldn't choose a federal career if you're trying to RE.  If you really love government work, state government seems like a much better place to pursue that goal.

Peachtea

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Re: Any FERS + TSP FIRE folks out there?
« Reply #201 on: May 14, 2019, 07:17:14 PM »
It's even worse than you've calculated, peachtea, because the FERS pensions actually pay out at closer to 6% due to being an aggregated annuity, not an individual plan.  The also "invest" it in the G fund for you.  I agree that the all new hires who are putting in 4.4% towards their pension are universally getting screwed, unless they work until normal retirement age. 

Then lets not forget all those years of zero pay increases over the past decade.  I don't see why anyone would want to work for the federal government anymore.  You can make much more money, and have more freedom, at equivalent private sector jobs.  Unfortunately, I think federal employment only appeals to the laziest of applicants these days, people who want to get on and then do fuck all for 30 years until they can collect that pension.  If you're talented and motivated, you're virtually guaranteed to do better for yourself at virtually any alternative employer.

Yeah, I definitely think the pension is garbage and the health plans expensive. So I don’t view the benefits as golden handcuffs and will happily skip away to FIRE instead, hopefully in 8 more years (at 13 years of service). That’s not to say however that I don’t have any golden handcuffs...I do and its name is PSLF. But there’s only 5.5 years left to that handcuff instead of 28 years to MRA. (I don’t want to derail the thread with a PSLF convo, I’m dotting all my “I”s and have done the math a hundred ways to Sunday.)

I took my job because I wanted to do public interest work and make a difference. Of the public interest legal jobs, federal pays the most. I really thought I was going to have my cake and eat it too - do some good while making a decent salary. I was pretty happy the first few years although slowly grew disillusioned. I don’t feel I’m making the difference I wanted to and that sucks, along with the bureaucracy and politics. But I’m doing no harm which I think is not nothing for an attorney. ;)

I could have made gobs more in the private sector and raced to FIRE but those jobs don’t align with my values whereas my agency’s mission does. My private sector attorney friends, except one anomaly, all seem resigned to miserable, even those that very rarely work more than 50 hours/week. (Although maybe they say the same about me these days lol.) Even if I jump to a very high paying firm job now, it will only shave 3 years off my time to FIRE because of my 250k in SL I’d then have to pay off. I’ll take 8 more years where I’m at rather than 5 years of being extra miserable at a higher paid job. But yes, if I had started in that kind of job 5 years ago and knew about FIRE then, I could have been in and out of employed work much more quickly.

Treeclimber65

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Re: Any FERS + TSP FIRE folks out there?
« Reply #202 on: May 21, 2019, 03:26:22 AM »
Interesting discussion the last few weeks. I agree with @sol about wanting more freedom and not being in the bureaucratic meat grinder.

At my current age (38), I will have 15 years in, can collect a pension in 10 years at 48 with 25 yrs of service, and full blown retirement in 12 years (50). Yes I am LEO. The main reason for me to stick it out in my current position until 50 is access to my TSP without penalty. If I leave LEO status before 50, I lose the ability to access the TSP penalty free.

Noooowww...I am working on side hustles (REI, farming, woodcraft, etc.) that hopefully will produce an income equivalent to what I would withdraw from the TSP. This would make the "TSP Golden Handcuffs" issue moot and I would bounce at 48 with a 39% Pension + RSA.

There is a way to retire prior to age 50 and access your TSP penalty free. It's called a 72t withdrawal.  However, it does have a lot of restrictions and might not work for somebody your age.  I recently did an early out at 53, and am using a 72t to access my TSP.  I'm not a LEO so I could not get penalty free withdrawals from my TSP till age 55, but I didn't want to wait till 55 to retire.  Anyway, you might look up the 72t process. 

Johnny Aloha

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Re: Any FERS + TSP FIRE folks out there?
« Reply #203 on: June 21, 2019, 01:14:30 PM »
It's even worse than you've calculated, peachtea, because the FERS pensions actually pay out at closer to 6% due to being an aggregated annuity, not an individual plan.  The also "invest" it in the G fund for you.  I agree that the all new hires who are putting in 4.4% towards their pension are universally getting screwed, unless they work until normal retirement age. 

Then lets not forget all those years of zero pay increases over the past decade.  I don't see why anyone would want to work for the federal government anymore.  You can make much more money, and have more freedom, at equivalent private sector jobs.  Unfortunately, I think federal employment only appeals to the laziest of applicants these days, people who want to get on and then do fuck all for 30 years until they can collect that pension.  If you're talented and motivated, you're virtually guaranteed to do better for yourself at virtually any alternative employer.

Yeah, I definitely think the pension is garbage and the health plans expensive.

Grass is always greener.  To take an alternative view, check out this discussion (there are many others) on bogleheads: https://www.bogleheads.org/forum/viewtopic.php?t=280687

You can see there are people making $300k who would be happy to trade the salary for $100k plus the pension/healthcare.  Granted, bodlgeheads is a different crowd, but still.

sol

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Re: Any FERS + TSP FIRE folks out there?
« Reply #204 on: June 21, 2019, 01:51:43 PM »
You can see there are people making $300k who would be happy to trade the salary for $100k plus the pension/healthcare.  Granted, bodlgeheads is a different crowd, but still.

Those people are dumb.  If you make $100k/year then the pension is worth between 4k and 8k per year, depending on when you were hired, and the subsidized healthcare is worth between $10k and $20k/year depending on what plan you get.  A person making $300k/year is going to pay up to $80k in additional taxes in a worst case scenario, so by my math there is still at least a $92,000/year advantage to making 300k over making 100k with federal benefits.

I'd be interested to see who is willing to make that trade, but not interested enough to go read bogleheads.

Johnny Aloha

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Re: Any FERS + TSP FIRE folks out there?
« Reply #205 on: June 24, 2019, 07:22:26 AM »
You can see there are people making $300k who would be happy to trade the salary for $100k plus the pension/healthcare.  Granted, bodlgeheads is a different crowd, but still.

Those people are dumb. 

I have a hard time believing people making $300k are dumb.  Yeah, I get the math and don't disagree ... but when you factor in the stress, hours, travel, and uncertainty of work at that level, that's why people are willing to make the tradeoff.  It's not because they are dumb.