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General Discussion => Post-FIRE => Topic started by: primozaj on March 02, 2017, 10:40:14 AM

Title: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 02, 2017, 10:40:14 AM
I'm wondering how you did it?  I assume that there is a separated investment account (Roth IRA, taxable account, etc.) involved...  But how does the FERS pension work or does it get delayed to your MRA?  Did you lose out on carrying your health insurance forward because of FIRE or can you pick it up at your MRA?  Were you able to pull from or move your TSP or does it have to sit until your MRA?

I am a fed with 17 years until minimum retirement age that wants to go FIRE, but there are a lot of additional benefits to stay to MRA... I'd like to know for experience how worth it those benefits really are?

Thanks
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Ganon91 on March 02, 2017, 10:52:31 AM
Havent FIRE'd yet, but like you I have a few decades to MRA. Plan is to rollover everything from TSP into T-IRA at separation of service, that way I can do a back-door Roth conversion to avoid income taxes on it.

As for the FERS portion, It'll just be a long wait until MRA to file the retirement paperwork. Sorry I haven't done a breakdown of the pros/cons of sticking it out to MRA (I never considered waiting that long).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on March 02, 2017, 10:56:27 AM
I am an unretired fed who will not make it to his MRA.

I will defer my pension as long as possible.  This means you will lose inflation adjustments every year between retiring and collecting it, which significantly reduces its value.

I will lose health insurance and will not be able to restart it at my MRA, so I will have to buy insurance on the individual market.  This is straightforward under the ACA, but potentially difficult if it gets repealed.

You can transfer your TSP to a traditional IRA without paying taxes or penalties (though the expense ratio will be higher).  From the trad IRA, you can make annual rollovers into your Roth IRA, paying only the taxes in your bottom (hopefully zero) tax bracket.  After five calendar years, rollover amounts can be withdrawn from your Roth without taxes or penalties.  This effectively lets you access your TSP at any age, if you meet all of the conditions.  One condition is having five years of expenses to live on outside of the TSP, while the Roth conversions age.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 02, 2017, 11:14:05 AM
Lucky for me that I already have over 5 years of contributions in my Roth so I could withdrawal some of those while I'm doing the conversion ladder from my tIRA (which will eventually have the TSP money).  You can rollover the TSP once you leave federal service, correct?

I know that if I were to go early I will lose those years of service on my FERS, I'm just don't know how much the health insurance is really "worth" by going early.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: nancyjnelson on March 02, 2017, 11:54:08 AM
I am a retired fed with FERS+TSP, no other investment accounts.  As a Foreign Service officer, my MRA was 50 with 20 years in.  I retired at age 52 with 25 years.  I sold the house in DC and bought a house in Wisconsin.  My oldest was out of college, my youngest started this last year.  (I had pre-paid tuition via VA 529 plan. Since my kid is going to an out-of-state school, VA basically just sends the $$ to the UW-Madison.  It's enough to pay in-state tuition plus a bit more, so I'm just on the hook for room & board).  I continued the health plan.  The TSP is still sitting where I left it; I'll decide what to do with it later.  For right now I get my pension (reduced because I retired so early) plus a small supplement that represents SS.  At age 62 I'll lose the supplement, but gain SS.

Many of my former colleagues are/will be better off than I am - at least on paper.  I don't care.  I have avoided debt, lived below my means, and now have freedom.

Having a real pension is amazing.  I had thought about pulling the plug earlier, but am glad I stayed in.  While government service can be deadly, it can also be amazing because you're looking at the bigger picture.  For example, instead of being worried about making a specific sale (like I would have done in a private company), I was focused on helping ensure certain trade agreements gave American exporters a level playing field. There are a lot of different positions in the government; take the time to find one that's fun and that you can believe in.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: kendallf on March 02, 2017, 01:09:51 PM
I'm a fed with about 6 years to go until my MRA, and the carrot of continued health coverage, immediate pension, and supplemental pension will probably keep me employed until then.

The health coverage is looking like the most valuable part of that right now.  You're eligible to keep coverage and the government keeps paying their portion of your premium (75%) which is huge. 

Add in immediate TSP access without penalty, pension, and the supplemental pension, and my biggest problem will probably be tax avoidance.  First world problems FTW!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 03, 2017, 06:33:02 AM
I'm a fed with about 6 years to go until my MRA, and the carrot of continued health coverage, immediate pension, and supplemental pension will probably keep me employed until then.

The health coverage is looking like the most valuable part of that right now.  You're eligible to keep coverage and the government keeps paying their portion of your premium (75%) which is huge. 

Add in immediate TSP access without penalty, pension, and the supplemental pension, and my biggest problem will probably be tax avoidance.  First world problems FTW!

This is exactly why I am considering sticking it out until my MRA.  I am fortunate that I am a DoD fed so it doesn't look like my employment will get affected by the current administration.

I just ran some extremely rough numbers based on my current High-3 and cost of healthcare... if I make it to age 80 the difference in pension alone (based on my two official ways to retire early) I will collect between $180-360k more by staying to MRA.  If I stayed until my MRA, I estimate that over $500k over my healthcare costs would be covered based on dying at age 80.  So I guess I'd have to do opportunity cost on what my freedom from my job is worth based on these numbers.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on March 03, 2017, 10:08:24 AM
Fed-related question: If an early-out is offered/accepted (for those with 25+ years of service, but under the MRA) would I still have access to the FEHB or is that only available to those who go all the way to MRA?

I was thinking that early-out had all of the benefits of MRA but it occurred earlier (when momentarily offered by the govt). I knew that pension amounts probably wouldn't start until MRA, but was hoping the Healthcare would just continue on without having to leave the FEHB.

FEHB continues under VERA/VSIP.  Even if you haven't been covered for the preceding five years, they grant waivers for VERA.

Edit: FEGLI also continues, though no waivers if you're under five years of continuous coverage.

Edit 2:  this is why the VERA is the holy grail for aspiring early(ish) retirees.  Here's hoping the republicans gut the federal workforce.  Any fed who has 25 years in, at any age, is potentially eligible for winning the retirement lottery.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: SomedayStache on March 03, 2017, 10:12:43 AM
Following.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 03, 2017, 11:06:53 AM

FEHB continues under VERA/VSIP.  Even if you haven't been covered for the preceding five years, they grant waivers for VERA.


Thanks for confirming... I wasn't sure this was the case.  The two early out options would be nice for me with FEHB...  though with a hit to the pension...


 Any fed who has 25 years in, at any age, is potentially eligible for winning the retirement lottery.


... Or 50 years old with 20+ years in, though this may be a rarer form of VERA/VSIP.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on March 03, 2017, 11:15:29 AM
Also of note: the FERS employee who takes a VERA gets their full accrued pension immediately.  No delay, no reductions.  If you started with the feds/army/peace corps at 18, you could get 25% of your high 3 starting at age 43, for the rest of your life.

You do have to forego COLAs until your reach your MRA, though.  It's not nearly as good as a military pension, but it's the closest thing out there.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CheapskateWife on March 03, 2017, 11:29:16 AM
I'm FERS + TSP also.  Our plan involves a complex arrangement of TSP -> tIRA -> Roth IRA conversions.  DH is done with federal service so we are getting the ball rolling by pulling his balance in TSP over to a Vanguard tIRA.  I know, I know..."TSP is the best"...but its withdrawl policies lack the flexibility we need.  So moving to Vanguard we are. 

I'm out in another 1-2 years and we plan to do the same with mine.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 03, 2017, 12:28:02 PM
Also of note: the FERS employee who takes a VERA gets their full accrued pension immediately.  No delay, no reductions.  If you started with the feds/army/peace corps at 18, you could get 25% of your high 3 starting at age 43, for the rest of your life.

You do have to forego COLAs until your reach your MRA, though.  It's not nearly as good as a military pension, but it's the closest thing out there.

I believe you have to forego COLA's until you turn 62.

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: charis on March 03, 2017, 12:53:01 PM
I tried to research this but can't find an answer:  what happens to your contributions to the basic benefit plan after vesting (5 years)?  I know you are entitled to a benefit, but lets say you leave service for good after 7 years, can you take your contributions back?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 03, 2017, 01:02:19 PM
I tried to research this but can't find an answer:  what happens to your contributions to the basic benefit plan after vesting (5 years)?  I know you are entitled to a benefit, but lets say you leave service for good after 7 years, can you take your contributions back?

You can either withdraw it or take a deferred annuity when you turn 62.  https://hr.od.nih.gov/benefits/retirement/fersseparation.htm (https://hr.od.nih.gov/benefits/retirement/fersseparation.htm)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CheapskateWife on March 03, 2017, 01:14:33 PM
I tried to research this but can't find an answer:  what happens to your contributions to the basic benefit plan after vesting (5 years)?  I know you are entitled to a benefit, but lets say you leave service for good after 7 years, can you take your contributions back?

Hi Jezebel....you can take your money out, but it might be more valuable to leave it alone for the time being.  Of course that depends on if your FERS was withheld at the higher 3.1% rate or if you were grandfathered under the old .8%.  The ROI of course is going to be much higher for the .8% annuitant if its left in place for a deferred retirement.  Granted, you need 10 years of service for that.

Are you considering jumping ship?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: charis on March 03, 2017, 02:09:23 PM
I tried to research this but can't find an answer:  what happens to your contributions to the basic benefit plan after vesting (5 years)?  I know you are entitled to a benefit, but lets say you leave service for good after 7 years, can you take your contributions back?

Hi Jezebel....you can take your money out, but it might be more valuable to leave it alone for the time being.  Of course that depends on if your FERS was withheld at the higher 3.1% rate or if you were grandfathered under the old .8%.  The ROI of course is going to be much higher for the .8% annuitant if its left in place for a deferred retirement.  Granted, you need 10 years of service for that.

Are you considering jumping ship?

No, I am only two weeks in.   But I figured that it would be good to know in case something changes in the future.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CheapskateWife on March 03, 2017, 02:29:13 PM
I tried to research this but can't find an answer:  what happens to your contributions to the basic benefit plan after vesting (5 years)?  I know you are entitled to a benefit, but lets say you leave service for good after 7 years, can you take your contributions back?

Hi Jezebel....you can take your money out, but it might be more valuable to leave it alone for the time being.  Of course that depends on if your FERS was withheld at the higher 3.1% rate or if you were grandfathered under the old .8%.  The ROI of course is going to be much higher for the .8% annuitant if its left in place for a deferred retirement.  Granted, you need 10 years of service for that.

Are you considering jumping ship?

No, I am only two weeks in.   But I figured that it would be good to know in case something changes in the future.
One thing I've noticed that a lot of newbies don't understand clearly...you are vested in your pension at 10 years.  HR offices never do a very good job of explaining that, but at 10 years, you can go do something else, and at 57-62 apply for your "deferred retirement".   Keep it in mind, because after 10, you gain a lot of flexibility that you don't have before that.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 03, 2017, 02:39:12 PM
I tried to research this but can't find an answer:  what happens to your contributions to the basic benefit plan after vesting (5 years)?  I know you are entitled to a benefit, but lets say you leave service for good after 7 years, can you take your contributions back?

Hi Jezebel....you can take your money out, but it might be more valuable to leave it alone for the time being.  Of course that depends on if your FERS was withheld at the higher 3.1% rate or if you were grandfathered under the old .8%.  The ROI of course is going to be much higher for the .8% annuitant if its left in place for a deferred retirement.  Granted, you need 10 years of service for that.

Are you considering jumping ship?

No, I am only two weeks in.   But I figured that it would be good to know in case something changes in the future.

Since you just started, the basic benefit plan is withholding 3.1% of your salary.  Over seven years, that'll add up.  For instance, let's say your salary is $100k for seven years.  $100k x 0.031 x 7 = $21.7k that will have been withheld by the time you left; however, the pension will be $100k x 0.01 x 7 = $7k annually, starting at age 62.  Something to thing about.

Also, you only need 5 years of civilian service to be vested in FERS.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: LivlongnProsper on March 03, 2017, 02:41:42 PM

One thing I've noticed that a lot of newbies don't understand clearly...you are vested in your pension at 10 years.  HR offices never do a very good job of explaining that, but at 10 years, you can go do something else, and at 57-62 apply for your "deferred retirement".   Keep it in mind, because after 10, you gain a lot of flexibility that you don't have before that.


You are vested in the pension after 5 years but must wait until age 62 to collect.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CheapskateWife on March 03, 2017, 02:49:06 PM
LivlongnProsper is right about the 5 years (I missed that part in the OPM handbook)...but then you don't have the option of drawing your pension any earlier than 62.

10 years means you can start drawing at your MRA (57) with a reduction...but again, its more flexible.

Or you could just take your cash and run.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on March 05, 2017, 06:54:58 AM
Fed-related question: If an early-out is offered/accepted (for those with 25+ years of service, but under the MRA) would I still have access to the FEHB or is that only available to those who go all the way to MRA?

I was thinking that early-out had all of the benefits of MRA but it occurred earlier (when momentarily offered by the govt). I knew that pension amounts probably wouldn't start until MRA, but was hoping the Healthcare would just continue on without having to leave the FEHB.

FEHB continues under VERA/VSIP.  Even if you haven't been covered for the preceding five years, they grant waivers for VERA.

Edit: FEGLI also continues, though no waivers if you're under five years of continuous coverage.

Edit 2:  this is why the VERA is the holy grail for aspiring early(ish) retirees.  Here's hoping the republicans gut the federal workforce.  Any fed who has 25 years in, at any age, is potentially eligible for winning the retirement lottery.

Keep in mind that there are potentially two types of early-outs.  The VERA option that Sol describes above is probably the more common one.  It can come with or without a voluntary separation incentive payment (VSIP). 

The second type of early-out is a stand-alone VSIP.  This is where an agency offers a one-time payment for resigning from federal service to people who do not meet the age/service requirements for VERA .  VSIPs are capped at a maximum of $25k and are subject to income, medicare, and SS taxes.  If you take a VSIP and resign, you are NOT eligible to continue your FEHB benefits beyond the normal COBRA period.

Also important to remember is that if you take a VSIP under either option, you can't be re-employed with any federal agency for 5 years, unless you pay back the full pre-tax amount of the VSIP.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: marion10 on March 05, 2017, 07:43:57 AM
Actually eligible for FERS retirement right now, as is my husband. We are trying to decide what to do. I am in the middle of a training program that I feel an obligation to finish- I expect in the next two years we will pull the plug.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Yabous on March 05, 2017, 05:19:44 PM
I jumped ship at 49 after 14 years of service. The idea of waiting until my MRA was unbearable for me. Bureaucracy and politics. I still think the TSP rocks and will leave my $$ there. I have taxable savings that will get me through and a spouse that loves to work. I will note a side benefit for the parents out there, as my daughter is attending an Ivy League school and our decreased income made us eligible for significantly more financial aid. We pay, but less than half of what we would have if I had continued to work. Is that not crazy??? Not sure when I will tap into the retirement plan. Probably early 60s or so.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Gunny on March 06, 2017, 10:40:20 AM
I FIREd in August 2015 when my Agency offered a VERA/VISP.  I had a cumulative service of 34 years (20 Marine Corps and 14 Fed).  I "bought back" my military service, which only makes since if you were mid-grade enlisted (I retired an E-7) and a high grade civilian (GS-14 in this case).  Buying back my military service immediately made me eligible for the VERA/VISP.  My pension (34% of my high three) covers our living expenses plus a little wiggle room.  At 56 I am eligible for the FERS Special Supplement until age 62.  This is based on the amount of FICA taxes I paid during my 14 years as a Fed.  At 62 the COLA begins on my pension.  I do receive a monthly distribution from my TSP which we use for traveling. Even though I pay a 10% penalty on my TSP distributions, this is a better option for me as the amount I need plus the penalty is less than the lowest amount 72(t) computations allow.  I'm letting my ROTH grow as it will provide the option of paying off my mortgage in a few years if I decide that's the best course of action at the time.  Having been a retired Marine, Tricare continues to be our choice for medical care.  At 65 I will choose Medicare plus Tricare for Life.   
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 06, 2017, 10:53:55 AM
I FIREd in August 2015 when my Agency offered a VERA/VISP.  I had a cumulative service of 34 years (20 Marine Corps and 14 Fed).  I "bought back" my military service, which only makes since if you were mid-grade enlisted (I retired an E-7) and a high grade civilian (GS-14 in this case).  Buying back my military service immediately made me eligible for the VERA/VISP.  My pension (34% of my high three) covers our living expenses plus a little wiggle room.  At 56 I am eligible for the FERS Special Supplement until age 62.  This is based on the amount of FICA taxes I paid during my 14 years as a Fed.  At 62 the COLA begins on my pension.  I do receive a monthly distribution from my TSP which we use for traveling. Even though I pay a 10% penalty on my TSP distributions, this is a better option for me as the amount I need plus the penalty is less than the lowest amount 72(t) computations allow.  I'm letting my ROTH grow as it will provide the option of paying off my mortgage in a few years if I decide that's the best course of action at the time.  Having been a retired Marine, Tricare continues to be our choice for medical care.  At 65 I will choose Medicare plus Tricare for Life.   

If you have reached your MRA, you won't have to pay the 10% penalty on the TSP distributions, except for the portion that's a due to ROTH earnings until you're 59-1/2.  I'm in the same boat.  The Roth portion of my TSP is only about 1% of the total, and the earnings on the Roth portion is only about 10% of that. So, in essence, I'll be paying the 10% penalty on about 0.1% of my TSP distributions until I'm 59-1/2.  Too small of an amount to be concerned with.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Gunny on March 06, 2017, 12:40:59 PM
Haven't reach MRA, and as I understand it, since I did not reach MRA when I retired, I will owe a 10% penalty on TSP distributions until I am 59.5 yo. 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 06, 2017, 01:27:54 PM
I'm a fed with about 6 years to go until my MRA, and the carrot of continued health coverage, immediate pension, and supplemental pension will probably keep me employed until then.

The health coverage is looking like the most valuable part of that right now.  You're eligible to keep coverage and the government keeps paying their portion of your premium (75%) which is huge. 

Add in immediate TSP access without penalty, pension, and the supplemental pension, and my biggest problem will probably be tax avoidance.  First world problems FTW!

Yep, same here, but only 2 years to go. In addition to the immediate FERS pension, I'll get the supplement for about 9 years, and I'll have access to my TSP immediately because I'm LEO and retiring after age 50. Tax avoidance will indeed be my biggest problem. Because of my pension, a Roth ladder doesn't really do me any good, though I do plan to work part time in a hobby job, and my wife will still be working for several more years and at that point we'll be back below the Roth threshold, so we can contribute to our Roth IRAs.

OP, if you've got at least 10 years in, then you are eligible for a pension when you reach your MRA (based on birth year/month), but as Sol pointed out, you will receive no COLAs on that pension until you begin collecting it at your MRA.  And no FEHB.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 06, 2017, 01:30:29 PM
I'm FERS + TSP also.  Our plan involves a complex arrangement of TSP -> tIRA -> Roth IRA conversions.  DH is done with federal service so we are getting the ball rolling by pulling his balance in TSP over to a Vanguard tIRA.  I know, I know..."TSP is the best"...but its withdrawl policies lack the flexibility we need.  So moving to Vanguard we are. 

I'm out in another 1-2 years and we plan to do the same with mine.

TSP is exploring expanding withdrawal options. Might be in place within that 1-2 year period.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 06, 2017, 01:36:25 PM
Haven't reach MRA, and as I understand it, since I did not reach MRA when I retired, I will owe a 10% penalty on TSP distributions until I am 59.5 yo.

I'm not aware of any MRA exception to early withdrawal penalties for TSP.  Only ones I'm aware of are LEO (retired in the year of or after 50th birthday), retired in the year of or after your 55th birthday for non-LEO, and 72t withdrawals.  Do you have an IRS or OPM source for this?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 06, 2017, 03:12:10 PM
I'm 46, with 21 yrs federal service.... so 11 years under MRA.  I definitely won't make it at my agency, since our leadership is clueless and we're wrought with a horrible culture of passive aggressiveness and crap politics.  Was leaning toward full FIRE this year, but with the mystery of what will happen to the ACA, I'm now trying to negotiate a part-time position to keep my healthcare. 

The carrot of the FEHB for life with full fed retirement is so tempting, esp since healthcare is so f'ed up in America.  But wasting away another 11 years in a windowless office (I'm in the intel/DoD business - we don't even have windows) when I really want to be out climbing and riding my bikes, scares me. I'm at my peak of health and fitness now, I want to enjoy the remainder of my 40's....

More and more I'm leaning toward trying to keep a part time federal job to keep accumulating service time and the FEHB, but ideally I want that job to be no more than 16 hrs a week and working outside. I will keep searching....

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 07, 2017, 08:33:38 AM
I'm 46, with 21 yrs federal service.... so 11 years under MRA.  I definitely won't make it at my agency, since our leadership is clueless and we're wrought with a horrible culture of passive aggressiveness and crap politics.  Was leaning toward full FIRE this year, but with the mystery of what will happen to the ACA, I'm now trying to negotiate a part-time position to keep my healthcare. 

The carrot of the FEHB for life with full fed retirement is so tempting, esp since healthcare is so f'ed up in America.  But wasting away another 11 years in a windowless office (I'm in the intel/DoD business - we don't even have windows) when I really want to be out climbing and riding my bikes, scares me. I'm at my peak of health and fitness now, I want to enjoy the remainder of my 40's....

More and more I'm leaning toward trying to keep a part time federal job to keep accumulating service time and the FEHB, but ideally I want that job to be no more than 16 hrs a week and working outside. I will keep searching....

Have you checked USA Jobs for other agencies?  We've had lots of people jump ship here at my agency for other agencies for various reasons (geography, promotion, etc.). And as far as your physical peak, I know plenty of guys still getting after it quite hard in their 50's and 60's.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CanyonMan on March 07, 2017, 11:17:32 AM
Replying to follow.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 07, 2017, 11:32:30 AM

Have you checked USA Jobs for other agencies? 


Unless something has changed over the last few days, I believe that we are still on a hiring freeze due to an executive order.

EDIT:  And I thought that included lateral moves as well as cross agency ones... but maybe not since I just got an email about a USA Jobs posting at Robins AFB.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 07, 2017, 12:48:42 PM
Also of note: the FERS employee who takes a VERA gets their full accrued pension immediately.  No delay, no reductions.  If you started with the feds/army/peace corps at 18, you could get 25% of your high 3 starting at age 43, for the rest of your life.

You do have to forego COLAs until your reach your MRA, though.  It's not nearly as good as a military pension, but it's the closest thing out there.

I believe you have to forego COLA's until you turn 62.

This is correct, whether with an early out or MRA.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 07, 2017, 12:53:09 PM
Haven't reach MRA, and as I understand it, since I did not reach MRA when I retired, I will owe a 10% penalty on TSP distributions until I am 59.5 yo.

I'm not aware of any MRA exception to early withdrawal penalties for TSP.  Only ones I'm aware of are LEO (retired in the year of or after 50th birthday), retired in the year of or after your 55th birthday for non-LEO, and 72t withdrawals.  Do you have an IRS or OPM source for this?

If you are MRA with 30 years of service, there is no penalty.

20 years of service, you have to be 60.

Early outs eliminate the non-MRA penalties and allow you to continue FEHB.  Early retirement on your own does not.

This is a good summary, with links to opm rules:
http://www.federalretirement.net/fers_eligibility.htm#Fers_Eligibility_Charts
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 07, 2017, 02:02:36 PM

Have you checked USA Jobs for other agencies? 


Unless something has changed over the last few days, I believe that we are still on a hiring freeze due to an executive order.

EDIT:  And I thought that included lateral moves as well as cross agency ones... but maybe not since I just got an email about a USA Jobs posting at Robins AFB.

Thanks dude, yes I've been stalking USAJobs for a while now but as primozaj says I don't think it's possible to move now.  The freeze was a 90-day order (from Jan 22nd I think) with the order for OPM to come up with new hiring guidelines thereafter.  So we'll see what comes out in late April.

The hardest part would be trying to find a 16-20 hour position that I wouldn't hate.  In the DC area, there have been lots of store clerk jobs to work at the PX stores on military bases (and I'm not opposed to that kind of work as I did it in my youth), but I'd still rather be outside. Even if that means a physical labor job.  It would be my workout :)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 07, 2017, 02:10:46 PM

Have you checked USA Jobs for other agencies? 


Unless something has changed over the last few days, I believe that we are still on a hiring freeze due to an executive order.

EDIT:  And I thought that included lateral moves as well as cross agency ones... but maybe not since I just got an email about a USA Jobs posting at Robins AFB.

Thanks dude, yes I've been stalking USAJobs for a while now but as primozaj says I don't think it's possible to move now.  The freeze was a 90-day order (from Jan 22nd I think) with the order for OPM to come up with new hiring guidelines thereafter.  So we'll see what comes out in late April.

The hardest part would be trying to find a 16-20 hour position that I wouldn't hate.  In the DC area, there have been lots of store clerk jobs to work at the PX stores on military bases (and I'm not opposed to that kind of work as I did it in my youth), but I'd still rather be outside. Even if that means a physical labor job.  It would be my workout :)

Park Ranger in the PNW.  A utility hand on a DoD project.  Lawns keeper for one of the cemeteries.  Trainee for a trades and crafts field.  General Maintenance (usually takes care of the grounds-- mowing lawns, fixing sprinklers, digging ditches...)  Warehouse (not so much outside, but can be a nice "retirement" job and keep you pretty physical). 

I feel like I hit the jackpot with what I do.  I enjoyed my last job, but worked in a horrendous environment and had a calendar with the days until I was eligible for early retirement marked.  I threw that calendar away a few months after moving to my current job.  If my boss would commit to staying the 19 years until my MRA, I'd feel pretty great about my future here.  He has his flaws, but is the best boss I've ever had. 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 07, 2017, 02:25:02 PM

Have you checked USA Jobs for other agencies? 


Unless something has changed over the last few days, I believe that we are still on a hiring freeze due to an executive order.

EDIT:  And I thought that included lateral moves as well as cross agency ones... but maybe not since I just got an email about a USA Jobs posting at Robins AFB.

Thanks dude, yes I've been stalking USAJobs for a while now but as primozaj says I don't think it's possible to move now.  The freeze was a 90-day order (from Jan 22nd I think) with the order for OPM to come up with new hiring guidelines thereafter.  So we'll see what comes out in late April.

The hardest part would be trying to find a 16-20 hour position that I wouldn't hate.  In the DC area, there have been lots of store clerk jobs to work at the PX stores on military bases (and I'm not opposed to that kind of work as I did it in my youth), but I'd still rather be outside. Even if that means a physical labor job.  It would be my workout :)

Park Ranger in the PNW.  A utility hand on a DoD project.  Lawns keeper for one of the cemeteries.  Trainee for a trades and crafts field.  General Maintenance (usually takes care of the grounds-- mowing lawns, fixing sprinklers, digging ditches...)  Warehouse (not so much outside, but can be a nice "retirement" job and keep you pretty physical). 

I feel like I hit the jackpot with what I do.  I enjoyed my last job, but worked in a horrendous environment and had a calendar with the days until I was eligible for early retirement marked.  I threw that calendar away a few months after moving to my current job.  If my boss would commit to staying the 19 years until my MRA, I'd feel pretty great about my future here.  He has his flaws, but is the best boss I've ever had.

Sparky, that sounds kinda up my alley. I'd be able to keep active and keep my FEHB.  But 20 hours max :)  I know, I'm spoiled.  If this new Republican plan is good and gets enacted, I could still just take the full FIRE plunge, I have the FU money.  It's the healthcare wildcard that keeps me up.  For instance, I found out last week I have a small meniscus tear in my knee and need a routine arthroscopic surgery.  Right now, the MRI was $75 and the surgery will be $150.  If I had a high deductible plan or god forbid COBRA or something, who knows how much I'd be paying.....
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 07, 2017, 03:26:55 PM

Have you checked USA Jobs for other agencies? 


Unless something has changed over the last few days, I believe that we are still on a hiring freeze due to an executive order.

EDIT:  And I thought that included lateral moves as well as cross agency ones... but maybe not since I just got an email about a USA Jobs posting at Robins AFB.

Thanks dude, yes I've been stalking USAJobs for a while now but as primozaj says I don't think it's possible to move now.  The freeze was a 90-day order (from Jan 22nd I think) with the order for OPM to come up with new hiring guidelines thereafter.  So we'll see what comes out in late April.

The hardest part would be trying to find a 16-20 hour position that I wouldn't hate.  In the DC area, there have been lots of store clerk jobs to work at the PX stores on military bases (and I'm not opposed to that kind of work as I did it in my youth), but I'd still rather be outside. Even if that means a physical labor job.  It would be my workout :)

Park Ranger in the PNW.  A utility hand on a DoD project.  Lawns keeper for one of the cemeteries.  Trainee for a trades and crafts field.  General Maintenance (usually takes care of the grounds-- mowing lawns, fixing sprinklers, digging ditches...)  Warehouse (not so much outside, but can be a nice "retirement" job and keep you pretty physical). 

I feel like I hit the jackpot with what I do.  I enjoyed my last job, but worked in a horrendous environment and had a calendar with the days until I was eligible for early retirement marked.  I threw that calendar away a few months after moving to my current job.  If my boss would commit to staying the 19 years until my MRA, I'd feel pretty great about my future here.  He has his flaws, but is the best boss I've ever had.

Sparky, that sounds kinda up my alley. I'd be able to keep active and keep my FEHB.  But 20 hours max :)  I know, I'm spoiled.  If this new Republican plan is good and gets enacted, I could still just take the full FIRE plunge, I have the FU money.  It's the healthcare wildcard that keeps me up.  For instance, I found out last week I have a small meniscus tear in my knee and need a routine arthroscopic surgery.  Right now, the MRI was $75 and the surgery will be $150.  If I had a high deductible plan or god forbid COBRA or something, who knows how much I'd be paying.....

I think some of the grounds keeper jobs are part time.

I had looked into one of the cemetery assistant supervisor jobs in Europe, and actually applied.  It would have been my dream job!  I'm pretty happy where I am, so I'm putting applying for those types of jobs off until DS is moved out and I can become semi-fluent in French.  And I get tired of my job, since I have a pretty sweet deal.

Have to be careful with the part-time.  To keep the FEHB, make sure you are still classified as "permanent".  At least with my job, anything lower than 32 hours/week will increase your portion of the health insurance payment.  Avoid term or temp jobs (you probably know that already...) 

If I had my 25 years in, I'd love to be able to position myself into a job that has a high chance of being RIFed!  That's still another 8 1/2 years out though.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 07, 2017, 03:32:23 PM

Have you checked USA Jobs for other agencies? 


Unless something has changed over the last few days, I believe that we are still on a hiring freeze due to an executive order.

EDIT:  And I thought that included lateral moves as well as cross agency ones... but maybe not since I just got an email about a USA Jobs posting at Robins AFB.

Thanks dude, yes I've been stalking USAJobs for a while now but as primozaj says I don't think it's possible to move now.  The freeze was a 90-day order (from Jan 22nd I think) with the order for OPM to come up with new hiring guidelines thereafter.  So we'll see what comes out in late April.

The hardest part would be trying to find a 16-20 hour position that I wouldn't hate.  In the DC area, there have been lots of store clerk jobs to work at the PX stores on military bases (and I'm not opposed to that kind of work as I did it in my youth), but I'd still rather be outside. Even if that means a physical labor job.  It would be my workout :)

Park Ranger in the PNW.  A utility hand on a DoD project.  Lawns keeper for one of the cemeteries.  Trainee for a trades and crafts field.  General Maintenance (usually takes care of the grounds-- mowing lawns, fixing sprinklers, digging ditches...)  Warehouse (not so much outside, but can be a nice "retirement" job and keep you pretty physical). 

I feel like I hit the jackpot with what I do.  I enjoyed my last job, but worked in a horrendous environment and had a calendar with the days until I was eligible for early retirement marked.  I threw that calendar away a few months after moving to my current job.  If my boss would commit to staying the 19 years until my MRA, I'd feel pretty great about my future here.  He has his flaws, but is the best boss I've ever had.

Sparky, that sounds kinda up my alley. I'd be able to keep active and keep my FEHB.  But 20 hours max :)  I know, I'm spoiled.  If this new Republican plan is good and gets enacted, I could still just take the full FIRE plunge, I have the FU money.  It's the healthcare wildcard that keeps me up.  For instance, I found out last week I have a small meniscus tear in my knee and need a routine arthroscopic surgery.  Right now, the MRI was $75 and the surgery will be $150.  If I had a high deductible plan or god forbid COBRA or something, who knows how much I'd be paying.....

I think some of the grounds keeper jobs are part time.

I had looked into one of the cemetery assistant supervisor jobs in Europe, and actually applied.  It would have been my dream job!  I'm pretty happy where I am, so I'm putting applying for those types of jobs off until DS is moved out and I can become semi-fluent in French.  And I get tired of my job, since I have a pretty sweet deal.

Have to be careful with the part-time.  To keep the FEHB, make sure you are still classified as "permanent".  At least with my job, anything lower than 32 hours/week will increase your portion of the health insurance payment.  Avoid term or temp jobs (you probably know that already...) 

If I had my 25 years in, I'd love to be able to position myself into a job that has a high chance of being RIFed!  That's still another 8 1/2 years out though.

Yep, need the 'permanent' attached to the name. I'm in talks w/my agency now, but as a GS15 senior manager it's tough.  And they told me that my portion of the FEHB would proportionally increase in relation to my reduced hours. In other words, if I work 20 hr weeks, I pay 50% more than I do now.  No biggie, the coverage is still really good and it's WAY cheaper than ACA or other options.

I remember visiting the US cemetery in Luxembourg where Patton rests. We stumbled upon it by accident, it's right by Luxembourg's airport.  They keep those cemeteries immaculate.  That would be an honorable job to say the least!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: doggyfizzle on March 07, 2017, 04:41:28 PM
It's the healthcare wildcard that keeps me up.  For instance, I found out last week I have a small meniscus tear in my knee and need a routine arthroscopic surgery.  Right now, the MRI was $75 and the surgery will be $150.  If I had a high deductible plan or god forbid COBRA or something, who knows how much I'd be paying.....

I'm in the same boat; while I've only got 5 years in as a Fed, I've got almost $300k in my TSP (some money rolled over from a previous 401k), and I'm going to approach FI in a couple years but....the uncertainty of acess to affordable non-employer-sponsored medical insurance really stresses me out, especially now that I have a kid.  One thing I have looked into is taking one (or more) LWOP blocks of 28 days straight so I won't lose healthcare and service time for FERS calculation, but can still get out and really do some stuff from time to time that isn't possible during a 1-2 week vacation.  I started at the exact age to hit 30 years of experience at my MRA (57), and will have also worked 35 years at that point, so there won't be any absent years of service on Social Security benefit computation, but man does it sometimes seem like I'm staring down an abyss when I think about working until 57.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 07, 2017, 04:46:03 PM
It's the healthcare wildcard that keeps me up.  For instance, I found out last week I have a small meniscus tear in my knee and need a routine arthroscopic surgery.  Right now, the MRI was $75 and the surgery will be $150.  If I had a high deductible plan or god forbid COBRA or something, who knows how much I'd be paying.....

I'm in the same boat; while I've only got 5 years in as a Fed, I've got almost $300k in my TSP (some money rolled over from a previous 401k), and I'm going to approach FI in a couple years but....the uncertainty of acess to affordable non-employer-sponsored medical insurance really stresses me out, especially now that I have a kid.  One thing I have looked into is taking one (or more) LWOP blocks of 28 days straight so I won't lose healthcare and service time for FERS calculation, but can still get out and really do some stuff from time to time that isn't possible during a 1-2 week vacation.  I started at the exact age to hit 30 years of experience at my MRA (57), and will have also worked 35 years at that point, so there won't be any absent years of service on Social Security benefit computation, but man does it sometimes seem like I'm staring down an abyss when I think about working until 57.

My HR dept brought the LWOP policy to my attention. Ours is complicated, but I'm keeping it open as an option.  They're supposed to get back to me with the full policy on it, but it seems kinda promising. And like you said, I think with LWOP you (mostly) keep full benefits.  I still have the problem that I can't do my current job and be gone for long, so I have to find a position/role that requires only sporadic work.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 07, 2017, 09:12:16 PM
Here, we are not *supposed* to use LWOP, but sometimes they allow it.  It's preferred if you keep enough leave on your paycheck to cover your portion of expenses (FEHB, FEGLI, etc) because then you know you are still paying your portion and they *shouldn't* cut you off.  If you don't have enough money on your check to pay those things, you can run into some issues with owing the government money.

If your job is flexible enough, and two weeks off is long enough, maybe see if your boss will allow you to front load/end load two pay periods to get that time off.  I get this built into my schedule every 10 weeks-- Pay Period 1, I work 12 hours/day for 6 days, the next week I work one 8 hour day to get my 80 hours.  Pay period 2, I work one 8 hour day the first week, then 6 12 hour days at the end of the second week.  If I take those two 8 hour days off, I get 16 days off in a row.  I have no idea if you could get away with that, for me it is built into my official schedule.  Sometimes it's really nice to not have to go to work for 16 days and just hang out at home and do what I want.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 08, 2017, 03:24:15 AM
Here, we are not *supposed* to use LWOP, but sometimes they allow it.  It's preferred if you keep enough leave on your paycheck to cover your portion of expenses (FEHB, FEGLI, etc) because then you know you are still paying your portion and they *shouldn't* cut you off.  If you don't have enough money on your check to pay those things, you can run into some issues with owing the government money.

If your job is flexible enough, and two weeks off is long enough, maybe see if your boss will allow you to front load/end load two pay periods to get that time off.  I get this built into my schedule every 10 weeks-- Pay Period 1, I work 12 hours/day for 6 days, the next week I work one 8 hour day to get my 80 hours.  Pay period 2, I work one 8 hour day the first week, then 6 12 hour days at the end of the second week.  If I take those two 8 hour days off, I get 16 days off in a row.  I have no idea if you could get away with that, for me it is built into my official schedule.  Sometimes it's really nice to not have to go to work for 16 days and just hang out at home and do what I want.

Wow thanks for the info and ideas sparky, that sounds like a great way to work the system.  I didn't even consider the issue of having enough money on each check to cover the benes. I'd have no issue paying back my portions of FEHB etc monthy or even every 6 months, but I doubt they'd let me set it up that way.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: MissGina on March 08, 2017, 12:24:13 PM
I'm a fed with about 6 years to go until my MRA, and the carrot of continued health coverage, immediate pension, and supplemental pension will probably keep me employed until then.

The health coverage is looking like the most valuable part of that right now.  You're eligible to keep coverage and the government keeps paying their portion of your premium (75%) which is huge. 

Add in immediate TSP access without penalty, pension, and the supplemental pension, and my biggest problem will probably be tax avoidance.  First world problems FTW!

This is exactly why I am considering sticking it out until my MRA.  I am fortunate that I am a DoD fed so it doesn't look like my employment will get affected by the current administration.

I just ran some extremely rough numbers based on my current High-3 and cost of healthcare... if I make it to age 80 the difference in pension alone (based on my two official ways to retire early) I will collect between $180-360k more by staying to MRA.  If I stayed until my MRA, I estimate that over $500k over my healthcare costs would be covered based on dying at age 80.  So I guess I'd have to do opportunity cost on what my freedom from my job is worth based on these numbers.

This is me too, but I got 19 years until MRA. While I don't like my job, I keep telling myself how blessed and lucky I am to be 19 years away from a pension and healthcare. Positivity is the key! We can make it!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 09, 2017, 06:54:28 AM

This is me too, but I got 19 years until MRA. While I don't like my job, I keep telling myself how blessed and lucky I am to be 19 years away from a pension and healthcare. Positivity is the key! We can make it!

This is what has kept me going all these years.  Now I've got six months to go. :-)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: randommadness on March 09, 2017, 07:30:50 AM
Just hopping in to spread some more FERS+TSP love.

My like worst case is out at 50, with at least $1.2M in TSP, deferred 30 year pension starting at 57. About to hit 11 years in May, a few months before I turn 31. I GOT TIME.

Unfortunately with politics, laws, and not being Nostradamus I can't predict what the healthcare landscape will look like so I'll just be hoping by then I can afford it, even off the Gov teat.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Cycling Stache on March 09, 2017, 07:48:54 AM
Following because I just learned about VSIP from this thread.

I'm currently at 8 years in, and I'm not going to hit any retirement age calculation.  I did not know about the VSIP lump sum payment for those who did not otherwise qualify for early retirement past the minimum retirement age.

The only thing I noted was that $25k sounds good, but it's 2 months of work for me.   So it only makes sense to use when you're about ready to jump anyway.

I do think that VSIP payments are likely, because I believe there was an executive order about trying to accelerate the reduction of the federal work force, and this seems like a good candidate, although I'm sure they'll lead with the early retirement folks since those are typically the highest salaries.

For the annuity, as indicated above, it vests after 5 years.  If you don't hit a minimum retirement age or other qualification, you get it at 62.  It's (number of years employed) times (high 3 average salary) times (1%) for those folks.  I don't think there's a chance that number will renegotiated for already employed workers since it's part of the compensation package.  I view it as a decent supplement to social security, but definitely not something I'm going to work years longer just to increase.

For the health benefit, that does seem like a good deal, especially for those able to get full retirement at an early age.  For the rest of us, though, if retirement is otherwise at 62, isn't that just bridging the gap until Medicare (assuming there's a Medicare, of course)?  I realize the years 62-67 are probably costly for insurance, but I just want to make sure I understand what exactly the benefit is.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: marion10 on March 09, 2017, 09:08:27 AM
Right now ( and who knows what the future will hold) when you retire on an immediate annuity, you get o carry over your FEHB benefits at the same rate (including an employer contribution) as an employee. This is a very good deal. You also have access to open season, so you can change plans each year if another plan suits you better, You can include your spouse and children up to age 26.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 09, 2017, 11:31:44 AM
Also, a couple things to remember re: FEHB: (1) you MUST be in a FEHB plan within the last 5 years of your federal employment; so if you're on your spouse's plan and you want to have FEHB in retirement, you must get into an FEHB plan 5 years before your retirement date; (2) in order for your spouse to carry over FEHB after your death in retirement, you MUST choose a FERS annuity survivor benefit, otherwise your spouse is SOL if you die.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on March 09, 2017, 11:50:47 AM
The continuation of FEHB is only valuable if you make your MRA, or get a VERA, and are too rich to qualify for health insurance subsidies.  For a more typical mustachian, the ACA (or presumably any replacement plan) offers equivalent subsidies to what FEHB provides.  Many folks here will not need or use their FEHB even if they do make their MRA.


The whole point of FERS was to allow federal employees more retirement options than the CSRS handcuffs.  Don't feel like you are stuck until your MRA.  I'm not going to last that long, and I'm happy to give up my FEHB to have decades of my life back.  There are other ways to provide for your healthcare.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 09, 2017, 12:06:40 PM
The continuation of FEHB is only valuable if you make your MRA, or get a VERA, and are too rich to qualify for health insurance subsidies.  For a more typical mustachian, the ACA (or presumably any replacement plan) offers equivalent subsidies to what FEHB provides.  Many folks here will not need or use their FEHB even if they do make their MRA.


The whole point of FERS was to allow federal employees more retirement options than the CSRS handcuffs.  Don't feel like you are stuck until your MRA.  I'm not going to last that long, and I'm happy to give up my FEHB to have decades of my life back.  There are other ways to provide for your healthcare.

True for many Feds, but the golden handcuffs of a 20/25-year LEO retirement, retiring as early 41-42 years old, is pretty damn hard to pass up.  In my case, I'll have done 21.5 years, and retired just before my 54th birthday, but considering the 14 years prior to my Fed career were essentially spent living the FIRE life more or less (military --> college --> law school), I can't quibble with having worked 21.5 years to walk away with a significant pension for life, good health care and a robust 401k, especially since that 21.5 years came with plenty of time off and 40-hour workweeks.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: doggyfizzle on March 09, 2017, 12:14:03 PM
Does anyone know (Dude in particular) if all your years of FERS service need to be in an LEO position to qualify for LEO FERS retirement?  Could you work 19 years as a regular FERS employee and then 1 (or more) years as a LEO and qualify for an earlier than MRA pension?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 09, 2017, 06:49:41 PM
Does anyone know if sick leave is paid out at retirement?
All the materials I've seen are vague but I've heard from retirees that they were either paid out their sick leave or were able to use sick leave for their last several months of work at the DoD.

Unused sick leave is added to your length of service used to determine your pension. For instance, if you retire with 30 years and you have six months of sick leave, your pension is computed using 30 years and six months.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 10, 2017, 07:50:16 AM
Does anyone know (Dude in particular) if all your years of FERS service need to be in an LEO position to qualify for LEO FERS retirement?  Could you work 19 years as a regular FERS employee and then 1 (or more) years as a LEO and qualify for an earlier than MRA pension?

You have to do 20 years in a LEO position.  However, only 3 of those have to be in a primary LEO position, the rest can be in a secondary LEO position.  Take the BOP, for example -- working in a federal prison is a primary LEO position. Once you've done those three years and vested in a LEO pension, you can move to a secondary position, like say, one of the Regional Offices, Central Office, Community Corrections (i.e., halfway houses), one of our Training Centers, etc.  Once you've done 20 years in a LEO position (3 primary, rest secondary), you're good.  After that, if you chose to continue to work in the federal government, you could go work in any non-LEO agency (VA, HHS, DOE, etc) and you still get a LEO pension.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on March 10, 2017, 07:55:33 AM
Does anyone know if sick leave is paid out at retirement?
All the materials I've seen are vague but I've heard from retirees that they were either paid out their sick leave or were able to use sick leave for their last several months of work at the DoD.

Unused sick leave is added to your length of service used to determine your pension. For instance, if you retire with 30 years and you have six months of sick leave, your pension is computed using 30 years and six months.

Correct. For those who've never used their sick leave, it's a good deal if you have a shitload, because it can mean an extra year (or 1%) on your pension, which adds up year after year.  For others (probably most), who've used theirs regularly for sickness, family illness, medical appointments, etc., if you're only carrying a couple months' worth, the decision to burn it down at the end of your tenure is usually the more beneficial one.  What we see a lot in LEO is guys having 3-6 months of sick time left and going out on "stress leave" for the last months of their career.  Essentially, terminal leave.  Not too hard to get a doctor to sign off on it, especially if you've been in a primary LEO position (say, working in a federal prison) all those years.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on March 10, 2017, 08:05:19 AM
Generally speaking, it is usually beneficial to use up all of your annual leave and all of your sick leave before you go, if you can.

Your annual leave is paid out, but not added to your pension.  You sick leave is added to your pension but not paid out.  If you use either kind of leave before retiring, that time is both paid out AND added to your pension.

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 10, 2017, 08:31:42 AM
Generally speaking, it is usually beneficial to use up all of your annual leave and all of your sick leave before you go, if you can.

Your annual leave is paid out, but not added to your pension.  You sick leave is added to your pension but not paid out.  If you use either kind of leave before retiring, that time is both paid out AND added to your pension.

It depends on your circumstances, too.  The lump sum you get from your unused annual leave is a nice retirement bonus if your job is not too stressful and you don't mind not using your annual leave up.  You'll have unlimited "leave" once you retire.  In my case, I'll have about two months of annual leave to cash in this fall.  I could extend my retirement date by two months and use up the leave, but then I'd delay getting my pension and supplement by two months.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 10, 2017, 12:21:47 PM
Another thing to think about as far as using annual leave or cashing it out, is the rate at which it will be paid.  I worked with a guy who had been working a "term promotion" worth about $3/hour more.  He saved up his annual leave to cash it out when he retired, thinking he'd get the higher rate.  When he retired, they cashed out his leave at his permanent rate, rather than the higher rate.  The term promotion did help him on his high three, but he would have made more money taking that annual leave.

With sick leave, to earn a full year on your pension, you basically have to work 20 years without taking any sick leave at all.  To me, that's not worth it.  If the sick leave would bump me into MRA eligibility (by adding time, even if I'm not there age-wise yet), it might be a little more tempting, but it doesn't.  I keep a nice bank of hours, but I have no problem calling in sick.

And can I just say it's nice to be able to discuss this with people in a similar boat?  Most of the people I work with feel like they will never be able to afford being able to retire, plan to work through their 60s, and have a "good luck with that" type response when they find out I'm planning to leave the first date I'm eligible.  The non-coworkers don't understand all the nuances with TSP/fed stuff.  While I'm not trying to get out as early as many here, I understand that process too because I was desperate to get out of my last position, and would have taken a large hit on my retirement just to escape (fortunately it didn't come to that, but I did take a paycut for my current position, and don't regret that decision at all).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 10, 2017, 01:23:37 PM
Does anyone know if sick leave is paid out at retirement?
All the materials I've seen are vague but I've heard from retirees that they were either paid out their sick leave or were able to use sick leave for their last several months of work at the DoD.

I have been reviewing an inch thick retirement book from a two-day class that gets taught at my base from time to time.  Here's a couple quotes about sick leave:

"Employees receive credit for the total number of unused sick leave hours accumulated through their date of retirement.
 - Unused sick leave hours are added to length of service
 - Unused sick leave credit is used only in the computation of the retirement benefit; it is not used to establish retirement eligibility or to calculate the high-3 average salary.
 - There is no limit on the amount of unused sick leave that can be credited."

"Retirement benefits are paid based on a 30-day month; therefore, for computation, all months have 30 days"
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Cycling Stache on March 10, 2017, 04:52:27 PM
Does anyone know if sick leave is paid out at retirement?
All the materials I've seen are vague but I've heard from retirees that they were either paid out their sick leave or were able to use sick leave for their last several months of work at the DoD.

I have been reviewing an inch thick retirement book from a two-day class that gets taught at my base from time to time.  Here's a couple quotes about sick leave:

"Employees receive credit for the total number of unused sick leave hours accumulated through their date of retirement.
 - Unused sick leave hours are added to length of service
 - Unused sick leave credit is used only in the computation of the retirement benefit; it is not used to establish retirement eligibility or to calculate the high-3 average salary.
 - There is no limit on the amount of unused sick leave that can be credited."

"Retirement benefits are paid based on a 30-day month; therefore, for computation, all months have 30 days"

Good information.  Correct that you don't get paid for your sick leave.  But I think what's being suggested is that some people just take most or all of it at the end before they retire.  So they're sick for 3-4 months, etc., then retire shortly after. 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on March 11, 2017, 05:13:49 AM
Generally speaking, it is usually beneficial to use up all of your annual leave and all of your sick leave before you go, if you can.

Your annual leave is paid out, but not added to your pension.  You sick leave is added to your pension but not paid out.  If you use either kind of leave before retiring, that time is both paid out AND added to your pension.

I'd love to do that, but I don't think I can figure out a way to make it work within any kind of reasonable time frame.  I've been hoarding my sick leave like free disability insurance, and have amassed somewhere between six months and a year's worth.  Plus I roll 240 hrs of annual leave over every year.  It would take quite a while to work through all of that while still being effective at my job.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Accidental Fire on March 11, 2017, 06:32:25 AM
I've amassed quite a lot of sick leave in my 21 years of service, but am now using more and more to take car of my elderly mother.  Just taking her to a doctor appointment requires a full day of sick leave, by the time I drive the 1.5 hours, get her there and back, and drive home. I was conservative with my sick leave my whole career and now I have over 1350 hours and the benefit is manifesting itself.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on March 11, 2017, 10:21:04 AM
I don't think I can figure out a way to make it work within any kind of reasonable time frame.  I've been hoarding my sick leave like free disability insurance,

I think I may finally get that surgery I've been postponing.  Recovery could take months!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Gunny on March 14, 2017, 05:13:48 AM
I don't think I can figure out a way to make it work within any kind of reasonable time frame.  I've been hoarding my sick leave like free disability insurance,

I think I may finally get that surgery I've been postponing.  Recovery could take months!

Sol, a job-ectomy?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: fattest_foot on March 14, 2017, 08:41:17 AM
Just keep in mind that with sick leave, it's only if you're doing a traditional retirement under FERS.

If you're going to FIRE and be out before your 30 or MRA, the sick leave does nothing for you.

I've wondered for a while about how to actually handle my sick leave for FIRE. It accumulates so fast that I keep carrying over more and more. I'm not sure how I will go about burning it all up at the end of my career. Hopefully I'll be working for a very understanding supervisor at that point who will be okay with me taking several months off, but I'm not counting on anything.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Cycling Stache on March 14, 2017, 08:50:46 AM
Just keep in mind that with sick leave, it's only if you're doing a traditional retirement under FERS.

If you're going to FIRE and be out before your 30 or MRA, the sick leave does nothing for you.

I don't believe that's true.  You're entitled to an annuity beginning at age 62 so long as you have 5 years of service.  Your annuity is based in part on your years of service, calculated to the nearest month.  Your unused sick leave time is added to your years of service for the annuity formula. 

It's obviously worth more to you if you use it, but it still goes into the calculation if unused.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: JohannaP on March 14, 2017, 12:32:06 PM
Posting to follow, thanks.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: marion10 on March 14, 2017, 08:43:16 PM
Look in the FERS annuity handbook ( google it) - sick leave is not creditable towards a deferred annuity.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on March 16, 2017, 04:42:32 AM
Look in the FERS annuity handbook ( google it) - sick leave is not creditable towards a deferred annuity.

It appears the handbook was last updated in 1998, which was long before the law was changed to allow credit for unused sick leave for FERS employees.  In 1998, no FERS employees got to count sick leave, no matter the circumstances of their retirement.

I did find a couple of third party websites that stated that sick leave is not creditable towards a deferred annuity (for either FERS or CSRS).  That fuckin' sucks.  Wish I had known about that years ago.  Now I have to figure out how to get sick for six months.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: randommadness on March 16, 2017, 07:54:04 AM

And can I just say it's nice to be able to discuss this with people in a similar boat?

This.

Anyway, finally hit my 240 last year. FEELSGOODMAN. Want to keep that going forever. Going to be amazing hitting that 8 hours in 2021.

I also don't stress about my sick leave... I remember being in college and always trying to maintain about 40/40 leave balances, now I'm at like 320 sick hours.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 16, 2017, 08:33:51 AM
I've always viewed sick leave as short term disability insurance.  After 30 years, I'm up to 1200 hours which translates to about six months.  Since I've been blessed with no major health problems that required short term disability, I can now have the sick leave credited to my service length when I retire.  It will add about $60 per month to my pension - not a lot, but it's a nice bonus.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 17, 2017, 11:24:34 AM
Nothing I am finding in this book my colleague loaned me says anything about sick leave not being counted for early or deferred retirement.  Its a book put out (that I referenced before) by the National Institute for Transition Planning.

I also wanted to share this link http://www.myfederalretirement.com/ to see if it might help.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 17, 2017, 09:58:41 PM
First, a quote from fedweek that kind of sums it up

http://www.fedweek.com/retirement-financial-planning/the-impact-of-sick-leave-on-retirement-benefits/

Quote
Further, you won’t get any credit for unused sick leave if you leave government before you are eligible to retire and later apply for a deferred annuity.

Direct from a .gov site, worded a little more vague, but, by stating "immediate annuity" seems to be excluding deferred or postponed annuities:

https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/sick-leave-general-information/

Quote
Unused sick leave will be used in the calculation of an employee's or survivor's annuity based on retirement with an immediate annuity or on a death in service.
(bolding mine)

If you can access EBIS, you should be able to put in various retirement scenarios and can see what will actually happen in your case (I know for MRA calculations, they ask for your sick leave balance, but not sure about a deferred calculation).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Fomerly known as something on March 18, 2017, 12:10:35 AM
Does anyone know (Dude in particular) if all your years of FERS service need to be in an LEO position to qualify for LEO FERS retirement?  Could you work 19 years as a regular FERS employee and then 1 (or more) years as a LEO and qualify for an earlier than MRA pension?

You need 20 as a LEO.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Fomerly known as something on March 18, 2017, 12:26:56 AM
My full retirement LEO in 2025 is one idea but in reality I'm on a month to month program.  (I've hit bare fire but would like more than minimum). I'll make a decision in 2019 (if I make it that far) as to if I'll finish it out.  I'm in a job that gets absolutely hammered every 4 years.  But I'm at max carry over on A/L getting 26 days of it a year and at quite a bit on S/L as shot term disability.  If I make it to age 47 and full retirement I'll have an immediate pension that is more than I need which is why I see 1/2020 as a tipping point if I'm still around it would be stupid imho to stop working at that point.  We'll see.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 18, 2017, 09:01:15 AM
To verify the whole sick leave calculation (will I or won't I for deferred retirement), I did my retirement calculations in EBIS this morning.

With voluntary retirement (MRA + 35 years service), on the "estimate report" page, under "Creditable Service" it showed my sick leave balance as a credit (I just put in 300 hours as a test, giving a credit of 1 month 22 days). 

I did an "edit" changing retirement to Deferred retirement (MRA not met but 30 years service met). Everything else was left the same. Under the "Creditable Service" area, the numbers for sick leave as a credit were "0".

So, no, you can't use unused sick leave to add to your service credit if you defer retirement. (LEO and Postal retirements might be different, mine is just a civilian FERS retirement).

If you haven't played with the calculators on EBIS (employee benefit information system), I highly recommend it.  Each agency has their own link, so I don't really have one to share that would work for everyone.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Loretta on March 18, 2017, 09:15:04 AM
Posting to follow.  I only have about 4000ish more days to go until retirement.  As nutty as Uncle Sugar can be, we are so fortunate to have the great benefits we have.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: QAA on March 19, 2017, 08:57:04 PM
I am a retired fed with FERS+TSP, no other investment accounts.  As a Foreign Service officer, my MRA was 50 with 20 years in.  I retired at age 52 with 25 years.  I sold the house in DC and bought a house in Wisconsin.  My oldest was out of college, my youngest started this last year.  (I had pre-paid tuition via VA 529 plan. Since my kid is going to an out-of-state school, VA basically just sends the $$ to the UW-Madison.  It's enough to pay in-state tuition plus a bit more, so I'm just on the hook for room & board).  I continued the health plan.  The TSP is still sitting where I left it; I'll decide what to do with it later.  For right now I get my pension (reduced because I retired so early) plus a small supplement that represents SS.  At age 62 I'll lose the supplement, but gain SS.

Many of my former colleagues are/will be better off than I am - at least on paper.  I don't care.  I have avoided debt, lived below my means, and now have freedom.

Having a real pension is amazing.  I had thought about pulling the plug earlier, but am glad I stayed in.  While government service can be deadly, it can also be amazing because you're looking at the bigger picture.  For example, instead of being worried about making a specific sale (like I would have done in a private company), I was focused on helping ensure certain trade agreements gave American exporters a level playing field. There are a lot of different positions in the government; take the time to find one that's fun and that you can believe in.

Wow, hello future me. I'm 28. 2 years into my first post. Maxing out TSP and a Roth for a total of 23.5k/yr plus state matching. Hoping to retire at 52. What tips do you have for yourself 20 years ago? Anything you'd do differently? Do I have to TIC out to avoid the reduced pension?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 20, 2017, 07:52:43 AM
To verify the whole sick leave calculation (will I or won't I for deferred retirement), I did my retirement calculations in EBIS this morning.

With voluntary retirement (MRA + 35 years service), on the "estimate report" page, under "Creditable Service" it showed my sick leave balance as a credit (I just put in 300 hours as a test, giving a credit of 1 month 22 days). 

I did an "edit" changing retirement to Deferred retirement (MRA not met but 30 years service met). Everything else was left the same. Under the "Creditable Service" area, the numbers for sick leave as a credit were "0".

So, no, you can't use unused sick leave to add to your service credit if you defer retirement. (LEO and Postal retirements might be different, mine is just a civilian FERS retirement).

If you haven't played with the calculators on EBIS (employee benefit information system), I highly recommend it.  Each agency has their own link, so I don't really have one to share that would work for everyone.

Thanks for doing that.  I should spend more time in EBIS playing with scenarios... but it wasn't until the last couple years that I've even thought about going early.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on March 28, 2017, 09:31:55 AM
New question for my fellow FER-ies/TSP-ers...

Note-- I do *not* plan on doing this, just trying to find out if anyone else has heard of it...

I was just talking to one of my coworkers.  He found out I am helping my son with college by cash-flowing $1k/month (my son is responsible for coming up with the rest).  He told me there is a "secret" third type of TSP loan, that can be used for a dependent's college expenses.

According to him, you get the loan, but your payments are set at a lower tax rate.  You pay it back the same way, but while doing so, the money used to pay it back are taxed at about half the rate.  There is no penalty fee like there would be if you had withdrawn the money.  It is not one of the two better-known loan types (general and residential).

He said he took out a $48k loan for his child this way, but had to talk directly to TSP to do so.

This is completely new to me.  As noted, I don't plan to do this.  Between my son going to a community college for his first two years, the little bit of child support he gets, the Oregon Promise this year (maybe next year, but kind of doubtful), and the money he saves from his part time job, he should have enough to cover his last two years at a state college (including all the extras--food, room, books, etc).  If he can't quite get it covered, he should be able to still come out of it with less than $20k in loans (which I believe he should take out for himself, I'll have already provided quite a bit).  However, it does make me curious to whether or not this really exists, and in what form...
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on March 28, 2017, 09:55:37 AM
New question for my fellow FER-ies/TSP-ers...

Note-- I do *not* plan on doing this, just trying to find out if anyone else has heard of it...

I was just talking to one of my coworkers.  He found out I am helping my son with college by cash-flowing $1k/month (my son is responsible for coming up with the rest).  He told me there is a "secret" third type of TSP loan, that can be used for a dependent's college expenses.

According to him, you get the loan, but your payments are set at a lower tax rate.  You pay it back the same way, but while doing so, the money used to pay it back are taxed at about half the rate.  There is no penalty fee like there would be if you had withdrawn the money.  It is not one of the two better-known loan types (general and residential).

He said he took out a $48k loan for his child this way, but had to talk directly to TSP to do so.

This is completely new to me.  As noted, I don't plan to do this.  Between my son going to a community college for his first two years, the little bit of child support he gets, the Oregon Promise this year (maybe next year, but kind of doubtful), and the money he saves from his part time job, he should have enough to cover his last two years at a state college (including all the extras--food, room, books, etc).  If he can't quite get it covered, he should be able to still come out of it with less than $20k in loans (which I believe he should take out for himself, I'll have already provided quite a bit).  However, it does make me curious to whether or not this really exists, and in what form...

Sounds like he took out a regular TSP loan and put it in a 529 Plan.  There are no taxes on a loan unless you default on it.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: primozaj on March 28, 2017, 10:51:23 AM

He told me there is a "secret" third type of TSP loan, that can be used for a dependent's college expenses.


Everything I am looking up says that it would be a general TSP loan.  I wonder if he got some sort of in-service withdrawal and thought it was a loan.  I'd almost want to call and inquire just to get more information.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: ROF Expat on April 01, 2017, 01:24:34 AM
QAA,

I recently retired from the Foreign Service (coincidentally, at 52) with almost 31 years of service. 

If you're maxing out your TSP and a Roth and presumably living well below your income, you've laid the groundwork for your retirement from the Foreign Service.  The FSPS retirement system is pretty generous and geared toward people retiring relatively early, with the basic minimum for immediate retirement being 20 years of service and 50 years of age.  If you joined at 26, you should be able to retire as early as 46 and draw a full pension.  At that point, you'd get a pension of about 34% of  your high three years average salary (with COLA) plus the snnuity supplement (no COLA and comes with an earned income limit at a certain age) and FEHB for life.  If you retire at 52, you'll get about 40% of your (presumably higher) high three salary, a bigger Annuity Supplenent, and FEHB. 

I don't understand your question about TICing out to avoid a reduced pension.  If you voluntarily leave the service before 20/50, you'll get whatever pension you qualify for, but not until way down the road when you reach a regular retirement age.  I'm not sure what happens if you TIC out before 20/50, but I suspect it is the same.  You can ask RNET.  In any case, to TIC out requires 22 years overall or 15 in a single grade.  By the time  you reach those numbers you would be close to regular retirement age. 

To my knowledge, the exception to the 20/50 rule is opening your window for the Senior Foreign Service.  If you open your window and aren't promoted into the Senior Service within six boards (effectively five years), you must immediately leave the Foreign Service.  If you don't have 20/50, you will still immediately collect your pension at whatever level you have earned without any penalty.  If you joined at 26, you could get promoted to FO-1 in time to open your window before age 45, so this would be a possibility. 

If you are planning on retiring at 52 (or even earlier), you might want to think about your TSP contributions.  I find myself in the position of having a lot of money in the TSP that I can't withdraw until 59-1/2.  This isn't a problem for me, and the money is growing in the meantime.  If your pension and supplement, Roth, and whatever other resources you have will allow you to bridge the gap between retirement and when you can access your TSP funds, I would fully fund the TSP.  If you can't cover the gap, you might consider funding the TSP up to the level of match and then investing the other money in ways that will give you access. 

A few other thoughts geared toward early retirement:

--While you are overseas, save the amount of money you think you'd have to pay in monthly rent in DC.  When you go back to DC you'll have a pile of cash or the downpayment on a home.  Remember that DC is one of the nation's most expensive real estate markets. 

--Avoid serving in DC.  Financially, being overseas is generally much more attractive.

--Consider serving in danger and/or hardship posts.  If you save and invest your differentials, it can add up to a lot of money.  Of course, this has to be balanced by family considerations and the possibility of being shot, blown up, or dying of some horrible tropical disease.  You generally get danger and hardship pay for good reasons. 

Good luck in your Foreign Service career.  I had a lifetime of adventure and hope you do, too.  Keep your head down and be safe.  Most people think we spend our careers wearing dinner jackets and attending cocktail parties.  They have no idea of the lives we and our families actually lead. 

Wow, hello future me. I'm 28. 2 years into my first post. Maxing out TSP and a Roth for a total of 23.5k/yr plus state matching. Hoping to retire at 52. What tips do you have for yourself 20 years ago? Anything you'd do differently? Do I have to TIC out to avoid the reduced pension?
[/quote]
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on April 01, 2017, 04:18:44 AM
If you are planning on retiring at 52 (or even earlier), you might want to think about your TSP contributions.  I find myself in the position of having a lot of money in the TSP that I can't withdraw until 59-1/2.  This isn't a problem for me, and the money is growing in the meantime.  If your pension and supplement, Roth, and whatever other resources you have will allow you to bridge the gap between retirement and when you can access your TSP funds, I would fully fund the TSP.  If you can't cover the gap, you might consider funding the TSP up to the level of match and then investing the other money in ways that will give you access. 

You can always roll your TSP to a tIRA after you leave, then do a Roth conversion pipeline to access it.  Depending on the amount of your other income, you may owe regular taxes on the conversion amounts.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on April 01, 2017, 04:20:40 AM
I don't think I can figure out a way to make it work within any kind of reasonable time frame.  I've been hoarding my sick leave like free disability insurance,

I think I may finally get that surgery I've been postponing.  Recovery could take months!

I had the flu this pay period, so I might actually get to use a few hours of sick leave.  Baby steps.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: ROF Expat on April 01, 2017, 06:51:01 AM
If you are planning on retiring at 52 (or even earlier), you might want to think about your TSP contributions.  I find myself in the position of having a lot of money in the TSP that I can't withdraw until 59-1/2.  This isn't a problem for me, and the money is growing in the meantime.  If your pension and supplement, Roth, and whatever other resources you have will allow you to bridge the gap between retirement and when you can access your TSP funds, I would fully fund the TSP.  If you can't cover the gap, you might consider funding the TSP up to the level of match and then investing the other money in ways that will give you access. 

You can always roll your TSP to a tIRA after you leave, then do a Roth conversion pipeline to access it.  Depending on the amount of your other income, you may owe regular taxes on the conversion amounts.

Monkey Uncle,

I am interested in a Roth IRA for the possible tax advantages (I find it hard to believe that tax rates wouldn't be higher a decade or two from now).  I'm not so interested that I want to take the tax hit on over a million dollars...  Fortunately, since I have a generous pension and a working spouse, I can just let it sit.  Also, I am inclined to stay in the TSP for the G fund option.  If Congress takes that away, I would probably move from TSP to Vanguard.  I think your advice on a transfer is very much worth considering for the previous poster, an FSO who is just starting out. 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Gunny on April 04, 2017, 05:13:40 AM
You can leave your money in TSP and take 72(t) distribution.  It's somewhat restrictive but allows access to money in your TSP penalty free.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: blockzilla on April 04, 2017, 09:11:20 AM
Great thread! I'm going to be 38 years old with just over 15 years as a DoD engineer in August, when I plan to hang it up. I'm actually going on LWOP for up to 2 years, my supervisor has approved with the rationale that my kids are 6 and 4 and I want a couple of good years with them as a sabbatical type thing.  HIGHLY doubt I would come back after two years though, but it is a nice safety net.

My wife wants to continue working so healthcare would be covered. I'm assuming I could just leave everything (~$500K) in TSP, and decide if I want to do a t-IRA later on if I wanted to explore Roth ladder to supplement her income? Or does it need to be done at the time of separation?  I've also thought about the 72t route, but most likely will just leave it all there until MRA.

I did learn that LWOP lets you carry FEHB for up to one year, so I'll have to just pay it from Aug-Oct, then transition the family onto my wife's plan during her fall Open Season.

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: evanc on May 02, 2017, 01:01:25 PM
LivlongnProsper is right about the 5 years (I missed that part in the OPM handbook)...but then you don't have the option of drawing your pension any earlier than 62.

10 years means you can start drawing at your MRA (57) with a reduction...but again, its more flexible.

Or you could just take your cash and run.

Anyone considering drawing at MRA should run the numbers on the penalty (applies for each year under 62). In some cases, it can be quite costly. Just something to be aware of and plan for accordingly (I.e. Have other funds to bridge the gap).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CheapskateWife on May 02, 2017, 02:47:56 PM
LivlongnProsper is right about the 5 years (I missed that part in the OPM handbook)...but then you don't have the option of drawing your pension any earlier than 62.

10 years means you can start drawing at your MRA (57) with a reduction...but again, its more flexible.

Or you could just take your cash and run.

Anyone considering drawing at MRA should run the numbers on the penalty (applies for each year under 62). In some cases, it can be quite costly. Just something to be aware of and plan for accordingly (I.e. Have other funds to bridge the gap).
I ran these numbers assuming that i'll FIRE with 14 years of service and looking at the option of drawing at 57 or drawing at 62.  With the penalty, my break even age for the cumulative income is 75.  It isn't a big enough difference to justify waiting for me.  I've done the same kind of math with SSI and drawing early is a gamechanger for early retirees.  I don't need much, but I do need it early :)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 03, 2017, 04:27:36 AM
LivlongnProsper is right about the 5 years (I missed that part in the OPM handbook)...but then you don't have the option of drawing your pension any earlier than 62.

10 years means you can start drawing at your MRA (57) with a reduction...but again, its more flexible.

Or you could just take your cash and run.

Anyone considering drawing at MRA should run the numbers on the penalty (applies for each year under 62). In some cases, it can be quite costly. Just something to be aware of and plan for accordingly (I.e. Have other funds to bridge the gap).
I ran these numbers assuming that i'll FIRE with 14 years of service and looking at the option of drawing at 57 or drawing at 62.  With the penalty, my break even age for the cumulative income is 75.  It isn't a big enough difference to justify waiting for me.  I've done the same kind of math with SSI and drawing early is a gamechanger for early retirees.  I don't need much, but I do need it early :)

Same here.  cFiresim says DW and I will be able to withstand a larger annual spend if we take FERS and SS as soon as we can.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 04, 2017, 07:11:56 AM
My full retirement LEO in 2025 is one idea but in reality I'm on a month to month program.  (I've hit bare fire but would like more than minimum). I'll make a decision in 2019 (if I make it that far) as to if I'll finish it out.  I'm in a job that gets absolutely hammered every 4 years.  But I'm at max carry over on A/L getting 26 days of it a year and at quite a bit on S/L as shot term disability.  If I make it to age 47 and full retirement I'll have an immediate pension that is more than I need which is why I see 1/2020 as a tipping point if I'm still around it would be stupid imho to stop working at that point.  We'll see.

Also, don't forget that in addition to your FERS pension you will collect the SRS for 15 years (!) if you LEO retire at 47 (i.e., until age 62).  Depending on your salary level and time in service, that's an extra $9-$12k a year (on average -- I know a guy with 31 years that will be getting $19k/year from his SRS!).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 04, 2017, 07:15:38 AM
If you are planning on retiring at 52 (or even earlier), you might want to think about your TSP contributions.  I find myself in the position of having a lot of money in the TSP that I can't withdraw until 59-1/2.  This isn't a problem for me, and the money is growing in the meantime.  If your pension and supplement, Roth, and whatever other resources you have will allow you to bridge the gap between retirement and when you can access your TSP funds, I would fully fund the TSP.  If you can't cover the gap, you might consider funding the TSP up to the level of match and then investing the other money in ways that will give you access. 

You can always roll your TSP to a tIRA after you leave, then do a Roth conversion pipeline to access it.  Depending on the amount of your other income, you may owe regular taxes on the conversion amounts.

The Roth conversion ladder is not nearly as attractive to a retired FERS employee as it is to the early retiree who seeks to live on <$25k/year, because of the pension.  You will be taxed at much higher rates than the Go Curry Crackers of the world.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 05, 2017, 04:42:21 AM
If you are planning on retiring at 52 (or even earlier), you might want to think about your TSP contributions.  I find myself in the position of having a lot of money in the TSP that I can't withdraw until 59-1/2.  This isn't a problem for me, and the money is growing in the meantime.  If your pension and supplement, Roth, and whatever other resources you have will allow you to bridge the gap between retirement and when you can access your TSP funds, I would fully fund the TSP.  If you can't cover the gap, you might consider funding the TSP up to the level of match and then investing the other money in ways that will give you access. 

You can always roll your TSP to a tIRA after you leave, then do a Roth conversion pipeline to access it.  Depending on the amount of your other income, you may owe regular taxes on the conversion amounts.

The Roth conversion ladder is not nearly as attractive to a retired FERS employee as it is to the early retiree who seeks to live on <$25k/year, because of the pension.  You will be taxed at much higher rates than the Go Curry Crackers of the world.

Yeah, I guess if you're planning to stay until your MRA (or close to it) your pension won't leave you much, if any, room for 0% tax Roth pipeline conversions.  But at that point a mustachian should be able to live mostly off the pension (and SS supplement if you stayed to MRA) without drawing much from the stash.  So the taxes you pay to get money out of the TSP, whether through conversions or through waiting until 59 1/2, would fall under the category of "first world problems."
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 05, 2017, 10:43:20 AM
If you are planning on retiring at 52 (or even earlier), you might want to think about your TSP contributions.  I find myself in the position of having a lot of money in the TSP that I can't withdraw until 59-1/2.  This isn't a problem for me, and the money is growing in the meantime.  If your pension and supplement, Roth, and whatever other resources you have will allow you to bridge the gap between retirement and when you can access your TSP funds, I would fully fund the TSP.  If you can't cover the gap, you might consider funding the TSP up to the level of match and then investing the other money in ways that will give you access. 

You can always roll your TSP to a tIRA after you leave, then do a Roth conversion pipeline to access it.  Depending on the amount of your other income, you may owe regular taxes on the conversion amounts.

The Roth conversion ladder is not nearly as attractive to a retired FERS employee as it is to the early retiree who seeks to live on <$25k/year, because of the pension.  You will be taxed at much higher rates than the Go Curry Crackers of the world.

Yeah, I guess if you're planning to stay until your MRA (or close to it) your pension won't leave you much, if any, room for 0% tax Roth pipeline conversions.  But at that point a mustachian should be able to live mostly off the pension (and SS supplement if you stayed to MRA) without drawing much from the stash.  So the taxes you pay to get money out of the TSP, whether through conversions or through waiting until 59 1/2, would fall under the category of "first world problems."

Fortunately, being Fed LEO, I won't have to wait -- I get penalty-free access if I retire at age 50 or after, which will be the case for me.  A Roth pipeline just won't work for me with my pension income.  But I do have a Roth IRA and was able to backdoor $6,500 into it this year, and will continue to do so the next couple years, and when I retire and work part-time at a fun "job" I'll continue to put $6,500/year into it.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: CheapskateWife on May 05, 2017, 12:55:43 PM
See, this is why the forums are freaking awesome!  You all just saved me an ugly surprise about my sick leave not counting if I defer my retirement.  I'm starting to think I'm coming down with something; every other Friday to be precise.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 06, 2017, 04:44:23 AM
See, this is why the forums are freaking awesome!  You all just saved me an ugly surprise about my sick leave not counting if I defer my retirement.  I'm starting to think I'm coming down with something; every other Friday to be precise.

Yeah, I did a quick calculation the other day and figured I've got about $62,000 worth of sick leave banked right now.  Unfortunately I tend to put in so much free time that even if I lay out every other Friday, I wouldn't be using much, if any, sick leave.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: marion10 on May 06, 2017, 06:26:25 AM
You do donate annual leave- not sick
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on May 07, 2017, 05:17:59 AM
Following,,,

I plan to retire sometime after MRA, though I wonder what the Congresscritters plan to do with Federal benefits after they are done with ACA. No guarantee current deal survives.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 09, 2017, 08:40:46 AM
Following,,,

I plan to retire sometime after MRA, though I wonder what the Congresscritters plan to do with Federal benefits after they are done with ACA. No guarantee current deal survives.

Low probability they do anything with current, vested employees.  More likely they grandfather people.  The best guess as to what the "worst case scenario" would be is the Heritage Foundation's plan:

https://www.fedsmith.com/2016/07/16/worst-case-scenario-proposed-cuts-to-federal-pay-and-benefits/

I've got 25 years of service (FERS + military), so even in the worst-case scenario, it looks likely that I'd be grandfathered. I also doubt anything extreme could survive the Senate, but who knows?  Bottom line is, there have been literally scores of proposed changes to the fed retirement system over the past 20+ years, and the vast majority have simply gone nowhere.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 19, 2017, 09:11:32 AM
Article on Feds and FIRE today:

http://www.govexec.com/pay-benefits/retirement-planning/2017/05/can-you-retire-45/137978/?oref=voices-module

Not much there, but she says she's going to get into it more in next article.  Predictably, there are commenters complaining that FIRE for Feds is unrealistic . . .
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 19, 2017, 11:03:53 AM
I agree that it's a little harder for feds, in some respects, but this author totally misses the point when her first bullet point is "earn lots of money".  The whole notion here is that the path to early retirement is about the ratio of your spending to your savings, and is totally independent of the amount of money you earn.  You don't need to be a GS-13 to retire early.  GS-5s can retire in less time than GS-13s can, if they have identical savings rates, because the 5 gets a ton of tax breaks and benefits the 13 doesn't.  It's just harder to hit those high savings rates as a 5.

But comparing (new) feds to equivalent private sector workers, it's a little harder for feds because they pay more of their salary towards a pension that will have little to no value for them.  Early retiring feds would be MUCH better off to just get those pension contributions as salary.  Effectively, the early federal retiree is forfeiting part of their retirement income to subsidize the late-in-life federal retiree, who gets a much better deal.

If you have military service, and a significant fraction of federal civilian employees to, things are a little easier because you at least get pension credit for your service time that got you the job.  I don't get any credit for all of the years I spent in graduate school to get the job, but on the other hand I'm pretty sure I had way more fun in graduate school than anyone ever has in the military.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 21, 2017, 04:31:11 AM
Following,,,

I plan to retire sometime after MRA, though I wonder what the Congresscritters plan to do with Federal benefits after they are done with ACA. No guarantee current deal survives.

Low probability they do anything with current, vested employees.  More likely they grandfather people.  The best guess as to what the "worst case scenario" would be is the Heritage Foundation's plan:

https://www.fedsmith.com/2016/07/16/worst-case-scenario-proposed-cuts-to-federal-pay-and-benefits/

I've got 25 years of service (FERS + military), so even in the worst-case scenario, it looks likely that I'd be grandfathered. I also doubt anything extreme could survive the Senate, but who knows?  Bottom line is, there have been literally scores of proposed changes to the fed retirement system over the past 20+ years, and the vast majority have simply gone nowhere.

Looks like there's a new worst-case scenario benchmark in the Great Cheeto's proposed 2018 budget:

https://www.washingtonpost.com/news/powerpost/wp/2017/05/18/trumps-budget-calls-for-hits-on-federal-employee-retirement-programs/?utm_term=.ed4b31ff63d5 (https://www.washingtonpost.com/news/powerpost/wp/2017/05/18/trumps-budget-calls-for-hits-on-federal-employee-retirement-programs/?utm_term=.ed4b31ff63d5)

Quote
ēIncrease Federal Employee Retirement System (FERS) contributions from workers by 1 percentage point each year until they equal the governmentís contribution. This would take five to six years and would result in increased out-of-pocket payments of about 6 percent over that period. Out-of-pocket payments by federal law enforcement officers would increase by the same amount, but would not equal the greater contributions from law enforcement agencies.
ēBase future retirement benefits on the average of the high five years of salary instead of the current high three
ēEliminate cost of living adjustments (COLA) for current and future FERS employees
ēCut the COLA for Civil Service Retirement System (CSRS) employees by 0.5 percent from what the formula would allowed
ēEliminate supplement payments for FERS employees who retire beginning in 2018. The supplement approximates the value of Social Security benefits for those who retire before age 62.

The increased contribution would suck, but wouldn't be a huge deal for me since I'm not planning to be around much longer.  The high five would also suck, but still wouldn't be a major crimp in my FIRE plans.  And as a deferred annuitant, I wouldn't be getting the SS supplement anyway.  But the elimination of COLAs would really hurt.  Surely that won't pass.  Tell me it won't pass.  Time to join NARFE.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on May 21, 2017, 07:12:27 PM
Following,,,

I plan to retire sometime after MRA, though I wonder what the Congresscritters plan to do with Federal benefits after they are done with ACA. No guarantee current deal survives.

Low probability they do anything with current, vested employees.  More likely they grandfather people.  The best guess as to what the "worst case scenario" would be is the Heritage Foundation's plan:

https://www.fedsmith.com/2016/07/16/worst-case-scenario-proposed-cuts-to-federal-pay-and-benefits/

I've got 25 years of service (FERS + military), so even in the worst-case scenario, it looks likely that I'd be grandfathered. I also doubt anything extreme could survive the Senate, but who knows?  Bottom line is, there have been literally scores of proposed changes to the fed retirement system over the past 20+ years, and the vast majority have simply gone nowhere.

Looks like there's a new worst-case scenario benchmark in the Great Cheeto's proposed 2018 budget:

https://www.washingtonpost.com/news/powerpost/wp/2017/05/18/trumps-budget-calls-for-hits-on-federal-employee-retirement-programs/?utm_term=.ed4b31ff63d5 (https://www.washingtonpost.com/news/powerpost/wp/2017/05/18/trumps-budget-calls-for-hits-on-federal-employee-retirement-programs/?utm_term=.ed4b31ff63d5)

Quote
ēIncrease Federal Employee Retirement System (FERS) contributions from workers by 1 percentage point each year until they equal the governmentís contribution. This would take five to six years and would result in increased out-of-pocket payments of about 6 percent over that period. Out-of-pocket payments by federal law enforcement officers would increase by the same amount, but would not equal the greater contributions from law enforcement agencies.
ēBase future retirement benefits on the average of the high five years of salary instead of the current high three
ēEliminate cost of living adjustments (COLA) for current and future FERS employees
ēCut the COLA for Civil Service Retirement System (CSRS) employees by 0.5 percent from what the formula would allowed
ēEliminate supplement payments for FERS employees who retire beginning in 2018. The supplement approximates the value of Social Security benefits for those who retire before age 62.

The increased contribution would suck, but wouldn't be a huge deal for me since I'm not planning to be around much longer.  The high five would also suck, but still wouldn't be a major crimp in my FIRE plans.  And as a deferred annuitant, I wouldn't be getting the SS supplement anyway.  But the elimination of COLAs would really hurt.  Surely that won't pass.  Tell me it won't pass.  Time to join NARFE.

Elimination of COLAs would suck big time. Sounds like the plan is to pay a lot more for a lot less. There are some Republican Congress critters with a fair number of Feds in their districts...wonder what kind of heat they will feel. Hopefully habanero level.

Seems pretty evil to do this to people with < 5-10 years until retirement.

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 21, 2017, 07:34:05 PM
Seems pretty evil to do this to people with < 5-10 years until retirement.

In the past, such changes have only applied to new hires, to minimize the heat.  It's part of the long term trend to disincentivize people from joining the federal workforce.  If they just keep making it a shittier and shittier deal, pretty soon nobody will want to do it.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on May 21, 2017, 07:45:13 PM
Seems pretty evil to do this to people with < 5-10 years until retirement.

In the past, such changes have only applied to new hires, to minimize the heat.  It's part of the long term trend to disincentivize people from joining the federal workforce.  If they just keep making it a shittier and shittier deal, pretty soon nobody will want to do it.

I think it is more about trying to get current Feds to leave. If this started for retirees in, say, 2019, I would bet there would be a flood of people out the door before it went into effect.

For those of us left behind, it would just undermine morale.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 21, 2017, 07:58:44 PM
For those of us left behind, it would just undermine morale.

I think everything about being a federal employee is designed to undermine morale.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 22, 2017, 04:33:21 AM
The article says the supplement elimination would apply to people who retire in 2018, but doesn't say whether that's fiscal '18 or calendar '18.  So it looks like there would be little, if any, chance for people to jump ship and lock in their supplement.

The article is vague on the application of the COLA elimination, but the wording leaves open the possibility that it would apply to people who are already retired.

And it appears that there would be no grandfathering of anything.  So, yes, the whole plan appears to be designed to discourage people from entering federal service and make folks already in it want to leave.  No need to pay VSIPs or offer early retirement; just make it suck so much that no one wants to hang around.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on May 22, 2017, 07:02:04 AM
For those of us left behind, it would just undermine morale.

I think everything about being a federal employee is designed to undermine morale.

I think using some of the plentiful sick leave I have accumulated is the only way to improve my morale.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on May 22, 2017, 07:26:35 AM
The article says the supplement elimination would apply to people who retire in 2018, but doesn't say whether that's fiscal '18 or calendar '18.  So it looks like there would be little, if any, chance for people to jump ship and lock in their supplement.

The article is vague on the application of the COLA elimination, but the wording leaves open the possibility that it would apply to people who are already retired.

And it appears that there would be no grandfathering of anything.  So, yes, the whole plan appears to be designed to discourage people from entering federal service and make folks already in it want to leave.  No need to pay VSIPs or offer early retirement; just make it suck so much that no one wants to hang around.

Since it's for the 2018 federal budget, it'll likely be for fiscal year 2018.  If any of these proposals are accepted, you can expect a large number of federal employees retiring withing the next four months.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 22, 2017, 08:49:04 AM
It's a long way from a White House budget proposal to actual implementation, so I'm not letting this get me riled up at this point.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on May 22, 2017, 09:07:29 AM
It's a long way from a White House budget proposal to actual implementation, so I'm not letting this get me riled up at this point.

True. There also is the issue that this would presumably eliminate the COLA for the Congresscritters' pension, and they may not go along with that idea.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 22, 2017, 09:50:16 AM
Republicans have been suggesting this sort of thing every year since 1995, and 90% of it doesn't pass.  They might get some little pieces of it, but I don't see any reason to worry yet.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on May 22, 2017, 10:38:33 AM
I've worked as a fed civilian for 16 years.  I've seen the government say they will do a ton of stuff (both good and bad), and have learned not to worry about any of it until it actually happens.  Hopefully if anything does pass, current employees are grandfathered in, but we shall see...
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 22, 2017, 06:55:23 PM
I've worked as a fed civilian for 16 years.  I've seen the government say they will do a ton of stuff (both good and bad), and have learned not to worry about any of it until it actually happens.  Hopefully if anything does pass, current employees are grandfathered in, but we shall see...

Yes, I've seen similar things proposed many times in the past, and most of it never happened.  But sometimes things slip through because no one wants to be seen standing up for those lazy-ass government workers.  Federal employees that have been hired since 2014 are paying a pension contribution that is several times more than what the rest of us are paying.  That was passed while Obama was in the White House.  And I'm sure that back in the mid 80s, few federal employees thought that crazy FERS thing would actually pass.  If you wait until it has passed to worry about it, it's too late to do anything about it.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: vern on May 23, 2017, 01:55:28 PM
  I don't get any credit for all of the years I spent in graduate school to get the job, but on the other hand I'm pretty sure I had way more fun in graduate school than anyone ever has in the military.

Sol, I'll put the two years I lived in Greece and traveled across Europe while I was in the Army up against your grad school time.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 23, 2017, 03:35:49 PM
  I don't get any credit for all of the years I spent in graduate school to get the job, but on the other hand I'm pretty sure I had way more fun in graduate school than anyone ever has in the military.

Sol, I'll put the two years I lived in Greece and traveled across Europe while I was in the Army up against your grad school time.

I'm fairly certain I would have gotten myself kicked out of the army for some of my grad school exploits.  I'm not proud.

But grad school is easy, in some respects.  Your odds of being shot at are notably lower.  Nobody tells when to get out of bed, or when to work.  You can drink too much, even at inappropriate times.  I spent years doing stupid unproductive stuff with weird and unpopular university clubs.  There are coeds literally everywhere and they are desperate for any man who isn't a frat boy rapist roofie bro.  On the downside, the opportunities to blow shit up are significantly less numerous.

I wouldn't trade any of it, though, with the possible exception of that one red headed disaster.  Grad school is an easy way to hide from grown up responsibilities well into your 20s or even your 30s, if you do it right (wrong).  Losing federal pension credit for those years, compared to my ex military co-workers, doesn't bother me at all.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: crimwell on May 25, 2017, 07:36:53 AM
if I make it to age 80 the difference in pension alone (based on my two official ways to retire early) I will collect between $180-360k more by staying to MRA. 

What do you mean 2 official ways to retire early? I'm aware of MRA - what's the other one? Just resigning the same way you would if a non-mustachian got another non-government job, except not getting another job?
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Rosy on May 25, 2017, 01:54:17 PM
Just a footnote from a different perspective, as a military wife/survivor-FERS/survivor. Regarding the medical insurance:

As an FERS annuant/survivor you have the option to continue on the government employee health insurance plan if you were already on the family plan. DH died in 1998 at 50 years old - the annuity pension is minimal, but oh boy has the health insurance coverage ever proved to be a financial life saver.
It was hard to pay the premiums those first two years until my life was back on track, but I knew if I dropped it, I would never be eligible to get back on the plan. So I just switched to the cheapest plan available for about three years, I was determined to hang onto this coverage and as soon as I could afford it, changed to a PPO plan.
 
We had the good luck to deal with a wonderful lady who helped us prepare and sort out (benefits dept?) everything just in time before he passed away - Agent Orange 100% - a long and difficult road. In the end he developed a rare, aggressive lung cancer seen almost exclusively in Agent Orange victims.  Afterward, she helped me with the supplemental as well, I would have never known about it on my own. I can't tell you how grateful I was, because Lord knows dealing with paperwork when you are paralyzed by grief and depression is difficult.
 
I sent her a lovely flower arrangement when I received my first payment - it became her center piece in her own retirement party the next day:)

Having access to good medical insurance into my own retirement years is priceless. Even though over the years the initial $371 benefit plus medical insurance eroded down to now only $157 - due to the cost of rising premiums.
I never expected that this one benefit and my handling of it - it was for a time a choice of eat or pay the premium, would ultimately become a significant factor in my own retirement.
My estimate is that in 10 years or less, the benefit will be zero (or rather it will all go toward medical premiums), which means I will then start paying medical premiums out of pocket - I'll be 78 then. Based on family genetics I suppose I might live to be 90 which would mean I will have to plan to pay extra for health insurance premiums for about 12 plus/minus years.

Isn't retirement planning fun?:)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 26, 2017, 06:29:49 AM
Just a footnote from a different perspective, as a military wife/survivor-FERS/survivor. Regarding the medical insurance:

As an FERS annuant/survivor you have the option to continue on the government employee health insurance plan if you were already on the family plan. DH died in 1998 at 50 years old - the annuity pension is minimal, but oh boy has the health insurance coverage ever proved to be a financial life saver.
It was hard to pay the premiums those first two years until my life was back on track, but I knew if I dropped it, I would never be eligible to get back on the plan. So I just switched to the cheapest plan available for about three years, I was determined to hang onto this coverage and as soon as I could afford it, changed to a PPO plan.
 
We had the good luck to deal with a wonderful lady who helped us prepare and sort out (benefits dept?) everything just in time before he passed away - Agent Orange 100% - a long and difficult road. In the end he developed a rare, aggressive lung cancer seen almost exclusively in Agent Orange victims.  Afterward, she helped me with the supplemental as well, I would have never known about it on my own. I can't tell you how grateful I was, because Lord knows dealing with paperwork when you are paralyzed by grief and depression is difficult.
 
I sent her a lovely flower arrangement when I received my first payment - it became her center piece in her own retirement party the next day:)

Having access to good medical insurance into my own retirement years is priceless. Even though over the years the initial $371 benefit plus medical insurance eroded down to now only $157 - due to the cost of rising premiums.
I never expected that this one benefit and my handling of it - it was for a time a choice of eat or pay the premium, would ultimately become a significant factor in my own retirement.
My estimate is that in 10 years or less, the benefit will be zero (or rather it will all go toward medical premiums), which means I will then start paying medical premiums out of pocket - I'll be 78 then. Based on family genetics I suppose I might live to be 90 which would mean I will have to plan to pay extra for health insurance premiums for about 12 plus/minus years.

Isn't retirement planning fun?:)

Did the survivor annuity receive annual COLA increases? Very sorry to hear about your husband.  That's terrible.  A neighbor of mine is a Vietnam Marine vet who developed Parkinson's @ 61 years old, which was linked to his exposure to Agent Orange. He got a 100% disability rating.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 26, 2017, 06:37:13 AM
Follow up article to the last one I posted. Nothing earth-shattering.

http://www.govexec.com/pay-benefits/retirement-planning/2017/05/perils-and-pitfalls-retiring-really-early/138163/?oref=retirement_planning_nl

She fails to mention two things.  First, a deferred annuity receives no COLA adjustments between the time you leave federal service and the time you begin collecting.  This can erode the value of the FERS annuity considerably. Second, while you can take the deferred annuity as early as your MRA, you lose 5% for each year prior to 62, so at 57 for example, you'd take a 25% reduction.  Couple that with the inflation-eroded annuity, and you've got a real punch in the tights.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on May 26, 2017, 07:28:38 AM
If you have 25, oops, 30 years in when you hit your MRA (I'll have 36), there won't be any deduction on your pension, and you can withdraw from TSP immediately.  However, you do still lose out on COLA since those don't kick in until age 62.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Bruizer on May 26, 2017, 07:36:21 AM
If you have 25 years in when you hit your MRA (I'll have 36), there won't be any deduction on your pension, and you can withdraw from TSP immediately.  However, you do still lose out on COLA since those don't kick in until age 62.

That's only if you're retiring under VERA.  For a regular retirement, you'll need 30 years at MRA, 20 years at 60, or 5 years at 62.  When I hit my MRA last year, I was just short of 30 years.  I could have taken a reduced pension, but it was worth it to wait a few more months to get to 30 years.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on May 26, 2017, 07:41:31 AM
If you have 25 years in when you hit your MRA (I'll have 36), there won't be any deduction on your pension, and you can withdraw from TSP immediately.  However, you do still lose out on COLA since those don't kick in until age 62.

That's only if you're retiring under VERA.  For a regular retirement, you'll need 30 years at MRA, 20 years at 60, or 5 years at 62.  When I hit my MRA last year, I was just short of 30 years.  I could have taken a reduced pension, but it was worth it to wait a few more months to get to 30 years.

Oops... yeah, 30 years.  I'll edit my post, guess I've had my hopes up for VERA for too long ;)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: evanc on May 26, 2017, 09:51:00 AM
For those of us left behind, it would just undermine morale.

I think everything about being a federal employee is designed to undermine morale.

I have nothing substantive to add to this discussion. Just had to mention, sol, you crack me up :D
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on May 26, 2017, 05:10:42 PM
So under the proposals in the wapo article it seems like the annuity value of FERS is being reduced and the cost of participating is being increased. A new employee paying ten percent of their gross or so in gets a no-COLA no-supplement annuity that's a percentage of their consecutive-high-five. At that point is it a good price for an annuity given say 20 years averaging 3% raises? Or would that hypothetical employee be better of taking their accumulated contributions and investing at that point? (Sub-queries - do folks choosing return of contributions get a nominal interest rate or anything for such? Again when I was with state gov that's how the pension worked but I don't think it does for Federal service. Also of course if hanging on to a low value annuity gives you access to otherwise extraordinarily costly health insurance once you have your five in to vest you hang on for dear life... but if I understand correctly to retain access to the healthcare requires you to stay until your MRA, right? Does the strange only-at-exactly-55 exit path keep health care access? Do you have to stay in FERS for that?)

The way I'm reading it is that it won't just be new employees, but current employees as well.  In the past, they have changed the rules for new hires, but the people who had been in a while stayed on the old plan.  It looks like even current, long time feds will not get to keep their existing deal, which would be a pretty crappy thing to pull.  But, yes.  No COLA (ever, not just until age 62 like it is now), no supplement, based on high five.

As for the sub-query, I'm not awake enough to figure that out yet.  You can buy an annuity or keep your money in TSP, or move it out, or a combination.  In my case, it's best for me to keep it in TSP so that I can pass the leftover balance to my son when I die.  If all goes well (based on firecalc and others), I should have a lot to pass down.  The TSP and annuity option are different than the FERS pension.

You can only keep health care if you retire at your MRA, or get an official early out option (like VERA).  MRA is based on the year you were born.  The earliest is 55 then it goes up a month, kind of, for every year younger you are until you hit a point where the MRA is 57 (there is a chart that's easy to look up, just search FERS MRA chart).  I think the "only at exactly 55" thing is "at least exactly 55" because you need to have your MRA to keep health care, and again, for younger people that is over age 55.

"Do you have to stay in FERS"...  You have to retire as a FERS employee, at MRA or later, to get the health care.  Leaving FERS, to my knowledge, is not really a thing--I mean, you leave it if you change jobs, and lose some benefits if you retire before MRA, defer retirement, etc.  I don't believe you have to option to have someone else run the pension, or cash it out*, which is what I'm guessing "staying in FERS" means.  You completely have the option to move your TSP money to something else and that would not affect your health benefits.

*you can cash out your contributions to FERS, but since it is only your 1% contribution (first version FERS employees), definitely not worth it.  Even if it goes to 5%, I don't see how it would be worth it to cash it out.  Unless maybe you're retiring so early that you don't have many years of service, would be penalized until there was nothing left, etc.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 26, 2017, 07:08:15 PM
The way I'm reading it is that it won't just be new employees, but current employees as well.  In the past, they have changed the rules for new hires, but the people who had been in a while stayed on the old plan.  It looks like even current, long time feds will not get to keep their existing deal, which would be a pretty crappy thing to pull.  But, yes.  No COLA (ever, not just until age 62 like it is now), no supplement, based on high five.

According to NARFE's website, the elimination of the COLA would apply to people who are already retired.  As in, they've already been getting COLAs for how ever many years they've been retired, and starting in 2018, they would not get COLAs any more for the rest of their lives.  Talk about a raw deal.  I can't believe that will pass, but given the crazy-land nature of where this proposal is starting, I suspect they will get some of it through.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Rosy on May 26, 2017, 08:18:06 PM
@dude
Quote
Did the survivor annuity receive annual COLA increases? Very sorry to hear about your husband.  That's terrible.  A neighbor of mine is a Vietnam Marine vet who developed Parkinson's @ 61 years old, which was linked to his exposure to Agent Orange. He got a 100% disability rating.

Yes, the survivor annuity receives annual COLA increases - some years it has made up for the increase of premiums for medical insurance. Lately, it has not been enough to offset med ins prem increases.
Then there was the year when congress allowed for zero COLA..., but the medical insurance premium went up anyway:)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on May 26, 2017, 08:28:44 PM
The way I'm reading it is that it won't just be new employees, but current employees as well.  In the past, they have changed the rules for new hires, but the people who had been in a while stayed on the old plan.  It looks like even current, long time feds will not get to keep their existing deal, which would be a pretty crappy thing to pull.  But, yes.  No COLA (ever, not just until age 62 like it is now), no supplement, based on high five.

According to NARFE's website, the elimination of the COLA would apply to people who are already retired.  As in, they've already been getting COLAs for how ever many years they've been retired, and starting in 2018, they would not get COLAs any more for the rest of their lives.  Talk about a raw deal.  I can't believe that will pass, but given the crazy-land nature of where this proposal is starting, I suspect they will get some of it through.

Yes, retirees as well, even CSRS! (the reduction part)  That's going to bite even long-time retirees. 

I've had the federal government play games with my pay, go back on my hiring contract, participate in illegal hiring practices, nepotism, retaliation for reporting/proving sexual harassment, etc, so I know "they" have no problems doing it, but this is a large scale f*ck over of nearly all employees.  Hopefully it won't be allowed to be "retro-active" to current employees and retirees, but be limited to new-hires.  However, I don't trust it, no matter who is sitting as president (the only time I've had a pay freeze was under Obama, so party doesn't matter).  Like I said earlier, I'll worry about it if/when it happens, but my MO has always been "hope for the best, prepare for the worst", and make sure I'm making good money choices outside of TSP.  I've had the chance to leave for better pay, but already having 15 years into the pension, etc, kept me where I am.  If it happens, it's time to reevaluate that decision.  If it does happen, it's another dick move by the government. Fucking bastards.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 27, 2017, 04:39:52 AM
The way I'm reading it is that it won't just be new employees, but current employees as well.  In the past, they have changed the rules for new hires, but the people who had been in a while stayed on the old plan.  It looks like even current, long time feds will not get to keep their existing deal, which would be a pretty crappy thing to pull.  But, yes.  No COLA (ever, not just until age 62 like it is now), no supplement, based on high five.

According to NARFE's website, the elimination of the COLA would apply to people who are already retired.  As in, they've already been getting COLAs for how ever many years they've been retired, and starting in 2018, they would not get COLAs any more for the rest of their lives.  Talk about a raw deal.  I can't believe that will pass, but given the crazy-land nature of where this proposal is starting, I suspect they will get some of it through.

Yes, retirees as well, even CSRS! (the reduction part)  That's going to bite even long-time retirees. 

I've had the federal government play games with my pay, go back on my hiring contract, participate in illegal hiring practices, nepotism, retaliation for reporting/proving sexual harassment, etc, so I know "they" have no problems doing it, but this is a large scale f*ck over of nearly all employees.  Hopefully it won't be allowed to be "retro-active" to current employees and retirees, but be limited to new-hires.  However, I don't trust it, no matter who is sitting as president (the only time I've had a pay freeze was under Obama, so party doesn't matter).  Like I said earlier, I'll worry about it if/when it happens, but my MO has always been "hope for the best, prepare for the worst", and make sure I'm making good money choices outside of TSP.  I've had the chance to leave for better pay, but already having 15 years into the pension, etc, kept me where I am.  If it happens, it's time to reevaluate that decision.  If it does happen, it's another dick move by the government. Fucking bastards.

Don't blame the generic "government."  Neither OPM nor your agency leadership want to do this to us.  It's the cocksucking rabid right-wing republicans who run OMB and the Freedom Caucus in the House who want to do this to us.  And it's nothing more than a mean-spirited desire for political retribution, totally driven by blind hatred of the generic "government," of which we are the easiest representatives to fuck over.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sparkytheop on May 27, 2017, 06:03:55 AM


Don't blame the generic "government."  Neither OPM nor your agency leadership want to do this to us.  It's the cocksucking rabid right-wing republicans who run OMB and the Freedom Caucus in the House who want to do this to us.  And it's nothing more than a mean-spirited desire for political retribution, totally driven by blind hatred of the generic "government," of which we are the easiest representatives to fuck over.

That's the thing though, "generic government" is just messed up. My leadership does not care who they screw over. They've told us we are overpaid and have used it as an excuse to hold up raised, break contacts, etc.  Sure, they don't like it if it affects them, but that's what "secret perks" are for, to try to make up for it for themselves.
I'm here for my paycheck. And I can hope that my current supervisor continues to ignore the good ol' boy system and treats us ok. But there is no loyalty or trust that anyone in any position above peon will ever do the right thing.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on May 27, 2017, 09:16:28 AM


Don't blame the generic "government."  Neither OPM nor your agency leadership want to do this to us.  It's the cocksucking rabid right-wing republicans who run OMB and the Freedom Caucus in the House who want to do this to us.  And it's nothing more than a mean-spirited desire for political retribution, totally driven by blind hatred of the generic "government," of which we are the easiest representatives to fuck over.

That's the thing though, "generic government" is just messed up. My leadership does not care who they screw over. They've told us we are overpaid and have used it as an excuse to hold up raised, break contacts, etc.  Sure, they don't like it if it affects them, but that's what "secret perks" are for, to try to make up for it for themselves.
I'm here for my paycheck. And I can hope that my current supervisor continues to ignore the good ol' boy system and treats us ok. But there is no loyalty or trust that anyone in any position above peon will ever do the right thing.

Wow, it sounds like your agency really sucks.  I'm glad mine isn't like that (yet).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: elysianfields on May 30, 2017, 02:38:50 AM
Here's a TSP millionaire's story, in which he hints at mustachian tendencies:

https://www.fedsmith.com/2017/05/21/becoming-tsp-millionaire-one-federal-employees-story/

ETA: some of the comments on this story got me laughing - many of the usual "it's impossible" or "you missed out on life" rants.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: simonsez on June 05, 2017, 09:51:37 AM


Don't blame the generic "government."  Neither OPM nor your agency leadership want to do this to us.  It's the cocksucking rabid right-wing republicans who run OMB and the Freedom Caucus in the House who want to do this to us.  And it's nothing more than a mean-spirited desire for political retribution, totally driven by blind hatred of the generic "government," of which we are the easiest representatives to fuck over.

That's the thing though, "generic government" is just messed up. My leadership does not care who they screw over. They've told us we are overpaid and have used it as an excuse to hold up raised, break contacts, etc.  Sure, they don't like it if it affects them, but that's what "secret perks" are for, to try to make up for it for themselves.
I'm here for my paycheck. And I can hope that my current supervisor continues to ignore the good ol' boy system and treats us ok. But there is no loyalty or trust that anyone in any position above peon will ever do the right thing.

Wow, it sounds like your agency really sucks.  I'm glad mine isn't like that (yet).

+1

If my agency was like that, that would really affect my day to day job (which I love).  Ouch, hang in there!  Or leave!  (whatever optimizes your long-term utility)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on June 06, 2017, 06:23:45 AM
The way I'm reading it is that it won't just be new employees, but current employees as well.  In the past, they have changed the rules for new hires, but the people who had been in a while stayed on the old plan.  It looks like even current, long time feds will not get to keep their existing deal, which would be a pretty crappy thing to pull.  But, yes.  No COLA (ever, not just until age 62 like it is now), no supplement, based on high five.

According to NARFE's website, the elimination of the COLA would apply to people who are already retired.  As in, they've already been getting COLAs for how ever many years they've been retired, and starting in 2018, they would not get COLAs any more for the rest of their lives.  Talk about a raw deal.  I can't believe that will pass, but given the crazy-land nature of where this proposal is starting, I suspect they will get some of it through.

Yes, retirees as well, even CSRS! (the reduction part)  That's going to bite even long-time retirees. 

I've had the federal government play games with my pay, go back on my hiring contract, participate in illegal hiring practices, nepotism, retaliation for reporting/proving sexual harassment, etc, so I know "they" have no problems doing it, but this is a large scale f*ck over of nearly all employees.  Hopefully it won't be allowed to be "retro-active" to current employees and retirees, but be limited to new-hires.  However, I don't trust it, no matter who is sitting as president (the only time I've had a pay freeze was under Obama, so party doesn't matter).  Like I said earlier, I'll worry about it if/when it happens, but my MO has always been "hope for the best, prepare for the worst", and make sure I'm making good money choices outside of TSP.  I've had the chance to leave for better pay, but already having 15 years into the pension, etc, kept me where I am.  If it happens, it's time to reevaluate that decision.  If it does happen, it's another dick move by the government. Fucking bastards.

Don't blame the generic "government."  Neither OPM nor your agency leadership want to do this to us.  It's the cocksucking rabid right-wing republicans who run OMB and the Freedom Caucus in the House who want to do this to us.  And it's nothing more than a mean-spirited desire for political retribution, totally driven by blind hatred of the generic "government," of which we are the easiest representatives to fuck over.

Absolutely 100% correct.  And if you're a Fed and voted for the orange asshat or any of the GOP (esp. Tea Party) minions, then you deserve every punch in the nuts you get and I wish you a thousand more (and fuck you for sharing your self-inflicted pain with the rest of us).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on June 06, 2017, 06:42:16 AM
Here's a TSP millionaire's story, in which he hints at mustachian tendencies:

https://www.fedsmith.com/2017/05/21/becoming-tsp-millionaire-one-federal-employees-story/

ETA: some of the comments on this story got me laughing - many of the usual "it's impossible" or "you missed out on life" rants.

I love stories like this. I've got 19.5 years in and my TSP balance is $652k.  There's no doubt I'd hit the $1mil mark (and likely surpass it by a lot) if I stuck around for 32 years like the author of that story -- in fact, I just plugged in the numbers, and at 6% ROI, I'd be over $2mil.  As it is, I'm hoping to come in around $750-$800k at the end of the next two years.  Only need 3-4% to do that, so it's possible (though I have a strong feeling we'll see a large drop between now and then). At any rate, this guy hit the nail square on the head -- a little discipline, a long-term outlook, and patience is all it takes.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Tovin on July 03, 2017, 09:45:33 PM
I'm fairly new here, so sorry if this is considered necroing a post. I just SO wanted to join in with people in our same position!

Our current plan is for my husband to quit with 30 years in at age 52, defer his annuity and stay on my insurance. Obviously the grail would be them offering a VSIP/VERA, which they would never offer for my position. This would be 2033.

I'll work til 57 (unless he gets the grail),5 years after he quits, when I'll have 26 years in and take an immediate annuity to keep our health insurance. Yeah, we take a hit, but we're going to have more than enough to cover. We're incredibly risk averse or we'd both retire when he's 45-48ish and just pay for medical out of pocket.

I've had quite a few medical problems throughout my life, so we're not pretending. It's very possible I won't be able to go out and do the things at 57 I can barely do now. This plan gives us a lot of play money to do what we want now while we're both semi-healthy ish.

(These are last year's numbers, I haven't looked this year yet) He's 36, with 215k in TSP. I'm 39 and only have 55k. He gets his 8 hours (15 years in) next June. He intends to be off a lot of Fridays and he works where that won't be a problem. We work a compressed work schedule so we're already off every other Friday (3 day weekends FTW!).

We're both pumping the max into our TSPs right now, and another 30ishk a year into Vanguard accounts, but this year we intend to look at putting less into mine and putting that in more available options to use between me retiring and him getting his annuity.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: doggyfizzle on July 04, 2017, 07:28:47 PM
Our current plan is for my husband to quit with 30 years in at age 52, defer his annuity and stay on my insurance. Obviously the grail would be them offering a VSIP/VERA, which they would never offer for my position. This would be 2033.

A VSIP at 50 would be my dream come true as well.  I'll have 23 years of service by then so I'd just barely qualify.  Keeping the medical insurance really is the main thing that prevents me from really going for FIRE, and also were I to leave my job early I doubt I'd be able to find anything as cool as what I'm doing in my present location.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Fomerly known as something on July 14, 2017, 12:42:48 PM


Don't blame the generic "government."  Neither OPM nor your agency leadership want to do this to us.  It's the cocksucking rabid right-wing republicans who run OMB and the Freedom Caucus in the House who want to do this to us.  And it's nothing more than a mean-spirited desire for political retribution, totally driven by blind hatred of the generic "government," of which we are the easiest representatives to fuck over.

That's the thing though, "generic government" is just messed up. My leadership does not care who they screw over. They've told us we are overpaid and have used it as an excuse to hold up raised, break contacts, etc.  Sure, they don't like it if it affects them, but that's what "secret perks" are for, to try to make up for it for themselves.
I'm here for my paycheck. And I can hope that my current supervisor continues to ignore the good ol' boy system and treats us ok. But there is no loyalty or trust that anyone in any position above peon will ever do the right thing.

Wow, it sounds like your agency really sucks.  I'm glad mine isn't like that (yet).

Sparky are you down the hall from me?

ETA:  Why I don't leave, the mission.  I once heard a great lecture once on successful organizations and how you can have a successful organization with bad leadership if the mission is seen as essential.  I though of how yup that describes work to a T.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: SquirrelStache on July 16, 2017, 08:55:26 AM
Posting to follow. The plan is to have hubby RE and I'll keep working for a while. He's 51 and aiming for MRA with 10 years.

We're still noobs on RE and how that works with TSP/FERS etc., so I'm just here to soak up the knowledge :-)
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on December 10, 2017, 10:36:42 AM
I have 13 years in as a FERS LEO. I am 36. At 43, I'll have 20 years but cannot access my pension until age 50, limited in my TSP options (72t, annuity, or wait until 59 1/2). At age 48, I'll have 25 years and get my pension right away but still limited in TSP options as at age 43. Backdoor ROTH conversion, IMO, won't work out well because my tax bracket will be too high. Does anyone know if the ROTH TSP can help get around that issue?

At age 50, I get my pension and TSP penalty free. Yes its 14 more years, yes it sucks, and yes I am looking for other options....buuuuuut...until then I'm here because the benefits are too good as the sole income earner and it looks like ACA will change not making it wise to depart FEHB.

I hope someone smarter than me can come up with a better method to get out.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Monkey Uncle on December 10, 2017, 03:42:41 PM
I have 13 years in as a FERS LEO. I am 36. At 43, I'll have 20 years but cannot access my pension until age 50, limited in my TSP options (72t, annuity, or wait until 59 1/2). At age 48, I'll have 25 years and get my pension right away but still limited in TSP options as at age 43. Backdoor ROTH conversion, IMO, won't work out well because my tax bracket will be too high. Does anyone know if the ROTH TSP can help get around that issue?

At age 50, I get my pension and TSP penalty free. Yes its 14 more years, yes it sucks, and yes I am looking for other options....buuuuuut...until then I'm here because the benefits are too good as the sole income earner and it looks like ACA will change not making it wise to depart FEHB.

I hope someone smarter than me can come up with a better method to get out.

Why won't a Roth ladder work?  You shouldn't be in a high tax bracket once you quit, unless you're spending a buttload of money.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on December 11, 2017, 08:05:05 AM
I have 13 years in as a FERS LEO. I am 36. At 43, I'll have 20 years but cannot access my pension until age 50, limited in my TSP options (72t, annuity, or wait until 59 1/2). At age 48, I'll have 25 years and get my pension right away but still limited in TSP options as at age 43. Backdoor ROTH conversion, IMO, won't work out well because my tax bracket will be too high. Does anyone know if the ROTH TSP can help get around that issue?

At age 50, I get my pension and TSP penalty free. Yes its 14 more years, yes it sucks, and yes I am looking for other options....buuuuuut...until then I'm here because the benefits are too good as the sole income earner and it looks like ACA will change not making it wise to depart FEHB.

I hope someone smarter than me can come up with a better method to get out.

From your post above, it seems like you're saying you may make penalty-free withdrawals at age 50 if you retire at 43?  This is NOT the case.  You have to separate from service in or after the year of your 50th birthday.

From the IRS (https://www.irs.gov/publications/p575#en_US_2016_publink1000226952 (https://www.irs.gov/publications/p575#en_US_2016_publink1000226952)):

"In order to meet the requirements for the first exception in the list above, you must have separated from service in or after the year in which you reach age 55 (or age 50 for qualified public safety employees). You canít separate from service before that year, wait until you are age 55 (or age 50 for qualified public safety employees), and take a distribution."

 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on December 11, 2017, 08:13:23 AM
I have 13 years in as a FERS LEO. I am 36. At 43, I'll have 20 years but cannot access my pension until age 50, limited in my TSP options (72t, annuity, or wait until 59 1/2). At age 48, I'll have 25 years and get my pension right away but still limited in TSP options as at age 43. Backdoor ROTH conversion, IMO, won't work out well because my tax bracket will be too high. Does anyone know if the ROTH TSP can help get around that issue?

At age 50, I get my pension and TSP penalty free. Yes its 14 more years, yes it sucks, and yes I am looking for other options....buuuuuut...until then I'm here because the benefits are too good as the sole income earner and it looks like ACA will change not making it wise to depart FEHB.

I hope someone smarter than me can come up with a better method to get out.

Why won't a Roth ladder work?  You shouldn't be in a high tax bracket once you quit, unless you're spending a buttload of money.

As a Fed LEO with 20+ years of service, it's almost a guarantee that he'll have too much income from his pension (and SRS) to make a Roth conversion ladder work. I'm in the same boat.

bhleigh, the Roth TSP is of very limited use unless you're 100% in it. That's because TSP withdrawals will come out of BOTH your traditional TSP and Roth TSP (regardless of your desire otherwise) in proportion to your investment in each. For example, if you have 60% of your account in traditional TSP and 40% in Roth TSP, if you withdraw $1,000, $600 will come from your traditional TSP account, and $400 will come from your Roth TSP account.

What you CAN do right now is fund a Roth IRA each year (hopefully up to the max), and if your income is too high, then fund one through a backdoor conversion each year (that is, you open a traditional IRA, then convert it a day/week/month later.  There's lots of info out there on how to do this, and it's perfectly legal. I had to do this last year when I exceeded the income threshold.  Be aware of the pro rata rule, however -- if you have ANY other IRAs, or rollover IRAs, the backdoor conversion can screw you.  Read up on it.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on December 11, 2017, 11:25:40 AM
I have 13 years in as a FERS LEO. I am 36. At 43, I'll have 20 years but cannot access my pension until age 50, limited in my TSP options (72t, annuity, or wait until 59 1/2). At age 48, I'll have 25 years and get my pension right away but still limited in TSP options as at age 43. Backdoor ROTH conversion, IMO, won't work out well because my tax bracket will be too high. Does anyone know if the ROTH TSP can help get around that issue?

At age 50, I get my pension and TSP penalty free. Yes its 14 more years, yes it sucks, and yes I am looking for other options....buuuuuut...until then I'm here because the benefits are too good as the sole income earner and it looks like ACA will change not making it wise to depart FEHB.

I hope someone smarter than me can come up with a better method to get out.

Why won't a Roth ladder work?  You shouldn't be in a high tax bracket once you quit, unless you're spending a buttload of money.

As a Fed LEO with 20+ years of service, it's almost a guarantee that he'll have too much income from his pension (and SRS) to make a Roth conversion ladder work. I'm in the same boat.

bhleigh, the Roth TSP is of very limited use unless you're 100% in it. That's because TSP withdrawals will come out of BOTH your traditional TSP and Roth TSP (regardless of your desire otherwise) in proportion to your investment in each. For example, if you have 60% of your account in traditional TSP and 40% in Roth TSP, if you withdraw $1,000, $600 will come from your traditional TSP account, and $400 will come from your Roth TSP account.

What you CAN do right now is fund a Roth IRA each year (hopefully up to the max), and if your income is too high, then fund one through a backdoor conversion each year (that is, you open a traditional IRA, then convert it a day/week/month later.  There's lots of info out there on how to do this, and it's perfectly legal. I had to do this last year when I exceeded the income threshold.  Be aware of the pro rata rule, however -- if you have ANY other IRAs, or rollover IRAs, the backdoor conversion can screw you.  Read up on it.

While it is true that TSP withdrawals come out of both Roth and Traditional, I believe that one way around this is to do a rollover upon retirement, to get just the Roth portion out. I am not sure if it is a one-step or two-step process (i.e., just roll out Roth, or roll out substantially everything and then roll the Traditional back in), but I think it can be done.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: coffeefueled on December 11, 2017, 02:01:13 PM
Posting to follow.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Dragonswan on December 11, 2017, 02:11:24 PM
Correct.  Upon separation from service at any age you can roll the Roth portion of your TSP to a Roth IRA.  I am unsure of the 5 year aging rule for rolledover money so you'll have to research that.  You could contribute to a Roth IRA as suggested above and if there is an aging requirement, at least the money you put in now will have aged by the time you need it.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Ricksun on December 12, 2017, 02:45:43 PM
Correct.  Upon separation from service at any age you can roll the Roth portion of your TSP to a Roth IRA.  I am unsure of the 5 year aging rule for rolledover money so you'll have to research that.  You could contribute to a Roth IRA as suggested above and if there is an aging requirement, at least the money you put in now will have aged by the time you need it.

I may be wrong here, or the TSP modernization law may have changed this, but I don't think one can just roll over their ROTH portion of the their TSP.  I understood that any withdrawal must be proportionate to the account balance.  So you'd have to roll over the entire TSP balance to a Traditional and Roth IRA respectively.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on December 14, 2017, 06:42:49 AM
Correct.  Upon separation from service at any age you can roll the Roth portion of your TSP to a Roth IRA.  I am unsure of the 5 year aging rule for rolledover money so you'll have to research that.  You could contribute to a Roth IRA as suggested above and if there is an aging requirement, at least the money you put in now will have aged by the time you need it.

I may be wrong here, or the TSP modernization law may have changed this, but I don't think one can just roll over their ROTH portion of the their TSP.  I understood that any withdrawal must be proportionate to the account balance.  So you'd have to roll over the entire TSP balance to a Traditional and Roth IRA respectively.

I seem to recall that this is true, but I think that the way around this is to roll almost all of it out, leaving a token amount in, and then reroll the Traditional portion back in. I will be looking into this as I decide whether to shift my contributions to Roth, but that is at least my recollection.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on December 14, 2017, 09:49:43 AM
Why won't a Roth ladder work?  You shouldn't be in a high tax bracket once you quit, unless you're spending a buttload of money.


As a Fed LEO with 20+ years of service, it's almost a guarantee that he'll have too much income from his pension (and SRS) to make a Roth conversion ladder work.

This is why a Roth conversion ladder won't work. In today's dollars, I would receive a $47k pension + $12k SRS ($59k total). As far as I know, there is no way to not receive this money. As a LEO I don't have the option to defer acceptance. I'm still new to the Roth Conversion Ladder concept so correct me if I'm wrong, but converting anything more than $20k would put me into the same tax bracket I am now (25%).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on December 14, 2017, 09:53:04 AM
Correct.  Upon separation from service at any age you can roll the Roth portion of your TSP to a Roth IRA.  I am unsure of the 5 year aging rule for rolledover money so you'll have to research that.  You could contribute to a Roth IRA as suggested above and if there is an aging requirement, at least the money you put in now will have aged by the time you need it.

I may be wrong here, or the TSP modernization law may have changed this, but I don't think one can just roll over their ROTH portion of the their TSP.  I understood that any withdrawal must be proportionate to the account balance.  So you'd have to roll over the entire TSP balance to a Traditional and Roth IRA respectively.

I seem to recall that this is true, but I think that the way around this is to roll almost all of it out, leaving a token amount in, and then reroll the Traditional portion back in. I will be looking into this as I decide whether to shift my contributions to Roth, but that is at least my recollection.

Yes, you can take all of your money out of the TSP (Roth and Trad) and roll it into a private sector account. The private sector accounts would separate out the Roth and Trad amounts into the proper Roth IRA and Trad IRA for you. Then, as long as you left some money in your TSP ($2k or so), you can roll the Trad IRA back into the TSP.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on December 14, 2017, 09:55:55 AM
Correct.  Upon separation from service at any age you can roll the Roth portion of your TSP to a Roth IRA.  I am unsure of the 5 year aging rule for rolledover money so you'll have to research that.  You could contribute to a Roth IRA as suggested above and if there is an aging requirement, at least the money you put in now will have aged by the time you need it.

As I understand it, rollover Roth IRAs don't reset the clock on the 5 year aging rule on existing Roth IRAs. I found an article by Mike Kitces that explained it really well.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Fomerly known as something on December 19, 2017, 08:22:54 AM
I have 13 years in as a FERS LEO. I am 36. At 43, I'll have 20 years but cannot access my pension until age 50, limited in my TSP options (72t, annuity, or wait until 59 1/2). At age 48, I'll have 25 years and get my pension right away but still limited in TSP options as at age 43. Backdoor ROTH conversion, IMO, won't work out well because my tax bracket will be too high. Does anyone know if the ROTH TSP can help get around that issue?

At age 50, I get my pension and TSP penalty free. Yes its 14 more years, yes it sucks, and yes I am looking for other options....buuuuuut...until then I'm here because the benefits are too good as the sole income earner and it looks like ACA will change not making it wise to depart FEHB.

I hope someone smarter than me can come up with a better method to get out.

Fellow LEO.  I'm 4 years ahead of you.

Check out the FERS guide from Dan Jamison.  https://fersguide.com/

He's a former FBI SA and for $15 for the year he does a guide for LEOs at the GS 13 journeyman level and another aimed at the GS 9 journeyman.

On Roth his opinion is no unless you are going to roll thing out of TSP.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Fomerly known as something on December 19, 2017, 09:23:00 AM
Just got this update from previously referenced Dan Jamison.

"There was a BIG surprise in the TSP's most-recent Fact Sheet publication!  On 12/14/2017, the TSP released a publication (TSP Fact Sheet 10) answering questions about the TSP Modernization Act of 2017. Near the beginning of the document, which you can view here, the TSP states that in addition to the changes required by the Act, "we're also adding the ability to specify how much of your withdrawal should be Roth and how much should be Traditional; withdrawals currently come out pro rata from both sources." 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Dragonswan on December 20, 2017, 07:26:31 AM
This is great news!  But to answer the other question about rolling over just your Roth, yes you can do that under current rules.  You don't have to do any tricky manipulations.  When you separate you specify you would like to rollover your Roth balance to your Roth IRA.  You can do this because it's a direct rollover or transfer and is not considered a withdrawal for purposes of the one withdrawal rule.  Just make sure you have the money transferred directly from TSP to Roth IRA (do not take the money yourself then deposit into the Roth IRA, that counts as a withdrawal or indirect rollover).
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on December 20, 2017, 09:04:07 AM
Check out the FERS guide from Dan Jamison.  https://fersguide.com/


I already subscribe to the FERSGUIDE. Its a huge wealth of knowledge in there. I also saw the most recent update as well. It seems like it will remove the need for the Roth conversion ladder if we can withdraw amounts from specific accounts.

Now the question is this: I have $300k in my TSP ($275k in Traditional & $25k in Roth) and I currently max out the Traditional ($18k). With 14 years left, do I start contributing to the Roth instead of the Traditional? The idea being that I use my traditional when I retire at age 50 and then switch to Roth at 59.5.

The theory is that the Traditional TSP would reach $700k in the next 14 years ($275k at 7%) and the Roth TSP would reach $913k in the next 23 years. Does this sound good?   
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on December 20, 2017, 01:11:02 PM
Couple thoughts -- how big will the tax hit be if you are no longer contributing pre-tax dollars?  The MadFientist has shown that the Traditional is generally the better way to go. Also, rather than tap the Roth at 59.5, I'd want to hang onto it until 70.5, when RMDs on your traditional might push you into a higher tax bracket. Might be better to draw down your traditional account before age 70.5, then use the Roth to manage your tax situation. Also, Roth a much better deal for passing on to heirs than traditional.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Dragonswan on December 21, 2017, 06:53:02 AM
Or you could think of it as when will you need the tax break most during your career.  At the earlier stages of your career you make less money and are typically in the lowest tax bracket you'll ever be in ('cause your pension will be hefty) so you might want to do Roth early on then as your salary increases and you need the tax break more, you could switch to Traditional.  The new higher standard deduction also comes into play if you won't be itemizing anymore or never itemized. With double the standard deduction you could hedge your bet and put $6000 into Roth and the rest traditional and break even with current year taxes while still setting up some future tax free income.  Lots of options.  You really can't go wrong just so long as you do continue to contribute to the TSP.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on December 21, 2017, 07:05:41 AM
Soooo many options....sooo confusing!! Who designed this anyway?! LOL!

Thanks for the help. I will have to find a tax professional that knows the Federal system to figure out the best route. My initial feeling is that Traditional will be the way to go for now since my salary is $125k +/-.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on December 21, 2017, 12:36:09 PM
Soooo many options....sooo confusing!! Who designed this anyway?! LOL!

Thanks for the help. I will have to find a tax professional that knows the Federal system to figure out the best route. My initial feeling is that Traditional will be the way to go for now since my salary is $125k +/-.

Consider fully funding a Roth IRA too if you're below the income phaseout limits, or a backdoor if you're over.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Cycling Stache on December 22, 2017, 07:27:40 AM
Our office just told us to adjust our TSP withholding for 2018 because there will be 27 pay periods in calendar year 2018.  Anyone else receive that advice?

Came up when I bumped up my withholding to $18,500 to new max.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on December 22, 2017, 08:25:49 AM
Our office just told us to adjust our TSP withholding for 2018 because there will be 27 pay periods in calendar year 2018.  Anyone else receive that advice?

Came up when I bumped up my withholding to $18,500 to new max.


Yes, we will also have 27 and they will each be 1/26 smaller than average.  I think it depends on what day of the week your agency does payroll, because some still have 26 next year.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on December 22, 2017, 12:46:14 PM
Yep, for NFC, it's 27 because the official pay date for PP25 2018 falls on the Monday EFT payday of Dec. 31. Very confusing because my E&L statement always lists the Thursday after the payroll processing weekend as the official pay date.

For GSA and some other payroll providers, there's 26.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on December 29, 2017, 01:21:57 PM
Our office just told us to adjust our TSP withholding for 2018 because there will be 27 pay periods in calendar year 2018.  Anyone else receive that advice?

Came up when I bumped up my withholding to $18,500 to new max.


Yes, we will also have 27 and they will each be 1/26 smaller than average.  I think it depends on what day of the week your agency does payroll, because some still have 26 next year.

Sol,

I believe that you are incorrect that your paychecks will be 1/26 smaller than average. I believe that they will be exactly the same as before. In years with 26 paychecks, your actual wages are slightly less than what is listed in the GS table, because of the extra work day. You basically get that back every 9 or 10 years. Thus, in a year with 27 paychecks, you will earn more than is listed for your grade and step in the GS table. Plus you will get an extra day of leave! (or however many hours you earn per pay period)

I hope that this information improves your holiday weekend.

Regards,
FE
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on December 29, 2017, 01:29:47 PM
Thanks for the optimistic update.

Unfortunately, I'm far enough along my FI journey that it won't matter.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: frugalecon on December 29, 2017, 01:59:24 PM
Thanks for the optimistic update.

Unfortunately, I'm far enough along my FI journey that it won't matter.

Unfortunately!?!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on April 28, 2019, 01:13:39 PM
For feds with a job that allows for an MRA of 50 with 20 years of service, does anyone know how it works if you hit 20 years at a younger age?

For example, I understand the deferred/postponed difference for the regular FERS option.  But I wondered if the deferment still had to be to age 62 if you otherwise qualify for a FERS pension at 50? 

For example, if you hit your 20 years of service at age 44, would you be able to quit working at 44 and begin to collect your pension immediately at 50?  Or are the options to work until 50 to get the pension at 50 or quit at 44 and wait to collect until age 57 (MRA with reduction) or 62 to avoid a reduction?

I just was unclear on if one had to work through the date for those eligible for a FERS pension sooner.

Or is this a situation where even the varieties of retirements at 50 with 20 years (LEO, Foreign Service, etc...) would all answer this differently?

Edit: I realized I had the wrong age which undercut my fundamental question of whether completing the 20 would allow for collecting beginning at 50 even if I stopped working at 44 or whatever age I hit 20 years of service at.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on April 28, 2019, 01:33:44 PM
Generally, MRA means MRA and you can't collect any sooner, regardless of length of service.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on April 28, 2019, 01:50:27 PM
Generally, MRA means MRA and you can't collect any sooner, regardless of length of service.

That is what I fear.  I guess I can ask and get an official answer for my agency this week.  But damn, that would suck, haha.

I have a bit over 10 in, but would need to wait ~8 more to get to 50 when I hit 20 years of service.

Pretty crazy peaks and valleys to compare FIRE at, for example, 40 with delayed pension crushed by inflation at 62 and sticking it out until 50 to get the pension immediately.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: alohaKane on April 28, 2019, 07:02:34 PM
Following   
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: coffeefueled on April 29, 2019, 10:47:33 AM
following
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on April 29, 2019, 04:07:06 PM
Generally, MRA means MRA and you can't collect any sooner, regardless of length of service.

I was able to confirm that I would have to work all the way to age 50 or my departure would be treated like any other resignation.  Kind of a bummer, but I guess they don't want to make it too easy on us.

So back to tightening the budget to up the savings percentage, haha.  Though maybe I need to consider moving to another agency to move up the pay scale quicker, hmm.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: x02947 on April 30, 2019, 07:22:04 AM
Any chance of dropping to part time?  The final pension is calculated as a ratio of hours worked vs hours worked if you were full time, so for a few years at least the extra 1% per year more than offsets the lowered ratio thanks to the majority of your career being full time.  Leave is prorated as well, so you would still be getting the equivalent of 8 hours every pay period (assuming top bracket).

So no, not full FIRE, which might get me lambasted, but if you've only got a couple years left and are feeling chained to making it to MRA it might be worth exploring.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Johnny Aloha on April 30, 2019, 07:59:39 AM
PTF.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Johnny Aloha on April 30, 2019, 08:22:14 AM
Has anyone heard of tips or advice on "engineering the layoff", kinda like Financial Samuri did?

In other words, can you specifically target organizations that are downsizing in order to be offered VERA?  I have no idea of how you would know which organizations are downsizing or affected, but that could be some very useful information.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on April 30, 2019, 08:40:29 AM
Has anyone heard of tips or advice on "engineering the layoff", kinda like Financial Samuri did?

Just for starters, I should mention that FS is not terribly popular around these parts.  Some of his financial advice is questionable, and his ethical advice is pretty seriously fucked up.

Quote
In other words, can you specifically target organizations that are downsizing in order to be offered VERA?  I have no idea of how you would know which organizations are downsizing or affected, but that could be some very useful information.

This is significantly more difficult in the federal government than elsewhere.  Most agencies go under a hiring freeze for several years first, because upper management sees the coming crunch well ahead of time.  And then the hiring process is usually slow and cumbersome, so it's not like you can just see a news story about problems with EPA and then run out and get an EPA jobs real quick before the VERAs come out.

Then on top of that the VERA offers are not available to everyone.  It's not like a typical corporation's headcount where they do last in first out.  VERAs are targeted at people who are already near retirement, and to be eligible to receive a VERA offer you need to have already achieved the specified time of service requirements before the window opens.  Those requirements are typically 20 years.  They're trying to give a little push to people who are already close to retirement.

But if you're already a long-serving fed and have enough management seniority that you can transition between agencies with relative ease, it's probably not too hard to put yourself in a position to get the offer.  The rats don't usually swim toward the sinking ship.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Johnny Aloha on May 01, 2019, 09:45:59 AM
Has anyone heard of tips or advice on "engineering the layoff", kinda like Financial Samuri did?

Just for starters, I should mention that FS is not terribly popular around these parts.  Some of his financial advice is questionable, and his ethical advice is pretty seriously fucked up.

I haven't read enough of his stuff to have an opinion one way or the other.    But I do know he wrote a book about organizing your own layoff.

Quote
The rats don't usually swim toward the sinking ship.
Agree - which makes it an opportunity!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 02, 2019, 09:07:29 AM
For feds with a job that allows for an MRA of 50 with 20 years of service, does anyone know how it works if you hit 20 years at a younger age?

For example, I understand the deferred/postponed difference for the regular FERS option.  But I wondered if the deferment still had to be to age 62 if you otherwise qualify for a FERS pension at 50? 

For example, if you hit your 20 years of service at age 44, would you be able to quit working at 44 and begin to collect your pension immediately at 50?  Or are the options to work until 50 to get the pension at 50 or quit at 44 and wait to collect until age 57 (MRA with reduction) or 62 to avoid a reduction?

I just was unclear on if one had to work through the date for those eligible for a FERS pension sooner.

Or is this a situation where even the varieties of retirements at 50 with 20 years (LEO, Foreign Service, etc...) would all answer this differently?

Edit: I realized I had the wrong age which undercut my fundamental question of whether completing the 20 would allow for collecting beginning at 50 even if I stopped working at 44 or whatever age I hit 20 years of service at.
 

You cannot collect the pension immediately or even at age 50 if you're 44 and haven't reached your MRA. You'd be eligible for a deferred pension, which would be a monumental waste of 20 years. Assuming you're a LEO/Air Traffic/FF (based on your 20 at 50 question), what you can do is get out of the higher stress LEO/AT/FF job after you do your 20, and take a regular FERS position elsewhere, ideally an easy, low stress job close to home. There are lots of opportunities out there. Then you'd just have to stick around until your MRA. There is another, riskier option too -- and that's to leave your job after 20 years, do whatever in the interim, then get re-hired into a FERS position right before your 50th birthday. You could then retire as soon as you hit 50, and begin to immediately collect your LEO/AT/FF pension since you've now fulfilled the age (50) and service (20) requirements.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on May 02, 2019, 10:39:09 AM
For feds with a job that allows for an MRA of 50 with 20 years of service, does anyone know how it works if you hit 20 years at a younger age?

For example, I understand the deferred/postponed difference for the regular FERS option.  But I wondered if the deferment still had to be to age 62 if you otherwise qualify for a FERS pension at 50? 

For example, if you hit your 20 years of service at age 44, would you be able to quit working at 44 and begin to collect your pension immediately at 50?  Or are the options to work until 50 to get the pension at 50 or quit at 44 and wait to collect until age 57 (MRA with reduction) or 62 to avoid a reduction?

I just was unclear on if one had to work through the date for those eligible for a FERS pension sooner.

Or is this a situation where even the varieties of retirements at 50 with 20 years (LEO, Foreign Service, etc...) would all answer this differently?

Edit: I realized I had the wrong age which undercut my fundamental question of whether completing the 20 would allow for collecting beginning at 50 even if I stopped working at 44 or whatever age I hit 20 years of service at.
 

You cannot collect the pension immediately or even at age 50 if you're 44 and haven't reached your MRA. You'd be eligible for a deferred pension, which would be a monumental waste of 20 years. Assuming you're a LEO/Air Traffic/FF (based on your 20 at 50 question), what you can do is get out of the higher stress LEO/AT/FF job after you do your 20, and take a regular FERS position elsewhere, ideally an easy, low stress job close to home. There are lots of opportunities out there. Then you'd just have to stick around until your MRA. There is another, riskier option too -- and that's to leave your job after 20 years, do whatever in the interim, then get re-hired into a FERS position right before your 50th birthday. You could then retire as soon as you hit 50, and begin to immediately collect your LEO/AT/FF pension since you've now fulfilled the age (50) and service (20) requirements.

Yeah, it kind of sucks.  It seems I could hit FIRE or thereabouts about 18 years of service in.  Staying two extra years for a pension would be worth it.  But since it is that much longer to hit 50, it seems less worth it.  I guess not anything to worry about for now.  Just keep saving and investing and see how it all feels a few years from now.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Mathew675 on May 03, 2019, 09:10:13 PM
Interesting thread, thanks for all the great info. Quick question - could those looking to retire very early simply leave the government at say 45 and then come back in to a FERS position at say 60 even at a much lower grade and get all the benefits back? My question is based on the idea that my family stops now and travels for several years before coming back when the kids are high school age and re-establishing ourselves for just a few years.

For instance, if I leave now and am making 6 figures but then come back and make much less would my high three be based on a cola adjusted wage from 10 years ago? Assume no.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 03, 2019, 09:13:34 PM
could those looking to retire very early simply leave the government at say 45 and then come back in to a FERS position at say 60 even at a much lower grade and get all the benefits back?

Yes.  It's a risky play, but that would technically qualify you for immediate benefits. 

What those benefits are, exactly, isn't always clear.  You can already take a deferred pension and collect age 60, so getting rehired before doesn't get you all that much.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on May 04, 2019, 08:37:29 AM
You could look at historical GS pay scales and do a comparison to get an idea of what a drop might be.  I am sure there are tables going back further, but this is back through 2007:

https://www.federalpay.org/gs/2019

So if you were a 12 Step 5 in DC for example, you are at $94,520 currently but a 12-5 in 2007 was $75,671.  That is only a 12 year gap, so of course would be an even larger gap if it was 17 instead.

It is also hard to know if low inflation will continue for that long.  A few years of really high inflation in the interim could render the pension not so helpful.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: marion10 on May 04, 2019, 01:30:50 PM
Also- I would never count on being able to get rehired.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 04, 2019, 07:45:36 PM
A few years of really high inflation in the interim could render the pension not so helpful.

Even at normal inflation rates, the lack of inflation protection on a federal pension absolutely eviscerates the early retiree.  I retired at 41 and am expecting roughly 20 years of inflation erosion on my pension.  That eats almost half of it, even if inflation stays at 2%.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DoNorth on May 05, 2019, 03:21:23 AM
I'm a military medical retiree (40 years old) and current term Fed serving overseas.

Did a year as a Fed in DC back in 2014, withdrew my FERS-FRAE contributions and put them in my IRA; I'll have about two years on this position and plan to do the same with my contributions after this assignment is up.

The lack of inflation protection from the time I'm 41 to ~60 almost certainly means those contributions are better sitting in my IRA than waiting almost 20 years for a devalued pension (even if I do over 5 years).

FIRE is next year, will roll TSP to traditional IRA and then over the next several years of retirement, will do the Roth conversion ladder until all the TSP funds have been converted.  Will probably look at another Fed term position sometime around then.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DoNorth on May 05, 2019, 07:04:05 AM
Interesting thread, thanks for all the great info. Quick question - could those looking to retire very early simply leave the government at say 45 and then come back in to a FERS position at say 60 even at a much lower grade and get all the benefits back? My question is based on the idea that my family stops now and travels for several years before coming back when the kids are high school age and re-establishing ourselves for just a few years.

For instance, if I leave now and am making 6 figures but then come back and make much less would my high three be based on a cola adjusted wage from 10 years ago? Assume no.

you're assumption is correct.  I left as 14 step 2 in 2015, (perm position) restarted in 2018 as a 12, step 5(term position), but living in Europe this time.  my high 3 would still count my time as a 14, but none of it would be inflation adjusted.  the pension model is still counting on the fact that you work right up until retirement and that you're highest earnings are usually your last 3.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: afox on May 06, 2019, 10:47:10 AM
Interesting thread, thanks for all the great info. Quick question - could those looking to retire very early simply leave the government at say 45 and then come back in to a FERS position at say 60 even at a much lower grade and get all the benefits back? My question is based on the idea that my family stops now and travels for several years before coming back when the kids are high school age and re-establishing ourselves for just a few years.

For instance, if I leave now and am making 6 figures but then come back and make much less would my high three be based on a cola adjusted wage from 10 years ago? Assume no.

The problem with this plan is that in order to get the the FEHB benefit (basically group insurance with 50% of premiums paid by gov) you need to have been enrolled in FEHB for the 5 years prior to retirement (correct me if im wrong). If you retire at MRA with immediate annuity you can continue FEHB benefit for life (generally only needed till medicare eligibility but invaluable for the period between retirement and medicare age). At least monetarily, the FEHB benefit could be more valuable that the FERS  benefit at least until medicare eligibility age for all but the highest wage earners. Seems like going part time until you reach MRA could be a good compromise so that you retain eligibility for FEHB.  Also, note that in most states COBRA entitles you to 18 months of group insurance after you leave your job for any reason. You pay 100% of the premiums but just having access to the FEHB group plans is a massive benefit especially, even more massive the older you are.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Fomerly known as something on May 06, 2019, 06:51:06 PM
For feds with a job that allows for an MRA of 50 with 20 years of service, does anyone know how it works if you hit 20 years at a younger age?

For example, I understand the deferred/postponed difference for the regular FERS option.  But I wondered if the deferment still had to be to age 62 if you otherwise qualify for a FERS pension at 50? 

For example, if you hit your 20 years of service at age 44, would you be able to quit working at 44 and begin to collect your pension immediately at 50?  Or are the options to work until 50 to get the pension at 50 or quit at 44 and wait to collect until age 57 (MRA with reduction) or 62 to avoid a reduction?

I just was unclear on if one had to work through the date for those eligible for a FERS pension sooner.

Or is this a situation where even the varieties of retirements at 50 with 20 years (LEO, Foreign Service, etc...) would all answer this differently?

Edit: I realized I had the wrong age which undercut my fundamental question of whether completing the 20 would allow for collecting beginning at 50 even if I stopped working at 44 or whatever age I hit 20 years of service at.

Generally the 50/20 rule is for special categories (LEO, Firefighters, air traffic controllers.)  It comes with a out at 25 years with any age.  I'm under this, I get out at 47.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 07, 2019, 08:17:08 AM
Interesting thread, thanks for all the great info. Quick question - could those looking to retire very early simply leave the government at say 45 and then come back in to a FERS position at say 60 even at a much lower grade and get all the benefits back? My question is based on the idea that my family stops now and travels for several years before coming back when the kids are high school age and re-establishing ourselves for just a few years.

For instance, if I leave now and am making 6 figures but then come back and make much less would my high three be based on a cola adjusted wage from 10 years ago? Assume no.

The problem with this plan is that in order to get the the FEHB benefit (basically group insurance with 50% of premiums paid by gov) you need to have been enrolled in FEHB for the 5 years prior to retirement (correct me if im wrong). If you retire at MRA with immediate annuity you can continue FEHB benefit for life (generally only needed till medicare eligibility but invaluable for the period between retirement and medicare age). At least monetarily, the FEHB benefit could be more valuable that the FERS  benefit at least until medicare eligibility age for all but the highest wage earners. Seems like going part time until you reach MRA could be a good compromise so that you retain eligibility for FEHB.  Also, note that in most states COBRA entitles you to 18 months of group insurance after you leave your job for any reason. You pay 100% of the premiums but just having access to the FEHB group plans is a massive benefit especially, even more massive the older you are.

afox, that's a good question, and yes, you're right about the 5-year requirement -- I wonder if there's wiggle room in the language that would allow the break in service to be disregarded so long as you were in FEHB for the requisite time before leaving fed employment and then enrolled immediately upon re-employment, thereby constituting being enrolled for 5 years prior to retirement.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: dude on May 07, 2019, 08:19:47 AM
And whaddya know, my question answered by OPM:

https://www.opm.gov/faqs/QA.aspx?fid=fd635746-de0a-4dd7-997d-b5706a0fd8d2&pid=86c7b3a5-d614-42eb-8070-9f3d3f5068dd

So the 5-year FEHB requirement is not a hindrance to the leave/get re-hired just before retirement strategy!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 07, 2019, 08:59:35 AM
So the 5-year FEHB requirement is not a hindrance to the leave/get re-hired just before retirement strategy!

It's not really in my plan, but it's good to know this particular safety is there if I ever need it.  As a retired fed with many years to wait until traditional retirement age, it's good to know I could theoretically regain FEHB for life by getting another federal position right before my MRA.  Losing lifetime access to heavily subsidized federal health insurance was one of the hardest parts about retiring at age 41.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: afox on May 07, 2019, 12:14:56 PM
thanks dude, good to know, i did not realize this distinction...
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Sugaree on May 07, 2019, 01:23:57 PM
Has anyone looked into using a postponed pension as a way to open up space for a Roth conversion ladder?  Apparently, once you hit MRA+10, you can not take the pension for a few years.  If you had enough in taxable accounts to cover living expenses for the years that you weren't getting the pension, it would free up some room to do the Roth ladder.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on May 07, 2019, 02:39:44 PM
For feds with a job that allows for an MRA of 50 with 20 years of service, does anyone know how it works if you hit 20 years at a younger age?

For example, I understand the deferred/postponed difference for the regular FERS option.  But I wondered if the deferment still had to be to age 62 if you otherwise qualify for a FERS pension at 50? 

For example, if you hit your 20 years of service at age 44, would you be able to quit working at 44 and begin to collect your pension immediately at 50?  Or are the options to work until 50 to get the pension at 50 or quit at 44 and wait to collect until age 57 (MRA with reduction) or 62 to avoid a reduction?

I just was unclear on if one had to work through the date for those eligible for a FERS pension sooner.

Or is this a situation where even the varieties of retirements at 50 with 20 years (LEO, Foreign Service, etc...) would all answer this differently?

Edit: I realized I had the wrong age which undercut my fundamental question of whether completing the 20 would allow for collecting beginning at 50 even if I stopped working at 44 or whatever age I hit 20 years of service at.

Generally the 50/20 rule is for special categories (LEO, Firefighters, air traffic controllers.)  It comes with a out at 25 years with any age.  I'm under this, I get out at 47.

Wow, that is a good caveat to know.  I fall under a special category, but was unfamiliar with 25 at any age working.  That also brings mine below 50 by a few years.  Good stuff!
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Mathew675 on May 08, 2019, 01:49:53 PM
A few years of really high inflation in the interim could render the pension not so helpful.

Even at normal inflation rates, the lack of inflation protection on a federal pension absolutely eviscerates the early retiree.  I retired at 41 and am expecting roughly 20 years of inflation erosion on my pension.  That eats almost half of it, even if inflation stays at 2%.

Thanks Sol, that is essentially what I am looking to avoid but I don't think there is any way around it. I should be ready to retire in a few years savings wise and wanted to know if my pension would be an extra layer of safety on top of my plan. From the retirement formula with close to 20 years of inflation I was trying to see if I should even include it or cash out my FERS. Will need to run some extra numbers on this.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 08, 2019, 06:33:30 PM
I was trying to see if I should even include it or cash out my FERS.

When were you hired?

If you're under the old 0.8% FERS pension contributions (aka prior to 2012), you should definitely keep it because you only get back your contributions, not the total contributions made by you and the government.  Most of the value of your pension is government contributions you can not get back out in any way, except by one drawing a pension.

If you were hired in 2013 or later then you're paying 4.4% of your (after tax!) salary into the pension, and then suddenly the idea of withdrawing your contributions as a lump sum payment starts to look a whole lot more attractive to an early retiree.  If you take that lump sum today and put it in the stock market for 20 years, its' virtually guaranteed to be worth more than your pension after 20 years of inflation losses.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Mathew675 on May 09, 2019, 10:30:22 AM
I was trying to see if I should even include it or cash out my FERS.

When were you hired?

If you're under the old 0.8% FERS pension contributions (aka prior to 2012), you should definitely keep it because you only get back your contributions, not the total contributions made by you and the government.  Most of the value of your pension is government contributions you can not get back out in any way, except by one drawing a pension.

If you were hired in 2013 or later then you're paying 4.4% of your (after tax!) salary into the pension, and then suddenly the idea of withdrawing your contributions as a lump sum payment starts to look a whole lot more attractive to an early retiree.  If you take that lump sum today and put it in the stock market for 20 years, its' virtually guaranteed to be worth more than your pension after 20 years of inflation losses.

I was hired under the new system in 2018. I was planning on buying back a little over 6 years of previous military time and working for another 6 or 7 years. Fairly well paid in my current position with locality area boost of almost 30%. Would have 16-17 years until 62 though when I leave. The biggest reason I wanted to do this was for the ability of my wife to have a steady paycheck should I check out.

However, from what I am reading now, it looks like I will take a 10% hit when I start collecting and then my wife only gets 50% if I die. So the real safety net I am looking at is taking a hit due to the following:
-17 years or so of inflation (make it worth only about 60% in today's dollars)
-10% hit for signing up for spousal benefits
-then the 50% cut on top of that when I pass. Doesn't sound very appealing now.

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 09, 2019, 10:51:40 AM
If it helps push you over the edge, you should also know that your family gets significantly reduced death benefits if you die after leaving federal service.  From some old notes of mine:

Quote
You need to work 10 years for your spouse to have the option of taking an annuity from your federal pension.  If you work 9.9 years they get a lump sum payout instead.

Survivor benefits are complicated.  If you die after separation but before starting your retirement annuity, your surviving spouse should still get the basic death benefit of 50% of final salary plus 15k, as a one time payment.

The monthly survivor benefit is available (if 10 years of creditable service) if you are still an employee when you die, but if you are already separated when you die before reaching retirement age?  The rules suggest the surviving spouse still gets a survivor benefit lump sum described above (if 10 years of creditable service) but children do not, and it only begins on the date the dead spouse would have been eligible for an unreduced annuity or on the day after death at a reduced rate.  That's age 60 if 20 years of service, and age 62 if not, with 10 years of service already done before death.  If employee dies while still employed, the full annuity begins immediately.  Additional benefits are available due to children, up to age 22 if in school or age 18 if not, only if you were were employed at the time of death.  No child benefits are paid if you die after separation.

This was all part of the cost calculation when I early retired.  I had to accept that my pension would become worth roughly half as much as it is today due to the lack of inflation protection (though military pensions DO get inflation protection), and I had to accept the loss of life insurance coverage forever and the federal death benefits described above until I reach age 62.  All of that was ultimately small potatoes, though, compared to the loss of future years of income flowing into my retirement accounts. 

As soon as you retire you start drawing down your nest egg, instead of building it up.  So if you make $100k per year and spend $50k per year, each additional year that you work means $150,000 of differential between your hypothetical net worth in the retire vs don't-retire scenarios.  This is why so many people spend year and years slowly slogging towards their early retirement financial goals, and then suddenly seem to slingshot past them in a hurry.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Peachtea on May 12, 2019, 11:50:26 AM
Iím on FERS FRAE and imo itís a horrible deal, especially for those who are either planning on retiring early or donít end up spending their entire career with the gov. If Iíve done my math right, my 4.4% contribution would be better invested rather than put in the pension in every scenario except staying until MRA at 57. If we were able to opt out or even better opt out for an extra TSP match, I would do it in a heartbeat. I plan on withdrawing my contributions when I leave and rolling them over into my TSP.

15 years of service, full deferred annuity at 62 is $20,887/year not accounting for 23 years of inflation then eating away at it. My 4.4% contribution if invested instead would be $647,709 or 4% yearly draw of $25,908 - and this takes inflation into account.

20 years of service, full deferred annuity at 60 is $29,139/year not accounting for 16 years of inflation. My 4.4% contribution if invested: $679,444 or $27,177/year - accounts for inflation.

25 years of service, full deferred annuity at 60 is $37,714/year not accounting for 8 years of inflation. I believe 8 years of 3% inflation would make it valued at $29,562/year. My 4.4% contribution if invested: $766,216 or $30,648/year - accounts for inflation.

33 years of service, immediate annuity at 57 is $49,782 - no inflation gap since immediate annuity with COLA. My 4.4% contribution if invested: $698,721 or $27,948/year - accounts for inflation. If instead of a pension with me contributing 4.4% and gov 9.6%, I got to keep and invest 4.4% and gov added another 5% TSP match, then additional 5% match would be $794,001. 5% additional match plus my 4.4% invested = $1,492,7722 or $59,708/year.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 12, 2019, 12:47:13 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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: desert_phoenix on May 12, 2019, 04:03:46 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.

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?  Or something else?

I am very lucky that I am under the original FERS by virtue of my AmeriCorps service ending just a few days after the cut-off to get grandfathered in.  I definitely don't look that gift horse in the mouth.  But I do agree with your final sentence and think that the stability of my federal job and the high savings rate it allows in some ways diminishes my drive to go make real impact somewhere.  This is due, in large part, to my memories of the Great Recession.  Things have gone well the past decade, but you never know when the bottom will fall out.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Sugaree on May 13, 2019, 07:31:41 AM
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.

For some of us, it's a calculated trade-off.  I'm here because I took advantage of the co-op program (now called Pathways) to get my second college degree paid for.  I still owe the DoD 4 more years under a continuing service agreement.  It's also the best paying job in my field in my immediate area and my living situation is such that I'd have to make 30% more than I do now just to break even on housing costs (my house is a paid-off family property so I pay property taxes and insurance, but can't sell it and buy somewhere else).  My husband is also a part-time caregiver for his parents, who live two houses down, so that's something that we have to think about too.  It's a frustrating work environment sometimes for sure, and I think that if I were under anything other than the original FERS, the math would be different and we might make different choices. 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol on May 13, 2019, 08:14:26 AM
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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DebtFreeinPhilly on May 13, 2019, 11:06:49 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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: the_fixer on May 13, 2019, 05:26:02 PM
My wife made significantly more and had better benefits in the private sector but it is about the science for her and working in a national lab provides some pretty amazing opportunities although the pace VS what she is used to from industry is a bit of a challenge.

The pay cut compounds each year since she would normally get between 5 - 7% raise in industry compared to the ~2% she is likely to get working for the gov.

Seeing her live her bliss is worth it...

Sent from my Pixel 2 XL using Tapatalk

Title: Re: Any FERS + TSP FIRE folks out there?
Post by: DoNorth 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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Peachtea 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 donít view the benefits as golden handcuffs and will happily skip away to FIRE instead, hopefully in 8 more years (at 13 years of service). Thatís not to say however that I donít have any golden handcuffs...I do and its name is PSLF. But thereís only 5.5 years left to that handcuff instead of 28 years to MRA. (I donít want to derail the thread with a PSLF convo, Iím dotting all my ďIĒs 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 donít feel Iím making the difference I wanted to and that sucks, along with the bureaucracy and politics. But Iím 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 donít align with my values whereas my agencyís 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 Iíd then have to pay off. Iíll take 8 more years where Iím 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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Treeclimber65 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. 
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Johnny Aloha 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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: sol 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.
Title: Re: Any FERS + TSP FIRE folks out there?
Post by: Johnny Aloha 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.