Thinking about becoming a Fed - tell me about the retirement plan/pensions

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can someone chime in on how Fed health insurance works during retirement? Hubby got in his 20, then career changed out of fed service. Can he access the health insurance when he decides to draw on his FERS pension (at 62+) or is that only available if you are working as a fed when you enter retirement?

You must have it for 5 years prior to retiring.

He did, but the question is the gap. Since he stopped working as a fed, can he still get the insurance when he takes retirement if he hasn't worked as a fed in years?

I think pp meant 5 years leading to retirement. Your DH hasn’t

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Go work for a financial regulator government agency.
They need IT people. The best pension is at the Federal Reserve Board or CFPB. No retirement contributions on your end + the retirement payout is better than FERS.

FERS is the regular federal pension system. It requires new federal employees to pay 4% of salary into the system.

FDIC and OCC have the best thrift/401K matching programs - 10% of salary.

DP. Is the CFPB/Fed pension better, though? It seems like it could be getting worse and worse.

The Soc Sec Wage Base or whatever it is called keeps getting lifted, and that is what is used to calculate the benefit. The Fed uses a certain % rate multiplier of income below that wage basis to get your benefit and a different % rate of income above that S.S. figure. When the Wage Basis keeps going up, the benefit gets smaller and smaller. Unless you retire soon.

There is no employee contribution to the CFPB/Fed pension. That is much better than contributing 4%.

Yes there is...

FERS
(01/01/1987 - 12/31/2012) 7% of Base Pay is deducted:

0.8% to FERS Basic Benefit Plan

6.2% to Social Security

FERS-RAE
(01/01/2013 - 12/31/2013) 9.3% of Base Pay is deducted:

3.1% to FERS Basic Benefit Plan

6.2% to Social Security

FERS-FRAE
(01/01/2014 - Current) 10.6% of Base Pay is deducted:

4.4% to FERS Basic Benefit Plan

6.2% to Social Security

Wow. I started as a fed in 2011 at 25. I didn’t realize what I better deal I had than people starting after me.

Same. No wonder my agency is having trouble recruiting from the public - they lose 4.4% of their check right off the bat to pension which is only good if you do 30 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Go work for a financial regulator government agency.
They need IT people. The best pension is at the Federal Reserve Board or CFPB. No retirement contributions on your end + the retirement payout is better than FERS.

FERS is the regular federal pension system. It requires new federal employees to pay 4% of salary into the system.

FDIC and OCC have the best thrift/401K matching programs - 10% of salary.

DP. Is the CFPB/Fed pension better, though? It seems like it could be getting worse and worse.

The Soc Sec Wage Base or whatever it is called keeps getting lifted, and that is what is used to calculate the benefit. The Fed uses a certain % rate multiplier of income below that wage basis to get your benefit and a different % rate of income above that S.S. figure. When the Wage Basis keeps going up, the benefit gets smaller and smaller. Unless you retire soon.

There is no employee contribution to the CFPB/Fed pension. That is much better than contributing 4%.

Yes there is...

FERS
(01/01/1987 - 12/31/2012) 7% of Base Pay is deducted:

0.8% to FERS Basic Benefit Plan

6.2% to Social Security

FERS-RAE
(01/01/2013 - 12/31/2013) 9.3% of Base Pay is deducted:

3.1% to FERS Basic Benefit Plan

6.2% to Social Security

FERS-FRAE
(01/01/2014 - Current) 10.6% of Base Pay is deducted:

4.4% to FERS Basic Benefit Plan

6.2% to Social Security

You can’t read. The federal reserve pension is not the same as fers.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Go work for a financial regulator government agency.
They need IT people. The best pension is at the Federal Reserve Board or CFPB. No retirement contributions on your end + the retirement payout is better than FERS.

FERS is the regular federal pension system. It requires new federal employees to pay 4% of salary into the system.

FDIC and OCC have the best thrift/401K matching programs - 10% of salary.

DP. Is the CFPB/Fed pension better, though? It seems like it could be getting worse and worse.

The Soc Sec Wage Base or whatever it is called keeps getting lifted, and that is what is used to calculate the benefit. The Fed uses a certain % rate multiplier of income below that wage basis to get your benefit and a different % rate of income above that S.S. figure. When the Wage Basis keeps going up, the benefit gets smaller and smaller. Unless you retire soon.

I worked at the Fed and agree with this. Yes, as the SS integration wage increases, more of your salary falls under the lower multiplier, essentially reducing your benefit. However, to calculate your benefit, they use a rolling average of the integration amount, so it changes less quickly than the integration wage limit itself. Also, if you retire before full retirement age, there is NO COLA until 62 and no supplementary offset for social security. For the pension to be worth the effort, you need to put in a number years of service, earn a high wage, and retire at 62.

[Anonymous]

Some Federal jobs don’t give pensions. Mine for example (an AD-administratively determined—position came with no pension, even 20 years ago. Instead they contribute (quite generously) into a 403b plan for me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Go work for a financial regulator government agency.
They need IT people. The best pension is at the Federal Reserve Board or CFPB. No retirement contributions on your end + the retirement payout is better than FERS.

FERS is the regular federal pension system. It requires new federal employees to pay 4% of salary into the system.

FDIC and OCC have the best thrift/401K matching programs - 10% of salary.

DP. Is the CFPB/Fed pension better, though? It seems like it could be getting worse and worse.

The Soc Sec Wage Base or whatever it is called keeps getting lifted, and that is what is used to calculate the benefit. The Fed uses a certain % rate multiplier of income below that wage basis to get your benefit and a different % rate of income above that S.S. figure. When the Wage Basis keeps going up, the benefit gets smaller and smaller. Unless you retire soon.

There is no employee contribution to the CFPB/Fed pension. That is much better than contributing 4%.

Yes there is...

FERS
(01/01/1987 - 12/31/2012) 7% of Base Pay is deducted:

0.8% to FERS Basic Benefit Plan

6.2% to Social Security

FERS-RAE
(01/01/2013 - 12/31/2013) 9.3% of Base Pay is deducted:

3.1% to FERS Basic Benefit Plan

6.2% to Social Security

FERS-FRAE
(01/01/2014 - Current) 10.6% of Base Pay is deducted:

4.4% to FERS Basic Benefit Plan

6.2% to Social Security

You can’t read. The federal reserve pension is not the same as fers.

Exactly. It’s a big difference for new employees. In addition, the match is higher for the investment portion.

[Anonymous]

Anonymous wrote:I am a former fed and my husband is a current fed. So here's the deal, the pension is not as good as it once was. You have to work at least 5 years to qualify and you can't get it until you are 62 in most cases (a few exceptions). How old are you and how many more years do you plan to work? If my husband stays put 30 years (he's 20 in) he will get 33% of his salary. But he started in his 20s.

Agree. My husband was a former fed and has much better pension than me who only have 8 years in government and more money is taken from my paycheck toward my pension. It doesn't pay off, we had people leaving to private sector for more money in general.

[Anonymous]

No, pension does not come out of TSP to answer OPs question. Also- no you don’t need to be 62 to get the pension.

[Anonymous]

Hi OP. Your question is a confusing one to answer because there are different systems in place based on what year people entered. The pension has gotten progressively worse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can someone chime in on how Fed health insurance works during retirement? Hubby got in his 20, then career changed out of fed service. Can he access the health insurance when he decides to draw on his FERS pension (at 62+) or is that only available if you are working as a fed when you enter retirement?

You must have it for 5 years prior to retiring.

He did, but the question is the gap. Since he stopped working as a fed, can he still get the insurance when he takes retirement if he hasn't worked as a fed in years?

You must have it for the 5 years directly preceding the retirement.

No, I don’t believe this is correct. Plenty of folks who work with me are contractors on their companies’ plan - and they are former feds eligible to buy into federal health care when they retire. (All we’re smart enough to stay on Fed plan).

[Anonymous]

Going to retire after 27 yrs, pension will be close to 50k a year.

[Anonymous]

For FEHB, my understanding is that you need to either retire from a federal job OR qualify for a postponed retirements (which means you worked until your minimum retirement age (MRA) but opted to postpone receiving your FERS annuity). If you’re doing deferred retirement, which means you’ve left the federal government before reaching your MRA and are waiting to receive your FERS annuity.

I found this explainer helpful: https://plan-your-federal-retirement.com/fers-deferred-retirement-vs-fers-postponed-retirement/

I’ve got 20 years of federal service, but would need to work another 10 to reach my MRA. While I would love to have the FEHB benefit, I’m not sure I can stick it out for another decade!

FERS is a nice benefit as it offers a defined pension benefit, esp if you’ve got 20+ years of federal service. But you still need a healthy TSP plus SS in order to have a comfortable retirement.

[Anonymous]

Anonymous wrote:Going to retire after 27 yrs, pension will be close to 50k a year.

Is that before or after tax? Just wondering how this is going to play out for me. I'll only have 20 years.

[Anonymous]

I’m also a fed who was hired after they implemented the 4.4% requirement for the pension. It makes it so much harder to invest in the TSP.

But honestly I think the retirement health benefits are the real incentive. A friend works for a local county and will get roughly 90% of his working pay in retirement between social security and pension. But his health insurance is going to suck. The feds offerings in retirement make it worthwhile to stay. In my case at least.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Going to retire after 27 yrs, pension will be close to 50k a year.

Is that before or after tax? Just wondering how this is going to play out for me. I'll only have 20 years.

Before taxes and its actually 54k.