FERS Feds - What is "your number" for retirement?

[Anonymous]

I see these threads all the time but they don't take our Fed annuities into consideration. I'm in FERS so my annuity I think will be somewhere around $45,000 per year. There may be that supplemental social security thing between age 57 and 62 but I'm not sure about that-- if it will still be there in the future...

So then what is "your number" that would cover what you would need beyond the annuity? How will you be making retirement work? A lot of people I know are not planning on retiring at eligibility but to just keep working. I hope not to have to do that.

[Anonymous]

$6M.

[Anonymous]

How do you get an an annuity of 45k per year? Have you been working since 16?

[Anonymous]

We should be 36k soc sec, 20k my fers, 48k his pension, plus (hopefully) 1 million in the 401Ks to cover inflation. Honestly, most of the 401k will probably go as gifts to the kids to pay off their (potential) student loans, as we stick every spare dime in there on the principle that, if everything goes tits up, you can't take out a loan to cover retirement. We do very little as far as college savings goes, otherwise.

These numbers are predicated on us both socking away money to the age of 62, his filing for soc sec and suspending at FRA, and me claiming spousal benefit til I hit 70.

[Anonymous]

What is depressing is that I know people who are covered under the old system, CERS?, who felt that they couldn't retire. I imagine a lot of this question will vary for us depending on where we retire - that is in the DC area or a lower cost of living place. I would guess that we would at least move primary residency to a non-DC address.

[Anonymous]

Re: the annuity, you will receive a % point of your last high three salaries for each year that you worked. If I retire at eligibility I will have 33 years of service, or 1/3 of my highest income per year. Thus $45K per year before taxes.

[Anonymous]

"if everything goes tits up, you can't take out a loan to cover retirement"

"Goes tits up"? Is that a regional expression?

[Anonymous]

Anonymous wrote:Re: the annuity, you will receive a % point of your last high three salaries for each year that you worked. If I retire at eligibility I will have 33 years of service, or 1/3 of my highest income per year. Thus $45K per year before taxes.

Don't forget that your "highest three" salary does not include location adjustments (quite significant for the DC area) - so you need to look at base salary for this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Re: the annuity, you will receive a % point of your last high three salaries for each year that you worked. If I retire at eligibility I will have 33 years of service, or 1/3 of my highest income per year. Thus $45K per year before taxes.

Don't forget that your "highest three" salary does not include location adjustments (quite significant for the DC area) - so you need to look at base salary for this.

I don't think this is true. I'm looking at my FERS personal benefits statements and it computes my high-3 as my actual salary, including locality pay.

[Anonymous]

Anonymous wrote:Re: the annuity, you will receive a % point of your last high three salaries for each year that you worked. If I retire at eligibility I will have 33 years of service, or 1/3 of my highest income per year. Thus $45K per year before taxes.

If you have more than 20 years of service and are over 62 you get 1.1%. It sounds like you're looking at retiring at 57. If you were willing to stick it out to 62, you'd get 42% of your salary instead of 33.

They do include locality pay in the salary calculation. When they say "base salary" they are excluding overtime, bonuses, premium pay (for people who work holidays/weekends), etc.

[Anonymous]

Anonymous wrote:Re: the annuity, you will receive a % point of your last high three salaries for each year that you worked. If I retire at eligibility I will have 33 years of service, or 1/3 of my highest income per year. Thus $45K per year before taxes.

Don't forget that your salary will likely continue to increase with step increases (unless you are at the top of your grade already and don't expect to pursue a promotion.) I'm not clear whether you're factoring that in. I also assume that at some point we'll start getting COLAs again, though of course they're much smaller than a step increase.

[Anonymous]

Mine is $1 million. That does include about $300k inheritance that I received. With pension and SS on top of that I should be okay retiring at 62. I may work after that but only if I feel like it.

[Anonymous]

Is the locality differential pay included in the caculation, or is it simply the base pay? TIA

[Anonymous]

Anonymous wrote:What is depressing is that I know people who are covered under the old system, CERS?, who felt that they couldn't retire. I imagine a lot of this question will vary for us depending on where we retire - that is in the DC area or a lower cost of living place. I would guess that we would at least move primary residency to a non-DC address.

Under the old system, you get 85% of salary, I think, but no social security. Those that "can't" retire are in the low pay bands. Rather than depressing, I think it's sad when the higher pay band people say they "can't" retire. And I hear it a lot. I think it has more to do with fear than money. Sad, sad, sad.