But for reason, that’s not a good thing to some. Go figure. |
I’m sorry. No idea what your are saying. So people enjoy made up fire drills and working late for the same pay? |
That’s after tax dollars or 50k pretaxed contributed into a retirement account every year for 20. Also, medical after retirement maybe additional 15k more per year. |
There isn't a black and white answer to is a fed job REALLY better
1. Pension --- Do the math (this may or may not be a perk depending on your age and salary) - you have to contribute 4.4% to FERS ---In my case -- if I put 4.4% of my salary into my 401k or TSP it would likely be equal to 1M in 30 years (depending on annual rate of return of course) , my FERS payment will likely be roughly 61k annually (depending on where I land for my top 3). That means to break even I need to live to 81... not bad to have, but certainly not worth jumping ship for. 2. Benefits - Compare your plans. My benefits as a contractor were getting more expensive AND more watered down every year - the government has great benefits at a reasonable cost. 3. Leave - Everyone says Feds have good leave, but I was getting 15 days as a contractor and would have jumped up to 20 after 5 years, so I think this may be a wash depending on your employer 4. Salary -- My contractor had completely stopped doing annual pay increases -- The only way to get a real salary bump was to leave or to get a serious promotion. You salary will raise a lot quicker in the government just by staying in your seat. ( https://www.govexec.com/pay-benefits/2022/03/biden-proposed-raise-federal-workers-2023/363666/ ) -- 22k is a big salary hit, but I think 10 or so will come out in the wash by year 3. |
Not to derail the thread, but can you explain where you got the $30k value of the pension—or point to a thread where people have talked about it? It seems like the value of the pension would depend on a lot of variables: how many years you're with the feds, what your salary is, and whether you're paying in at 0.8% or 4.4%. But a rough "value of FERS" estimate would certainly be useful for questions like OP's. |
I use 2500/month pension = 500k when i run the numbers. So 30k pension is worth 500k.
- dp |
Good list. I'd add: 5. Post-retirement health benefits. Being able to keep your FEHB into retirement can be a huge benefit. Also, some comments: #1: The real benefit of FERS is that it's in addition to TSP. You can put as much into the TSP as you would have put into a 401(k), and then add the FERS retirement on top of that. So unless the private employer has a crazy good 401(k) match (better than the TSP match of 1:1 for the first 5%), FERS is "extra." Whether that extra is worth the 4.4% (for a new fed) versus putting the same amount in non-tax-advantaged account is a different question. My main point here is that comparing the 4.4% to what it would earn in a 401(k) or TSP isn't quite the apt comparison, since presumably you'll be maxing out the TSP contribution anyway. #3: Don't forget that feds also get sick time as a completely separate category. A brand new fed gets 13 days of annual leave and 13 days of sick time per year. After three years, that becomes 20 days of annual leave (and 13 days of sick time). Also: some agencies will negotiate the leave accrual for experienced new hires, so OP might be able to start out with 20 days/year. #4: Agencies may also be willing to negotiate starting step. So (1) OP should see if they can do that (if they haven't already), but (b) coming in at a higher step will affect how often they get raises (since grade bumps are only annual until step 4). |
If you make $176 and put in 4.4% that’s $646/month — you need to earn 9% to hit $1M in 30 years. Those are bananapants returns which mean you don’t let up on risk as you head towards to retirement. What numbers were you using, but I think to replicate the pension is harder than just 4.4% savings |
Leave is always tricky. I bet you were getting 20 PTO while Feds get 15 Annual And 11 sick. Feds top out at 26 which I have never seen a contractor giving over 30. |
It must be OP because we get a ton of apps for every job posting. no shortage of people wanting to come in |
That’s because they don’t know any better. |
The best part of the Feds is that it's easy to shine. I can do a million personal errands, laundry, lunch out, kid pick up, etc, and still be the highest performing member of my team. |
This depends on the agency. |
Maybe they know something you don’t? Not possible right? |
Please educate us. Where do you work where the pay is better with a steady 40 hrs and you can know you hard work will lead to a job you can keep into your 60s? |