How do you calculate the value of your federal pension?

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's worth less than people think. I was making a touch over $200k with the government. I ran the numbers and to stay and retire, it would only make an additional $25k per year (over the 55k-ish that I am already going to make). You can earn that much- easily- with 500k investment in the stock market. I was offered a private sector position at 650k per year. Total no brainer, I took the job. People told me I was crazy to miss the gains on my pension but that math isn't mathing.

Very few Fed employees are in the position to go from the Fed to a 650k job. The real decision making is for those GS 13/14/15 with their low six figures salaries and debating giving up 150k Fed income with the pension promise for a 200k private sector job. If it happens.

I'd agree if over 45 and planning to retire at 65, stick with the Fed for job security and ride it out 20 years and get the guaranteed pension.

This was my DH except he became a Fed at 40 and only had a couple years of federal service, so he wasn’t going to have a huge pension at retirement. He loved his work but took a private sector job making $70K more.

I’m a Fed with 15 years of service, making $170K. I would need a lot more than a $70K raise to walk away. Aside from the pension issue, my job is a lot more secure than DH’s was.

[Anonymous]

I'm a federal employee ( GS12) with 12 years of service. Nobody mentioned that federal employees have to pay certain % of their paycheck into the pension system. I think for me is 6 or 8%, so it's not like we get pension for free. I'm surprised nobody mentioned that here.

[Anonymous]

Anonymous wrote:I'm a federal employee ( GS12) with 12 years of service. Nobody mentioned that federal employees have to pay certain % of their paycheck into the pension system. I think for me is 6 or 8%, so it's not like we get pension for free. I'm surprised nobody mentioned that here.

Because those of us who have been in longer don't pay that. Shhhhh

[Anonymous]

GS14, 33 years in. In my 50s. Plan to retire at 62.
I’m part of the “can’t beat a pension” crew except if you make over $250k
My 88 year old mother is almost all the way thru her savings… and probably going to live another 5-10 years. She will literally run out of savings in March based on her current spending, and then will only have social security.
I’m not doing that to my kids.

[Anonymous]

I’m in the same boat as PP. I’m in my late 50’s, topped out GS 14, 32 year in the government. I’m good at my job, I have no management responsibilities and I like it. I like having a paycheck and I’m one of the few still WAH full time, so I may not retire at 62.

By my calculations my pension will be between 80 and 90K per year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's worth less than people think. I was making a touch over $200k with the government. I ran the numbers and to stay and retire, it would only make an additional $25k per year (over the 55k-ish that I am already going to make). You can earn that much- easily- with 500k investment in the stock market. I was offered a private sector position at 650k per year. Total no brainer, I took the job. People told me I was crazy to miss the gains on my pension but that math isn't mathing.

Very few Fed employees are in the position to go from the Fed to a 650k job. The real decision making is for those GS 13/14/15 with their low six figures salaries and debating giving up 150k Fed income with the pension promise for a 200k private sector job. If it happens.

I'd agree if over 45 and planning to retire at 65, stick with the Fed for job security and ride it out 20 years and get the guaranteed pension.

This was my DH except he became a Fed at 40 and only had a couple years of federal service, so he wasn’t going to have a huge pension at retirement. He loved his work but took a private sector job making $70K more.

I’m a Fed with 15 years of service, making $170K. I would need a lot more than a $70K raise to walk away. Aside from the pension issue, my job is a lot more secure than DH’s was.

This is what I believe in. I am in a sector that could pay a lot more in private entities but I enjoy what I do and my field is always in demand. The more you invest in pension, the better it continues to get and I wouldn't give-up my federal job for $70K raise. There is a reason it is called golden handcuff. lol

[Anonymous]

rule of thumb is that if you start getting $x at age 62 in pension then your pension is worth 15X$ if you go and buy a lifetime annuity with cola riders at the age of 62. There are other factors that come into play but this is round about the way you can calculate the worth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm a federal employee ( GS12) with 12 years of service. Nobody mentioned that federal employees have to pay certain % of their paycheck into the pension system. I think for me is 6 or 8%, so it's not like we get pension for free. I'm surprised nobody mentioned that here.

Because those of us who have been in longer don't pay that. Shhhhh

You pay 4.4% if you are hired after 2014 and before 2012, it is 0.8% which is nothing for the benefit you get.

[Anonymous]

With the federal govt you get two pensions. The defined benefit pension and the Thtrift Savings Plan. Most jobs don’t offer a defined benefit plan these days.

[Anonymous]

Anonymous wrote:With the federal govt you get two pensions. The defined benefit pension and the Thtrift Savings Plan. Most jobs don’t offer a defined benefit plan these days.

only FERS is the pension. The TSP is basically a 401k-- it's your contributions plus up to a 5% match from the employer. You can convert some or all of it to an annuity on retirement but that's a terrible idea.