Quantifying Value of Federal Benefits for Private Sector

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But a government guaranteed pension of $60k a year until you die is worth exponentially more than the estimated value of what you'll likely actually pull out. Let's say actuarial tables estimate you'll only live 20 years after retirement, so you're talking about $1.2million of pension payments (let's ignore inflation to keep it simple). But you MAY live 40 more years. Which is $2.4million. If you don't have a pension, you have to put aside NOW so much more money than $2.4million if you want to guarantee yourself $60k a year until the unknown date that you die. You have to protect against inflation, market swings, etc. So the fed pension is worth a LOT more than the actuarial value of it.

This is what I've intuitively thought. I would love to see the hard numbers in some sort of online calculator or something.

So, you're assuming that you will make approximately $190K for your top three years and that's how you'll end up with $60K/annually for life? It's unclear your age, but that's a good amount of COL increases and step increases to end there.

I'm not OP, sorry for the confusion. I was assuming high-3 was 165,000, but now that I look at the salary table again, I see that it tops out at $161,900. I'm only six steps from there. I ran it again and I think I'm doing the calculation correct (1.1% x 161,900 x 32).

Absent qsi, six steps is wayyyyyyy in the future.

We get step increases every year.

Oh, nevermind. I see what you mean re: within grade increases. https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/

I never stayed at a grade long enough to realize some steps were more than a year. It doesn't change the calculation for me, but thanks for pointing it out!

[Anonymous]

Anonymous wrote:How does job security factor into your analysis? It's obviously great in the federal sector and very bad at a private law firm (in other words, the knock on the door and the hey, got a few minutes, talk and resulting layoff can happen anytime). This played a big role in my decision--a jump from a 15 to a firm was only worth it for double the pay.

I'm not in law, I'm in IT, but i worked a government job for a year and wanted to kill myself due to the system and the people i was surrounded by (entey level so i suppose i wasnt surrounded by the best and brightest). I don't see how job security even matters.

I'm grazing 200k as a sales engineer, plus I have RSUs, which have nicely padded my financial long term security. I'd have to be laid off a loooooooong time before job security would matter.

I'm 32. What does the average 32yr old make in government with 10 years out of undergrad? I can't imagine if you make over 180k with good benefits in the private sector in your early 30s job security for a salary 70% of that makes much sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But a government guaranteed pension of $60k a year until you die is worth exponentially more than the estimated value of what you'll likely actually pull out. Let's say actuarial tables estimate you'll only live 20 years after retirement, so you're talking about $1.2million of pension payments (let's ignore inflation to keep it simple). But you MAY live 40 more years. Which is $2.4million. If you don't have a pension, you have to put aside NOW so much more money than $2.4million if you want to guarantee yourself $60k a year until the unknown date that you die. You have to protect against inflation, market swings, etc. So the fed pension is worth a LOT more than the actuarial value of it.

This is what I've intuitively thought. I would love to see the hard numbers in some sort of online calculator or something.

So, you're assuming that you will make approximately $190K for your top three years and that's how you'll end up with $60K/annually for life? It's unclear your age, but that's a good amount of COL increases and step increases to end there.

I'm not OP, sorry for the confusion. I was assuming high-3 was 165,000, but now that I look at the salary table again, I see that it tops out at $161,900. I'm only six steps from there. I ran it again and I think I'm doing the calculation correct (1.1% x 161,900 x 32).

Absent qsi, six steps is wayyyyyyy in the future.

We get step increases every year.

Oh, nevermind. I see what you mean re: within grade increases. https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/

I never stayed at a grade long enough to realize some steps were more than a year. It doesn't change the calculation for me, but thanks for pointing it out!

[Anonymous]

Anonymous wrote:

Anonymous wrote:How does job security factor into your analysis? It's obviously great in the federal sector and very bad at a private law firm (in other words, the knock on the door and the hey, got a few minutes, talk and resulting layoff can happen anytime). This played a big role in my decision--a jump from a 15 to a firm was only worth it for double the pay.

I'm not in law, I'm in IT, but i worked a government job for a year and wanted to kill myself due to the system and the people i was surrounded by (entey level so i suppose i wasnt surrounded by the best and brightest). I don't see how job security even matters.

I'm grazing 200k as a sales engineer, plus I have RSUs, which have nicely padded my financial long term security. I'd have to be laid off a loooooooong time before job security would matter.

I'm 32. What does the average 32yr old make in government with 10 years out of undergrad? I can't imagine if you make over 180k with good benefits in the private sector in your early 30s job security for a salary 70% of that makes much sense.

Well, the relevant example is law. A 32 yo at a big g firm could be clearing 350K, easily. But if he or she is not a partner....

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How does job security factor into your analysis? It's obviously great in the federal sector and very bad at a private law firm (in other words, the knock on the door and the hey, got a few minutes, talk and resulting layoff can happen anytime). This played a big role in my decision--a jump from a 15 to a firm was only worth it for double the pay.

I'm not in law, I'm in IT, but i worked a government job for a year and wanted to kill myself due to the system and the people i was surrounded by (entey level so i suppose i wasnt surrounded by the best and brightest). I don't see how job security even matters.

I'm grazing 200k as a sales engineer, plus I have RSUs, which have nicely padded my financial long term security. I'd have to be laid off a loooooooong time before job security would matter.

I'm 32. What does the average 32yr old make in government with 10 years out of undergrad? I can't imagine if you make over 180k with good benefits in the private sector in your early 30s job security for a salary 70% of that makes much sense.

Well, the relevant example is law. A 32 yo at a big g firm could be clearing 350K, easily. But if he or she is not a partner....

Even better. Who cares about job security if said person is making 350k? It's not like the person would suddenly become unemployable. Ehat would a 32yr old government lawyer make anyways? Half that? Less?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How does job security factor into your analysis? It's obviously great in the federal sector and very bad at a private law firm (in other words, the knock on the door and the hey, got a few minutes, talk and resulting layoff can happen anytime). This played a big role in my decision--a jump from a 15 to a firm was only worth it for double the pay.

I'm not in law, I'm in IT, but i worked a government job for a year and wanted to kill myself due to the system and the people i was surrounded by (entey level so i suppose i wasnt surrounded by the best and brightest). I don't see how job security even matters.

I'm grazing 200k as a sales engineer, plus I have RSUs, which have nicely padded my financial long term security. I'd have to be laid off a loooooooong time before job security would matter.

I'm 32. What does the average 32yr old make in government with 10 years out of undergrad? I can't imagine if you make over 180k with good benefits in the private sector in your early 30s job security for a salary 70% of that makes much sense.

Well, the relevant example is law. A 32 yo at a big g firm could be clearing 350K, easily. But if he or she is not a partner....

Even better. Who cares about job security if said person is making 350k? It's not like the person would suddenly become unemployable. Ehat would a 32yr old government lawyer make anyways? Half that? Less?

32 year old government lawyer- GS 15 Step 2, 136K. Counterparts who don't have the 15 quite yet are at GS14 Step 4-6, so around $125K or so.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How does job security factor into your analysis? It's obviously great in the federal sector and very bad at a private law firm (in other words, the knock on the door and the hey, got a few minutes, talk and resulting layoff can happen anytime). This played a big role in my decision--a jump from a 15 to a firm was only worth it for double the pay.

I'm not in law, I'm in IT, but i worked a government job for a year and wanted to kill myself due to the system and the people i was surrounded by (entey level so i suppose i wasnt surrounded by the best and brightest). I don't see how job security even matters.

I'm grazing 200k as a sales engineer, plus I have RSUs, which have nicely padded my financial long term security. I'd have to be laid off a loooooooong time before job security would matter.

I'm 32. What does the average 32yr old make in government with 10 years out of undergrad? I can't imagine if you make over 180k with good benefits in the private sector in your early 30s job security for a salary 70% of that makes much sense.

Well, the relevant example is law. A 32 yo at a big g firm could be clearing 350K, easily. But if he or she is not a partner....

Even better. Who cares about job security if said person is making 350k? It's not like the person would suddenly become unemployable. Ehat would a 32yr old government lawyer make anyways? Half that? Less?

32 year old government lawyer- GS 15 Step 2, 136K. Counterparts who don't have the 15 quite yet are at GS14 Step 4-6, so around $125K or so.

A 32 year old who does not make partner, however, it in fact unemployable at other firms and therefore will never make that salary again. At that point, they need to move into government or in house, both of which have pretty comparable salaries in DC. So yeah, if you're a big firm 32 year old lawyer, you get a brief 5 year burst of very high income (say, 3rd through 7th year associate) but after that, you're on your own. That's why government job security matters.

[Anonymous]

Anonymous wrote:I actually think pension is the most difficult aspect to quantify.

There's a line on your paystub that notes the employer and employee contributions to FERS. That's a good starting point.