What do you say when people keep on asking you when you plan on retiring?

[Anonymous]

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Anonymous wrote:In my agency, folks tend to work a long time, so retirement chit chat is more about crowd-sourcing TSP strategies or possibly trying to see if someone has a successful spouse that obviates the need to maximize pension.

The reality is that even for those folks that have 30 years in at 55, 1) they still have to work until 57 for an immediate retirement 2) there are pretty significant pension penalties for retiring before 62 regardless of how many years one has in 3) if someone is at MRA but has less than 30 years in, those penalties (5% for every year one is under 62) are REALLY significant.

There are a bunch of really optimistic folks in say r/govfire, but many of them are not looking to live a DC metro-area lifestyle. ONE of my coworkers will hit 30 years before MRA, but most of my team started around 40 and have about 10 years in (several converted from contractor positions). There are only a handful of position types where folks could retire at 50-55 with a penalty-free pension, and those are mostly law enforcement.

keep plugging away, contribute the max to your TSP, and when folks ask about your retirement plans just smile and tell them you love your job.

The reality of my personal situation is that I'll need to work until at least 62, but probably 65, and that seems par for the course for most of the people I work with. A lot of actual non-feds tend to have a really optimistic idea of what the current pension plan looks like and the rules around them, and hear the stories of say, FBI agents that can retire at 50 and then make big consulting dollars while collecting a pension, but that does not describe the bulk of federal employees.

Wait, if at MRA (57) and you have 30 years, aren't you good? No penalty

The multiplier goes up to 1.1 at age 62. So if your MRA is 57 with 30 years and you retire then you get your average high 3 salary x 30%. If you wait until you're 62 you get your larger average high 3 salary x 35% x1.1, which goes up to 38.5%. If you can hold out until age 62 that can be a big difference in pension income.

But most of that difference is from working five extra years, not the 0.1% difference in the multiplier. The pension will always be larger if you work longer, but at some point you have to accept the trade off between more retirement years versus more pension money.

Two factors 1) the 10% bonus you get at 62, and 2) the fact that you will not receive cost-of-living adjustments until you turn 62.

So a GS-14 who retires at 57, making 166k a year with say 32 years in might have a pension of $54k. That pension will not increase until COLAs apply, for 5 years. Or they could coast along for another 5 years (banking that salary and raises), and have a pension of $72k a year, and get annual cost-of-living increases thereafter.

Maybe you did good and your TSP is 3 mil and so that extra pension money won't be noticed. But for a lot of folks, $18k a year is a lot to leave on the table.

But you missed my point, which is that most of the difference comes from staying in the workforce and getting the additional years, not the additional 0.1%. But it’s always true that more years (and presumably higher salary) will get you a higher benefit than fewer. It’s not some “penalty” to retire sooner, just a choice for more years of retirement instead of higher benefit. That’s the trade-off I mentioned.

In your example of a person making $166k, at 1% and 32 years they would have a benefit of just over $53k. But someone with the same salary and years at 1.1% gets $58k. It’s not a massive difference.

Instead, the extra benefits come from the additional years and higher salary used in the calculation. But that’s as true for retiring at 67 as 62, and retiring at 72 instead of 67. Each five years in your example would get you an extra ~$9k/year, not even including the higher salary (so probably more like $12-15k in reality). The point is you have to pull the trigger at some point. For some people, including many that I’ve known personally, that was before they turned 62.

Different poster but I take your point. If I can afford to retire at my MRA of 57 I will, though without access to the tsp until 59.5 I would need significant additional income. If I’m still in the federal workforce at 60 or 61 I would probably still around until the multiplier kicks in at 62, seems worth it

Rule of 55 would let you tap TSP at 57.

[Anonymous]

I can never retire.

My spouse hasn't worked in 18 years due to two severe, back to back auto accidents where our costs and his lost years of an earned salary have many times exceeded the other drivers' policies, and due to complex PTSD caused by childhood abuse.

But good for those who can afford to do so/haven't experienced such catastrophic events. I don't blame them at all for enjoying the short time we have here on this planet by setting a retirement date and sticking to it. Just be nice to me when you see me at the Walmart greeting y'all, ok?🙏

[Anonymous]

Lots of people are in your situation, including lots of feds. I have a neighbor who is a fed and just turned 50 and he recently told me he will be working until 70 because between his divorce and saving for kids' college there's no way he can retire any sooner.

The people asking this of you are uncouth. But it's not everyone-- most people understand how personal that issue is and don't go around assuming.

[Anonymous]

I am a younger employee who has asked my older colleagues this question because my favorite people keep retiring on me. I will admit that I need my older colleagues because they know more than I do and I can't do the work alone. I am trying to learn as much and I can from them but it takes time. I usually am pretty forthcoming that they are full of knowledge and I love working with them, so they realize the question is coming from a good place. Also I would never ask anyone under 60 this question. And yes for some bizarre reason, I know how old most of my coworkers are.

[Anonymous]

Anonymous wrote:OP here, thanks to everyone--good advice here! It is not the boss or younger coworker asking, but coworkers about the same age--I will try some of the comebacks mentioned here Appreciated the advice about the boss asking from several PP's, if that ever happens.

Think it was just getting me down, because it seemed like most of the people I am meeting (even socially) who are my age or older were asking me this, and I have years to go before retirement. Just seems much more common in this area with people over a certain age.

Some of your co-workers may be counting the days until they hit 30 years of service and can retire, and that's why they ask. I've had a few co-workers retire in their fifties. The ones I knew who retired that young fit two categories. The first was people who have abundant family resources and put enough in TSP that the combined resources were enough for their needs. A more unfortunate category was some people who could not keep pace with technology and procedure changes at my work and were on track to get fired if they did not leave.

[Anonymous]

Say “i like working. No plans to retire anytime soon.” Even if it’s not true it’s the best way to shut it down in a positive way.

[Anonymous]

"When are you going to buy me that winning lottery ticket?"

[Anonymous]

We have a guy at work with who is 71. His wife passed away years ago and his two kids are grown and moved away. He lives near the office and likes his job. What is that to anyone else?

I would think it would be rude to ask him and he is 71.

[Anonymous]

Why do you ask?

[Anonymous]

Already retired. Will be looking for a part time job that I would enjoy. Need to make ca $10k a year to be able to fund my Roth.

[Anonymous]

Anonymous wrote:Already retired. Will be looking for a part time job that I would enjoy. Need to make ca $10k a year to be able to fund my Roth.

What type of part time job do you think you’ll do? I’m not retired yet, but plan on wanting/needing a small pt time job after my “real” job.

[Anonymous]

Strange, I am 54 years old, in a senior management role and I have never been asked that question. Very odd.

[Anonymous]

how crazy and rude for them to ask. Many feds actually work into their late 60s or more because they enjoy the work, get plenty of time off, and enjoy the pay.