Anonymous wrote:Normal retirement age for Feds is 57. That's 30 years. How does that amount to 40%?

1. 57 is the minimum retirement age, not normal retirement age.
2. The normal retirement age for people in this country is mid 60s. That gets you to around 40 percent.

Hope this helps, but happy to discuss further if you have difficulties.

Normal retirement age for Feds is 57. That's 30 years. How does that amount to 40%?

Anonymous wrote:
One correction (from a few posts above) is the annuity is NOT 40% of you high 3, it is x%, x being the years of service. You would need 40 years of service to get 40%.

Your correction is incorrect. OP has been working for the Feds for 10 years and is 37. The PP's point was that if he worked till normal retirement age for the Feds the basic annuity would amount to around 40 percent of the high three.

Anonymous wrote:I'm no expert, but I think two things are being confused: the TSP and the FERS annuity. The amount of annuity you get when you retire has nothing to do with what you contribute to your TSP. It is only about your high three salary and how many years you worked. Your TSP is your "private" retirement savings. Your FERS is what the government will (supposedly) pay you in retirement. They are two separate sources of income. Do I have that right?

Yes and no.

TSP is part of the FERS retirement plan. It is like a 401 but has more rules on investments.

Like the person said above FERS has 3 parts: annuity, TSP, and SS.

Even if you don't contribute to TSP the govt. does.

One correction (from a few posts above) is the annuity is NOT 40% of you high 3, it is x%, x being the years of service. You would need 40 years of service to get 40%.

I'm no expert, but I think two things are being confused: the TSP and the FERS annuity. The amount of annuity you get when you retire has nothing to do with what you contribute to your TSP. It is only about your high three salary and how many years you worked. Your TSP is your "private" retirement savings. Your FERS is what the government will (supposedly) pay you in retirement. They are two separate sources of income. Do I have that right?

Anonymous wrote:I've been a fed for 10 years and always saved the max in my TSP. I now have 202,000 and received a statement from TSP saying I'll receive $800 a month from my TSP in retirement. I almost puked at that figure. My house will be paid off, but I will need significantly more $. I'm 37, a GS 14, and also save the max in a Roth IRA. Does anyone understand how retirement works under FERS? I'm not counting on SS being around in 2044. thanks!

Yes, that is the amount that you could get monthly from your FERS after retirement, *IF* you were to stop working that job today. As you contribute more over the rest of your career, the amount you get out will increase.

You really should visit the retirement calculater at choosetosave.org and let it help you figure out how much to save and how much it will pay out after retirement. It will give you a better idea of how to adjust your savings for retirement.

The monthly payout on your TSP statement is based on purchase of an annuity at something like 1.5%, a ridiculous and unprecedented low. By the time 37 y/o OP is ready to retire, you can be assured that returns will be far higher than 400 bucks per hundred thousand saved. Cheer up and keep contributing to TSP.

Consider TSP as one leg of the FERS three-legged stool. One leg is your pension, which will be somewhere around 40 percent of the average of your high-three salary (without locality pay). It will depend on how many years of federal service yiu have. The second leg is Social Security. The third leg is your TSP, which will continue to grow. The $800 is an estimate of how much you would get if you stopped contributing now.

You'll be just fine. Now that you've accumulated a significant amount in your TSP the money will start growing - compounding - much faster due to dividends, as well as capital gains. I expect you'll have a million there by the time you are 55, especially if you keep contributing. And if you add in the 30%+ pension, you will be very comfy in your sunset years.

Anonymous wrote:You can't be FERS at your age. It was phased out.

That makes so sense. You must be thinking of CRS. New employees are FERS.

You can't be FERS at your age. It was phased out.

Ridiculous post.

Even if SS was not around, under your basic benefit, if you work till 65, you will have 38 years service, so will get a pension of 38 * 1.1% of your final salary. Plus the annuity from whatever you save in your TSP over the next 28 years on top of the 200 K you have already saved. So quit bitching and enjoy it.

Don't forget that you're likely to continue working for many more years and your tsp account will continue to grow over that time. So your tsp payout is likely to be substantially more than that.

The opm site has pretty clear explanations of how fers retirement works. It depends on years of service and age st retirement. Do you intend to stay in federal service?

There's a better chance that SS will be around in 2044 than FERS. SS has been 30 years away from "insolvency" for as long as I can remember, and worst case it should still be able to pay 80% of benefits. FERS on the other hand benefits a small group of people and a large portion of the country dislikes them (irrationally).

That said if FERS stays the same, basically you will receive 1% of your salary for each year you work.

I've been a fed for 10 years and always saved the max in my TSP. I now have 202,000 and received a statement from TSP saying I'll receive $800 a month from my TSP in retirement. I almost puked at that figure. My house will be paid off, but I will need significantly more $. I'm 37, a GS 14, and also save the max in a Roth IRA. Does anyone understand how retirement works under FERS? I'm not counting on SS being around in 2044. thanks!