Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m totally confused about determining what age you “retire” at. Say you worked for the government from age 31-35 (5 years total) then left for the private sector. To make the math easy, say your high 3 average was $100,000. If you file for benefits when you are 62, what benefits, if any, are you entitled to?

5% of 100k (which have been eroded by 27 years of inflation so probably won't cover 5% of your living expences)

NP - So then wouldn't it be better to pull out the contributions when you leave the gov't at 35 and then invest them so they have some growth? At 100k over 5 yrs contributing 4.4%, you would have put in 22k, which would be a sizeable chunk to put into an IRA. In contrast the payouts from the annuity would be $5000/yr or about ~$400/month. Is the value of the annuity the fact that that $400/month would be in perpetuity? (Just figuring out how to compare these things against each other.)

Very good question and astute analysis. Employees classified as FERS-FRAE and FERS-RAE should have their pension contributions refunded in this scenario and invest them into an IRA. Meanwhile, regular FERS employees should not have their pension contributions refunded and defer the pension until 62 no matter how far that is away because they paid a pittance for it (0.8% of salary).

Anonymous wrote:

Anonymous wrote:This is very helpful. Can one of the experts give me their thoughts on this scenario?

My DW is a GS 15 10, making $163,000 per year. She's been a federal employee (attorney) for 18.5 years.

She's thinking of switching to the private sector in a few years. She likes working and so plans to work until 65 or later.

Should she wait until after she has 20 years of federal employment to make the switch to the private sector, since she's only 1.5 years away?

And if she doesn't feel strongly about making the switch to the private sector, what about just staying in the current job, which she likes well enough? Thank you.

The salary tables do not indicate that GS 15-10 is paid 163k. Regardless of that, leaving before getting 20 years in would be monumentally stupid.

Wow— I could be your wife, also with a very transferable expertise and 18 years in, except I’m 47 and a 15-8. I am struggling with this same decision. At this point, I am inclined to stay 2 more years for sure to have 20 years in, but still can’t figure out what to do after that. The trade offs of going to a firm seem huge, given the relative comfort of my current position, and my kids will still be in HS and middle school. My marketability also will likely be peaking in about 2 years ( if it isn’t now) due to some new developments in the field. I have received sone expressions of interest from firms/headhunters very recently but haven’t followed up. If I wait 8 more years it will be so much better for the family, but I will have to really work at keeping up my contacts, publishing, etc. to try to maintain marketability. I’m kind of worried my current desirability will evaporate. And that I’ll have missed my chance.

Anonymous wrote:

Anonymous wrote:This is very helpful. Can one of the experts give me their thoughts on this scenario?

My DW is a GS 15 10, making $163,000 per year. She's been a federal employee (attorney) for 18.5 years.

She's thinking of switching to the private sector in a few years. She likes working and so plans to work until 65 or later.

Should she wait until after she has 20 years of federal employment to make the switch to the private sector, since she's only 1.5 years away?

And if she doesn't feel strongly about making the switch to the private sector, what about just staying in the current job, which she likes well enough? Thank you.

The salary tables do not indicate that GS 15-10 is paid 163k. Regardless of that, leaving before getting 20 years in would be monumentally stupid.

Why? What happens with 20 year’s service if you are leaving well before retirement age anyway? Isn’t it just a straight calculation based on number of years?

Anonymous wrote:

Anonymous wrote:My wife is Fed Law Enforcement and has mandatory retirement at 57. If I understand it correctly, she gets 35% of her high 3 after 20 years, and then and additional 1% for each year beyond 20 up to a maximum of 42%.

WoW! Never heard of such a generous federal pension. Regular civil servants hired in the last 30 years (since the late 1980s) get 1% of their highest salary (or 1.1% if you worked for a really long time) times their time of service. So if you worked for 20 years you would get an annual pension worth 20% of your highest salary.

I think FDIC gets an even more generous pension calculation.

Anonymous wrote:My wife is Fed Law Enforcement and has mandatory retirement at 57. If I understand it correctly, she gets 35% of her high 3 after 20 years, and then and additional 1% for each year beyond 20 up to a maximum of 42%.

WoW! Never heard of such a generous federal pension. Regular civil servants hired in the last 30 years (since the late 1980s) get 1% of their highest salary (or 1.1% if you worked for a really long time) times their time of service. So if you worked for 20 years you would get an annual pension worth 20% of your highest salary.

Does the high 3 salary include base + locality pay? Or just base pay?

The instructions for these scenarios are clearly described on OPM’s website. Try typing this into a Google search: OPM FERS. You. Can. Do. It.

Anonymous wrote:This is very helpful. Can one of the experts give me their thoughts on this scenario?

My DW is a GS 15 10, making $163,000 per year. She's been a federal employee (attorney) for 18.5 years.

She's thinking of switching to the private sector in a few years. She likes working and so plans to work until 65 or later.

Should she wait until after she has 20 years of federal employment to make the switch to the private sector, since she's only 1.5 years away?

And if she doesn't feel strongly about making the switch to the private sector, what about just staying in the current job, which she likes well enough? Thank you.

The salary tables do not indicate that GS 15-10 is paid 163k. Regardless of that, leaving before getting 20 years in would be monumentally stupid.

Anonymous wrote:You can't pull out money when you leave the government. It's a pension. You can get it when you retire.

You can pull out your own contributions. No one used to do this when everyone was paying 0.8% but it is worth considering when you pay 4.4%+ and don't have 20 years service.

Anonymous wrote:You can't pull out money when you leave the government. It's a pension. You can get it when you retire.

Not accurate. You can pull out YOUR contributions assuming your aren't eligible for the annuity within 31 days (i.e. you're under age 56) - obviously not the entire amount you could have gotten as an annuity.

You can't pull out money when you leave the government. It's a pension. You can get it when you retire.

Anonymous wrote:

Anonymous wrote:I’m totally confused about determining what age you “retire” at. Say you worked for the government from age 31-35 (5 years total) then left for the private sector. To make the math easy, say your high 3 average was $100,000. If you file for benefits when you are 62, what benefits, if any, are you entitled to?

5% of 100k (which have been eroded by 27 years of inflation so probably won't cover 5% of your living expences)

NP - So then wouldn't it be better to pull out the contributions when you leave the gov't at 35 and then invest them so they have some growth? At 100k over 5 yrs contributing 4.4%, you would have put in 22k, which would be a sizeable chunk to put into an IRA. In contrast the payouts from the annuity would be $5000/yr or about ~$400/month. Is the value of the annuity the fact that that $400/month would be in perpetuity? (Just figuring out how to compare these things against each other.)

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is very helpful. Can one of the experts give me their thoughts on this scenario?

My DW is a GS 15 10, making $163,000 per year. She's been a federal employee (attorney) for 18.5 years.

She's thinking of switching to the private sector in a few years. She likes working and so plans to work until 65 or later.

Should she wait until after she has 20 years of federal employment to make the switch to the private sector, since she's only 1.5 years away?

And if she doesn't feel strongly about making the switch to the private sector, what about just staying in the current job, which she likes well enough? Thank you.

How old is she is now makes a difference in the answer.

Not to mention what her practice area is and how marketable it is along with how marketable she is re: business origination. Some practice areas in government are transferable and others are not. Honestly you should start a separate thread because you're asking a multi-faceted question that will probably derail this thread from the original topic.

Thank you. It's a very transferable area, and so she's not worried about that. I don't want to get too specific on the area.

Anonymous wrote:I’m totally confused about determining what age you “retire” at. Say you worked for the government from age 31-35 (5 years total) then left for the private sector. To make the math easy, say your high 3 average was $100,000. If you file for benefits when you are 62, what benefits, if any, are you entitled to?

5% of 100k (which have been eroded by 27 years of inflation so probably won't cover 5% of your living expences)

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is very helpful. Can one of the experts give me their thoughts on this scenario?

My DW is a GS 15 10, making $163,000 per year. She's been a federal employee (attorney) for 18.5 years.

She's thinking of switching to the private sector in a few years. She likes working and so plans to work until 65 or later.

Should she wait until after she has 20 years of federal employment to make the switch to the private sector, since she's only 1.5 years away?

And if she doesn't feel strongly about making the switch to the private sector, what about just staying in the current job, which she likes well enough? Thank you.

How old is she is now makes a difference in the answer.

Not to mention what her practice area is and how marketable it is along with how marketable she is re: business origination. Some practice areas in government are transferable and others are not. Honestly you should start a separate thread because you're asking a multi-faceted question that will probably derail this thread from the original topic.

Good question. She is 48 years old.

So when I asked I was wondering if there was an obvious answer (i.e. she was 58.5 and could draw immediately by staying 18 months)

I don't think her potential fed pension drives her decision at that age. It's more: Will she make considerably more on the outside? Will she be able to work to the same age? If not, will the extra pay over fewer years balance out? Those are the financial side, but it's really about where she will enjoy the work and pace the most if you don't need the extra money.