Anonymous wrote:

Anonymous wrote:
...
The Fed Dream = Retiring at 57 with 30+ years of service, and then immediately collecting each month a full & unreduced pension + a check from TSP that's drawing down a (hopefully) $2mil+ balance + a $1,300 check from the FERS Social Security Supplement until turning 62. Plus a reasonable-cost health/vision/dental coverage plan for life, along with great survivor benefits too. And then waiting all the way until 70 to collect SS.


But if you're a new fed hired after 01/01/2013, then you're screwed because of FERS-(F)RAE. You get the same pension, but are going to pay a lot more upfront for it.

Can this poster embellish a bit more on "The Fed Dream?" My DH is a federal employee, and he knows the details of retirement, etc. (He's 44 years old with 15 years of service, an annual salary of $158,000, and a TSP balance of $512,000.) Here are a few questions:

(1) Do I understand correctly that, in the FERS system, you get 30% of your highest salary each year in retirement if you worked 30 years?
(2) Is the FERS Social Security Supplement something that you pay for as an optional item?
(3) Do federal employees really get a reasonable-cost health/vision/dental coverage plan for life? (Can you embellish?)

Thank you!

OP here on the Fed Dream.

First, an assumption... born after 1970 = Minimum Retirement Age (MRA) of 57 = https://www.opm.gov/retirement-services/fers-information/eligibility/

For a full unreduced pension on FERS, those eligible can retire with 30 years of service at 57, or with 20 years at 60.

1) Pension would actually be 32% of high-3 average. (Retirees get 1.1% for their first 20 years of service if retiring at 62 with 20 years, or at MRA with 30 years.)
2) FERS SS Supplement is automatic, but you have to retire to get it. Calculation = ((# yrs of service / 40) x SS estimate at 62).
Example: Fed works 32 years and has a SS estimate at 62 of $1500. His/her FERS SS Supplement would be $1,200/mo from 57 until turning 62.
(FERS SS Supplement was intended by Congress to "bridge the gap" between retiring and collecting SS for FERS participants. Very few get it, because most keep on working past 62.)
3) If you retire, are eligible for an immediate annuity and currently covered under FEHB, you will have access the fed subsidized health/vision/dental plans for you and your spouse until you both pass away.

Anonymous wrote:Here's some info on the supplement. OPM has info too which you might want to check if you really need definitive info.

http://www.plan-your-federal-retirement.com/fers-supplement.html

Thank you for posting about the FERS Supplement. I never heard of it. I looked up the eligibility....30 years in service and a minimum retirement age of 57 years.
https://www.opm.gov/retirement-services/fers-information/eligibility/

Anonymous wrote:
Actually you have no idea what you are talking about. Two of the financial regulators match 5% to the TSP and 5% to their own 401k plans.

This. Actually, to make it even more complex, my agency matches the first 1% to the non-federal 401k, and then contributes 4% automatically on top. So if I contribute 5% to TSP and 1% to the 401k, then I receive an additional 10% contributed to my funds despite only contributing 6% myself. Of course, I'm contributing the max, so the real question then becomes which one do I contribute the rest of my maximum allowance to-- the TSP, or the 401k. Currently, I'm going with TSP.

Anonymous wrote:People on here are spouting ignorance/misinformation about tsp matching contributions. Agencies all follow THE SAME matching contribution rules. NO ONE is getting a 10% match from a federal employer.

Automatic agency contribution = 1%. This is not a "matching" contribution b/c you (the employee "EE") do not have to contribute a cent toget this.

Matching contributions = 1 for 1 ratio for the first 3% of your income that you contribute to tsp. Then it goes to a 1 for 2 ratio (or 50 cents on the dollar) for the next 2 % of your salary. So if you contribute 3% of your salary, you will get 3% of your base salary FREE from your employer. If you contribute 4% of your salary, your employer (ER) will contribute 3.5%. If EE contributes 5%, ER will contribute 4% as a matching contribution.

So the "10 % matching" referenced in a PP is not 10% from the employer, it is 5% contributed from the EE, plus 4% matching from the ER, and a 1% automatic contribution made by the ER. Total addition to the tsp program is 10%, but half is from the EE.

https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml

Actually you have no idea what you are talking about. Two of the financial regulators match 5% to the TSP and 5% to their own 401k plans.

Anonymous wrote:

Anonymous wrote:I just passed 750k. hoping to pass 1 mil next 3-4 years.

How many years in? I'm at 14 years and have $375k.

That's it? You are clearly not putting in anywhere near max

People on here are spouting ignorance/misinformation about tsp matching contributions. Agencies all follow THE SAME matching contribution rules. NO ONE is getting a 10% match from a federal employer.

Automatic agency contribution = 1%. This is not a "matching" contribution b/c you (the employee "EE") do not have to contribute a cent toget this.

Matching contributions = 1 for 1 ratio for the first 3% of your income that you contribute to tsp. Then it goes to a 1 for 2 ratio (or 50 cents on the dollar) for the next 2 % of your salary. So if you contribute 3% of your salary, you will get 3% of your base salary FREE from your employer. If you contribute 4% of your salary, your employer (ER) will contribute 3.5%. If EE contributes 5%, ER will contribute 4% as a matching contribution.

So the "10 % matching" referenced in a PP is not 10% from the employer, it is 5% contributed from the EE, plus 4% matching from the ER, and a 1% automatic contribution made by the ER. Total addition to the tsp program is 10%, but half is from the EE.

https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml

Anonymous wrote:To those with $300k and over in less than 20 years, what funds have you been investing in and what allocation? I'm at 13 years now and just under $200k...thought I was doing ok, but I guess not! I was not maxing out (close, but not all the way) but just went to the max this year...and allocated most of my contributions to the S fund from now on. Thoughts?

I am at 12 years with a little under 200k and feel good about it. I have nine
mine in the L2040 fund.

During this timeframe I also paid off my student loans, bought at the market peak and then lost money with that, paid daycares tuitions for two kids, started saving for their college, and saved an emergency fund. So, overall, I feel pretty good about things. We aren't wealthy, but we aren't struggling either.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't forget some people work at agencies with a 10% match and if you make over 180k that is another 18k right there annually.

which one matches 10%??

Probably an independent one. Mine matches 8%.

USPTO matches 5% (at least that's what I get). That's pretty sweet if you can get 8-10%.

Anonymous wrote:http://www.plan-your-federal-retirement.com/fers-supplement.html

also check out OPM website

thank you, that's good to know although it is somewhat limited in terms of applicability it seems -

I didn't start in the fed govt. until 31 so that I think would mean I could not take advantage of it at 57 if I'm reading correctly, and it also seems like it is significantly reduced if you have other earned income (e.g. you plan to "retire" but actually do something else a that point) and it is taxed.

Also, which agencies match 10% in TSP? I know it is not mine and I'm not leaving my job but DH is looking for a fed job and this would be good to know.

People hating on the G fund do not understand how incredible of a deal it is.

Always have some money in the G fund. It is free money, and you always take free money when offered. This is just like contributing to a 401(k) to at least the company match.

The G fund is great because it largely eliminates risk while keeping a solid return. Your commercially available bonds tend to break down in 2 ways; long duration with subsequently higher returns to compensate for the increased risk, or short duration with low returns. In other words, if you are holding a bond with a 30 year maturity you are going to want a greater return on your investment then a 1 year bond.

The G fund flips this on its head. It is a long term bond (generally 9-10 year maturity on average), however its price is recalculated either weekly or monthly.

In other words, the G fund is a short maturity bond with returns similar to a long one.

So, free money. Even with a high risk portfolio there is room for a G fund as it allows you to take extra risk elsewhere. In other words, if you feel comfortable running 80% of your portfolio in equities and 20% in bonds, holding G fund instead can let you shift that a bit to 80+X% equity, and 20-X% bonds, depending on your new risk profile.

Great minds...

@1959 here - sorry x-posed with 1956