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Why is Fed retirement SO bad?

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  • #16
    Originally posted by merlin436 View Post
    It would be interesting if someone would do a comprehensive comparison between the pay/benefit structures of most state/local and most federal LE jobs.

    I suspect the state/locals have it far better than what is usually accepted as fact.

    Border Patrol is likely the exception, as they largely tend to be posted along the southern border, mostly in RUS pay areas, and often in rural locations that typically compensate out at the bottom end of the state/local pay range.
    There are plenty of states with equal pay and better percentage. Texas state troopers are making 100 in the second half of their careers, and with 30 years I believe they are 100%. Conversely, cop pay in the southeast is infamously bad. For example, my hometown covers nearly a half million people, and starting pay is 34k a year. The assistant chief of the huge departments base pay is 55 + time in enhancements. All in a high cost of living area. State troopers there start at 36, no OT. Just really depends where you are as a state or local. Their big plus is free healthcare for employee.
    UNITED STATES BORDER PATROL
    "90 years of tradition unhindered by progress!"


    honor first

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    • #17
      I work for a large local SoCal PD. Our retirement formula is 3% accumulated for every year, vested by year 10, and eligible to collect at 55. Meaning, if I only did 10 years, I would still have a guaranteed 30K/year retirement (based on a 90K highest paid year). However, if I completed 30 years, I could accrue 90% of my highest paid. If I made Lieutenant, I’d get free healthcare for life. Not to mention our top step pay by year 5 is upwards to 120K without OT, and incentive pays. And this is simply our public safety retirement package. We have other retirement plans we can contribute to.... I.E., 401K and Deferred Comp.

      I roast my department in all other aspects. But when it comes to retirement, we got it right.

      Feds (especially the 1811 series) is all about status and prestige. Their retirement is egregious in comparrison to most local agencies.
      "The only easy day was yesterday"

      Comment


      • Mf821
        Mf821 commented
        Editing a comment
        Fed retirement is great compared to some though. I'm leaving my state agency for Fed due to this.

      • battlewagon
        battlewagon commented
        Editing a comment
        Yeah you can make 99 year one living in SoCal in Seal Beach or Huntington or any of those areas, but you also are commuting 1.5 hours a day or living in somewhere like LB, or spend more than half your salary (after CA taxes) to rent. And then you can afford to retire in the place youve worked for 25 years. I looked into leaving feds for Seal Beach specifically after speaking with them, but it didnt make financial sense in any way after I worked it all out.

      • IroqouisB
        IroqouisB commented
        Editing a comment
        I live in San Diego County. I own a home in a suburban area not in the hood, albeit a 3 bedroom condo, however I live 15 minutes away from work, and roughly 20-30 minutes away from 5 different beaches. My highest paid year so far is 115K. I live comfortably and stress free. I definitely don’t plan on living in this state ‘long term’. But I will definitely “conquistador” this agency and the housing market of this state before I punch out...

      • Rmodel1965
        Rmodel1965 commented
        Editing a comment
        I'm about 3 city blocks from the ocean on the east coast. You could buy a house down here for about 50k. I'm an hour away. from my current job. Finally got back home but I want to move closer to work because the commute wears on you. Or I just need to teach at fletc eventually. Then my drive will be about 10-15 mins

    • #18
      How much does the retirement situation change if you are a non-1811 role (FBI Intel Analyst, FBI Investigative Specialist, etc)? You won’t get LEAP but you’ll be able to work for longer because there is no mandatory retirement. Would the 1811 with mandatory retirement still end up being the better deal?

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      • Rmodel1965
        Rmodel1965 commented
        Editing a comment
        You could go 1811 then leave a 6c covered position and keep putting in years of federal service for a higher percentage

      • SHU
        SHU commented
        Editing a comment
        Non LE fed jobs retirement are really bad. 1% per year and you have to work around 30 years to get that.
        Last edited by SHU; 10-23-2018, 07:35 PM.

    • #19
      To say the federal retirement is “bad” is a broad-sweeping statement, and those tend to be inaccurate.

      Fed retirement has two componets: the FERS pension, and the TSP (similar to a 401k plan) with agency matching. The FERS pension alone would be a minuscule retirement, but coupled with adequate savings/matching in the TSP (especially if you’re able to max out your contributions early in your career) and a fed can retire quite comfortably.
      Last edited by Kimble; 10-15-2018, 10:37 AM.
      sigpic

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      • #20
        Originally posted by Jwebb514 View Post
        How much does the retirement situation change if you are a non-1811 role (FBI Intel Analyst, FBI Investigative Specialist, etc)? You won’t get LEAP but you’ll be able to work for longer because there is no mandatory retirement. Would the 1811 with mandatory retirement still end up being the better deal?
        I've done the math for myself and the difference is drastic. To use a round number of $100k for the high three salary to compare 6c versus regular retirement.

        With 6c, I can retire at age 50 with 24yrs of LE service + 5yrs military time I bought back. Me retirement benefit would be $45800/yr.

        With regular retirement, my minimum retirement age is 57, meaning I have to work an additional 7yrs just to retire with the minimum. Factoring in my 5yrs of military, my retirement benefit would be $36000/yr.

        To make the 6c $45800 equivalent retirement benefit based on those numbers, you would have to work an extra 22yrs of regular retirement by my math. I'll take 6c to work 7yrs less and make almost $10k more.

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        • merlin436
          merlin436 commented
          Editing a comment
          I might be wrong, but can't you retire at 45 with 20 years of 12D coverage plus the 5 years of military time you bought back? That there gives you 25 years in total.

      • #21
        "I might be wrong, but can't you retire at 45 with 20 years of 12D coverage plus the 5 years of military time you bought back? That there gives you 25 years in total."

        You mean 6c? No idea what 12D is. 6c retirement is 20yrs of service at least age 50yo OR 25yrs of service at any age. Military time does NOT count toward 6c time.

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        • Exbpa340
          Exbpa340 commented
          Editing a comment
          20 years of covered time @ age 50 or 25 years of covered time at any age. Military/non covered time does not satisfy the 20/25 requirement.

        • merlin436
          merlin436 commented
          Editing a comment
          You can work 20 years in a covered position, transfer into a non-covered position for 5 years and retire with the same benefits as a person who works 25 covered years.

          "After accumulating 20 years of law enforcement and/or firefighter service, an employee can move to a regular position and still receive the special retirement computation."

          https://ask.fedweek.com/federal-reti...t-eligibility/

          I just don't know if military buy-back time functions the same as a standard non-covered position would.

        • merlin436
          merlin436 commented
          Editing a comment
          https://www.opm.gov/retirement-servi...dbook/c046.pdf

          Page 23...it looks like military time will not help meet the minimal number of years requirement.

        • wildstar82
          wildstar82 commented
          Editing a comment
          Merlin, you can work 20yrs in 6c and transfer to another non-6c gig, but you cant retire until you hit 50yo, as I said above. You can work as many years as you want in a non-6c gig after you are done with your 6c 20yrs. Military time does not count toward those computations, but gets tacked on to the end of it all to increase your final number.

      • #22
        As an 1811 with 25 years ur high 3 will be approx 150k. Social security supplement is 15-18k which is tacked on to pension. So pension alone approx 75k with 25 years as 1811.

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        • #23
          I am putting 10% right now into my TSP, which is actually pretty good... as I get more cash I plan to knock it up a bit each time.
          Former Police Officer (Injured LOD)
          USAF VETERAN 2004-2012
          "The sheep pretend the wolf will never come, but the sheepdog lives for that day."-LTC Grossman
          Emergency Services Dispatcher, APG MD

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          • #24
            Doesn't sound too bad as long as you contribute to TSP. I work for a county sheriff in the Bay Area, CA.

            I can receive 90% of my salary(current top step salary is a little over 110k a year) at age 57,
            with deferred compensation(similar to TSP without matching contributions).
            I also get affordable lifetime medical, dental, and vision.

            I wish it was still age 50 for local LE, but I guess the state thought that was too young..

            Comment


            • #25
              Originally posted by Ratatatat View Post
              1. 1811 TSP millionaire stories are mostly fiction. Yes, there are a few who've made it to that level, thanks to an abnormally nice ten year bull run. But markets don't always go up, and as seen in the 1,300 drop in the Dow this week, aren't as reliable as a grandmother's love. A friend of mine who retired in 2006 had 340K in his account when he walked away; not because he wasn't diligent in contributing, but because the market for that decade was mostly a straight line (before falling off the cliff in 2008). This party won't last forever and don't assume the market will be your friend anymore than a roll of dice at a craps table is your friend.

              2. Who gets hired as an 1811 before age 25? Very few, that's who. The vast majority have to go to at least 50. I only know of a couple of people who retired younger than 48 and I have yet to see anyone retire at 45 or younger, btw.

              3. People will buy a house during their career and need funds for the down payment. Say you were newly married in 2002 and bought a 1,200 square foot starter house for you and your wife and dipped into your TSP for 20K because you need 10% for a down payment. By 2011, you have three kids and an unhappy wife, which is completely understandable given the size of your house. You put your house for sale on a still-depressed housing market and after dropping the price three times, you finally get an offer for about what you paid for it. At least you don't have to come up with money to complete the sale, but bah bye to that 20K down payment and bah bye to the 40K you put into a new roof, new driveway, new heater, new garage doors, new carpeting. And guess what? In order to purchase that 5bd/3ba Mcmansion your wife is gaga about, you have to tap into your TSP again to come up with the 10% down payment. This may seem farfetched but I can attest as reality for how life situations often occur. Those TSP hits really impact things in the long run but you do what you have to when it comes to a happy wife, right??

              4. $100K+ private sector jobs waiting for you when you turn 50: Here's the deal with this: I know many people who have retired in the last ten years. I would guess around 50. Of that number, only a handful turned in their gear and started the next week in a six figure gig. The rest? Well, I don't keep tabs on all of them but the ones I do work part time or full time at a Costco... at a gun range... at a dispatch center. Frankly, most of them are just chilling out, playing golf, playing with their grandkids, and spending lots of time sitting around not thinking about work anymore.

              What did the handful that pulled off the lucrative gigs have going for them? One of two things: either they were upper management, or they had a unique and valuable skillset. Most importantly, they had developed a large network of professional associations who were tuned into their value and helped them segue into another career.

              Another point on this: those $100K retirement jobs aren't exactly strolls in the park, btw. In fact, often times can be more stress and toil than previous careers.

              My bigger point is this: the cookie doesn't crumble the same for everyone. Some people lived charmed lives; they make money off every real estate deal, marry a cancer surgeon, and retire to Sanibel Island by 48. For most, that's not reality.

              What is the median reality? Retire in early to mid 50s, annuity and social security averages about $70K, with plus or minus $500K in TSP. If only 2% ($10K) is taken out of the TSP annually and it makes 2%, that's the legacy which gets passed on after you pass on....
              That is pretty much my experience, too. Great post!

              Comment


              • #26
                Yes, the Pension doesn't compare to many state agencies, especially in my area. The pension all depends on how long you worked and what your grade was when you left. Like the advice already given, your key is to pump as much money into your TSP as possible. Also set yourself up with other 401ks. Doesn't have to be as much as your TSP, but a small amount over time will go a long way. Don't retire in the northeast also.

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                • #27
                  Just remember that a municipal pension is a promise to pay you tomorrow what they can’t pay today.

                  And many municipalities are biting off way way more than they can chew with their pensions.

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                  • #28
                    I hear the word diversify a lot among financial planners. It is good advice.

                    Comment


                    • #29
                      Fed retirement is good IF you live in a low cost area for all or most of your career and you save and invest a lot of money. But if you live in an expensive city, and there is little to no mobility in your agency, and the wife stays home to raise the kids, you will be broke. I drive a 13 year old car. No flash whatsoever in my families life so all that talk about living beyond your means is complete BS. In good times, I put around 700 dollars every two weeks into my TSP but that is based on wall street hustlers and the stock market (my retirement) appears primed for a massive crap. A vacation for me is driving up the 5 to Disneyland for the day. And we have not did that in 2 years or more. So yes Fed retirement sucks if you live in NYC or SoCal. But in Texas, North Carolina or Oklahoma, etc.. you are probably living good and saving a ton of cash if your smart. So I'd say a Fed retirement there probably is decent. I know the feds pay much better than the locals in smaller cheaper areas of the country. But that is not the case in the cities where I have spent my career working in federal LE.

                      But I'm too far in to start over, so when I retire in the next 6ish years, I will be either going to some community college to get some training to be a MRI tech or something like that. Or I'll be going to work at Costco. I figure I'll be able to grind my new gig out until the kids get out of college and I'm in my early to mid 60s. If I'm lucky.

                      So if your thinking about working for the feds, think long and hard about it and where you will most likely be stationed. If its big cities, and you want a family, things will be difficult financially. Also note Congress is constantly looking to cut our retirement. Since Obama came in we've rarely got any raises. When we have they have been like 1.9% or 2.1 %. Many years (and this coming year) we have gotten 0%. Democrats and republicans could care less about us and the medical costs go up every year. Just 3 years ago my FLSA pay was eliminated by congress and I took a MAJOR pay cut. But I still work a 5/10 50+ hour week but I only get paid straight time for all 50. After 50 hours I receive no additional pay. If I make a felony arrest and work a 17 hour shift, I still have to come back to work a few hours later and do my 10 hour shift. But instead of pay, they now give me comp time, but comp time doesn't buy my kids new shoes or buy a set of tires.

                      So if your considering the feds, think long and hard about it. If the job is in a low cost area of the country then it might not be a bad choice. But if your working in high cost areas, or in agencies with little to no mobility, walk away from it.
                      Last edited by SHU; 10-23-2018, 04:34 PM. Reason: My tapeworm told me too.

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                      • Keyturner
                        Keyturner commented
                        Editing a comment
                        Well yeah, if you're living in those high cost areas on a single income, that's going to be an issue.

                      • SHU
                        SHU commented
                        Editing a comment
                        Even on a double income its an issue. Just more so on a single.

                      • Exbpa340
                        Exbpa340 commented
                        Editing a comment
                        I too live in CA (Norcal) and live pretty well. I am currently 5 out from being eligible and should pull down about 120k this year. My wife works for a local school district and adds about 50k to the pot. We have a decent house in an outstanding neighborhood and drive 7 year old cars (no payments). At 50 my pension and the Supplemental will give me about 70k a year in retirement. When you throw in TSP could easily be well into the 80-85k range. Not too bad but I will definitely be popping smoke from this POS state.

                        All depends on getting the right covered position. If you have a non-covered position and/or top out in the GS/GL 8 or 9 range without premium pay then yeah FERS sucks.

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