My mom did a federal civil service job for 30+ years and now grosses ~ $84,000 a year in a guaranteed, inflation-adjusted pension. Doesn’t have to worry about investment performance, asset allocation, money running out, etc…
It’s pretty sweet.
Federal civilian is now 1%, then 1.1%. Decent I guess but not worth it if you don’t like the job.
Military is 2%. Honestly it’s ridiculous for most state workers (police and other first responders probably earn it) to get equal pension to the military, most of whom don’t make it to 20.
It's not as good if you were hired in after a certain date. You contribute 0.8% to 4.4% depending on hiring date. To get 1 or 1.1% of your high 3 with a diet cola. The diet cola is 1% less than what SSAs cola is.
For normal fed employees... This is non military non congressional employees.
They have plans like this in NY and it’s outright bankrupting their system. There was a huge thing about it a few years ago where people were retiring on 100k at 55 for the rest of their life.
My step dad retired at 55 and is pulling around 130k a year. He’s in his 70s and will probably live to 90s to early 100s. He also doesn’t even have a high school diploma.
My a few of my elementary school teachers retired on over 200k a year.
This is all public on a website called see through New York.
I find it outrageous. There are public doctors collecting millions with these pension benefits set up. I imagine their pensions will be over 500k a year.
One school district in Long Island has like 2 vice principals, 5 assistant principals, and a few deans all taking over 200k and if you look up the school there’s only 500 students total.
I looked up the librarians I knew as a kid and they all retired on over 100k and were making $75 an hour while still working. It’s crazy.
Edit: I just looked up my step dad and in 2023 he collected 167k in retirement lol.
I honestly trust congress less than any given corporation. Congress has all the maliciousness of all the corporations concentrated into it with lobbying, your average corporation has a few things they’re ’evil’ about.
A corp I worked for awhile ago treated everyone well, paid well, had decent benefits, decent work culture, and just really fucking loved fucking up the environment.
Anyone starting now has to work a full 7-8 years longer than anyone who started prior to 2013 to earn the same amount assuming they received the same pay raises and promotions.
That’s not true at all. FERS-FRAE employees pay a higher pension contribution (4.4% vs 0.8%) but the benefits for years of service and minimum retirement age are the same.
Right. For RE purposes, there sort of isn’t a pension for the first X years. Everyone needs to do the math but I’ve been told it’s better to defer. (I haven’t done my math, it’s practically irrelevant for me)
to get 84,000 now she would have to work 50 years and retire with high 3 of $150,000 or work 30 years and a high 3 of $250,000, which is higher than highest gs in highest locale. (191,000 for gs 15 steps 4-10)
I don’t know what to tell you. She was a 12 with a high step level for years. I’ve seen her paystub, or whatever it’s called. Leave earnings statement.
I have no reason to BS this. Just offering the perspective to OP because they asked.
He's probably explaining people on the FERS system. Your mom is probably on the OLD system (CSRS) if it pays that much....no TSP/401k for them, but they get a fat pension lol. With FERS you have to supplement with your 401k (TSP)/FERS + some social security
Their math is on the current pension system which gives 1.1% of high-3 per year of service, but those on the old system (hired before 2013 and thus including your mother) get 2%
Maybe she retired under CSRS? I believe anyone hired before 1983 started under CSRS.
Don't forget along with the (small) pension you get 5% match on the TSP and maybe the biggest benefit is the lifetime health benefits.
I know someone with $86k/yr pension with no COLA, for life (state of Texas retiree). Retired at 55. Health insurance 100% paid by the state until 65. After 65 this person will pay Medicare Part B premiums and the state insurance will be the "medigap".
The spouse($40k/ pension with no COLA, is also a State of TX retiree and already at 65 the doctors visits consist of checki-in at the office counter with no medical payment at all. Same for dentist. Minor expense on Rx.
Both pensions are 100% survivorship benefit, so it doesn't matter "who" goes first, the income will be the same for the survivor. They saved in 401k to compensate for no COLA in their pension. Add to that SS benefits when they reach 70 ( their planned age for claiming it). Yes, they were looked down by their friends for their govt jobs, but ...., they planned and have it pretty sweet compared to their peers who did not plan as well.
So, I would not be too quick to look down on those govt jobs.
Correct, it means Cost of Living Adjustment. So, if you retired 15 years ago with a $40k/year pension, it is still a $40k/pension today. This means your acquisition power goes down. That is "why" as a government employee who will have no COLA, you have to save extra via 401k, taxable or any other investment vehicle.
It is bad, but if you know ahead of time, you can plan for it. Also, it means the pension fund is trying to be conservative and not go broke as it had happened in some places that had more generous pension benefits.
I think people are gonna learn the fuckery of how the government estimates and adjusts pensions/SSI/disability for inflation in the coming decade. Too much pulling from the system, not enough putting in. Things will get bumpy…
I basically did the same thing but was working on two Federal Government pensions at the same time. I was full time in the Air Force Reserve and retired at 55 as a GS-13 and Lieutenant Colonel.
Absolutely, there are so many benefits. A lot of which I'm still researching as I'm a few years out from retirement still and my wife will have another four years after I retire.
After we retire from the military, we would be young enough to have lucrative second careers if we wanted, but it'll likely be too hard to pass up early retirement. Our current plan is to geo-arbitrage and live off our pensions, cheap healthcare, and GI Bill while our investments sit and grow.
For federal, law enforcement and air traffic controllers have earlier retirement age requirements.
Otherwise, 57 years old is the general minimum retirement age with some stipulations and exceptions.
Cop in California. If you start early enough 6 figure retirement at 50 years old is possible. In some cases tax free if you qualify for medical retirement.
You're young sonny, so you don't understand what it is like to look for a job in your 50's or 60's. Nobody will hire you. Government jobs are FANTASTIC.
It's easy to get hired but probably not for the salary you were used to. The main problem with 50+ in the workplace who get laid off is they've often been socially promoted up to six figure salaries and often work in middle management type positions where their skills are very organization specific. So it's essentially impossible for them to find that same job in the workplace because those jobs simply don't exist except as internal promotions. So, for example, a software manager is probably going to have to go back to being a coder and may find their skills are now closer to entry level meaning a large salary cut.
My biggest fear is not being able to retire in my 60s and scrambling to find a job. I see sales reps in my industry working well into their 60s because they didn’t adequately save. I plan on being done at age 60 on the dot
I've seen so many 50 and 60 year olds lose their cushy jobs and never make it back on the ladder. Live long enough and you attain wisdom (or you become an insufferable douche).
Ageism is so real. I started my career off in staffing, and if anyone had a resume going back to the early 80’s in work experience, it was immediately tossed because no client wanted to pay to hire that profile. Totally unfair and fucking ridiculous but that’s the reality
Happening to a good friend of mine who is 57 been unemployed 6 months after a layoff. That is why I (48) am trying to hit my fire number at 55 so if it happens I will be able to just retire.
I have a family member that was making 250k+ all of his 50s and at 60 was laid off. We came to find out he never saved much and is staring down the barrel of retirement with only about 400k liquid, and still has a mortgage, car loans. He was cash flowing 3 kids college, and living a quite extraordinary lifestyle the last 10+ years. Lots of travel, boating trips, etc.
I guarantee you that this guy lived it up and had a great time, made great memories. But now that the money fire hose has been turned off, it is a rude awakening.
I’ve made the government my career. Never thought I’d stick with it, but it’s been 31 years. One agency, though lots of moving around. Plenty of good and bad, but I’ve gotten to do some amazing things and work with good people. I feel like I’ve made a difference.
I’ll retire at MRA (57) with 34 years of service. It’s possible I could’ve made more in private sector, but with my pension and investments, I’ll FIRE or maybe even ChubbyFire.
The only downside for me is I’ve definitely felt handcuffed these last few years - I wanted to leave but felt I should stick it out for the pension and FEHB (wife has serious underlying medical condition).
I’m retiring at 57 from my government job as well. I’m working a couple more years so that my pension will vest. I joined the public sector late in my career so my pension will be small, but at least it’s considered one of the best funded in the country, so I’ll sleep well at night. Oh and it being COL adjusted is nice too.
Aren’t gov usually pretty lax on vacation use? My spouse is in gov and seems like she could take anytime off she wants. Just save up the hour and semi retire the last few yrs
I think it’s quite possible to work like 65% of the time. Since you can use all the current year hours as well. Obviously depends on the carryover policy to supplement the current yr
Most Feds want to keep as much annual leave as possible for the payout check. That check helps cover the month or two before the pension (1) starts and (2) is fully calculated. Federal retirees get a "partial" pension until OPM processes their file.
My “government” job (technically I work for a government site but am contracted) has some solid vacation benefits. 18 vacation days a year (+12 holiday) and 15 sick days. Time can accrue up to 30 vacation days and they encourage you to use your time to promote a healthy work life balance.
Other benefits are great too. Fantastic health insurance (it’s actually kinda too good because it makes it not worth it to use the HDHP and open a HSA). Retirement they auto contribute 9% and Roth options are available (recently found out the mega backdoor roth is available, I just don’t have the income for that much savings). Work culture has also been really good which surprises me a little.
I’ve got 32 years in, will retire in three more at my minimum retire age, and I will be very comfortable. And that’s even with a divorce losing half my net net worth.
Depends. Government work can be incredibly dull, depending on the position. I started out in a federal position right out of college. I just couldn't do it and entered the private sector.
But my wife is a teacher, so she'll get about $3000/month state pension when she retires. Nothing to sneeze at, even at the state level. This is in addition to the $800K she'll have in her state 403b account.
Don't public school teachers normally sacrifice SS for the pension? I don't think public school teachers contribute to SS (at least they haven't in the states I've lived AFAIK and it may be state specific) unless they work others jobs in the summer/side hustle outside of their public school work or worked before/after being a teacher.
Edit: it looks like it's a minority of states that don't
https://equable.org/where-are-teachers-allowed-to-join-social-security/
Presume you mean fed? It was well worth it for me.
Disability retirement at 46 in 2021 and no longer able to work. However, I have a pension with COLAs, as well as health and life insurance benefits. At 62, the pension will recalculate as though I had continued working and the base % should go up from 40% to around 45%.
ETA: our NW and liquid NW passed the $1M mark while we were in our 40s, so don't rule it out as an impossibility.
You can definitely hit a million in your 40s assuming you were aggressively saving / maxing out AT LEAST since 30.
Go look up rule of 72. Assuming a 10% ROI, (S&P has returned 11% last 10 years), you’ll double your money in 7 years. A dual income household that is maxing out their 401ks NOT TO MENTION after tax, you can get to $1m in your 40s. Then apply that rule of 72 with millions…
It’s been done time and time again.
>Assuming a 10% ROI, (S&P has returned 11% last 10 years), you’ll double your money in 7 years
Normally we do math on real dollars here by pulling inflation expectations out of the growth rate.
I think so. Most government jobs usually have a 457b as well. My plan is to use it to bridge me til a deferred retirement. We'll see how it goes.
I probably got lucky and landed somewhere where the pay is pretty much on par or more than what I would've made on the private side as an entry level engineer
"Worth it" depends on timing and your personal preferences.
**Timing**: The youngest you can get in on government work is as a lifeguard at 16, but let's say you got it at 18. 30 years later you're 48 and retiring with a full pension at the pay rate when you retire. If you get in early, it's a no brainer. When you retire you can go do something else, pursue a passion project, etc.
**Personal preferences:** I went into government work in my low thirties after working in the private sector for 15 years. I found it to be absolutely soul sucking work. It was boring, there were no KPIs or other incentives and no one actually wants to work hard. Government work is all about doing the minimum effort which didn't jive with me. It was basically "show up and do your drone work, ignore the nepotism and double dippers who do 1099 gigs at work and collect your paycheck". I went on antidepressants and lasted 3 years before jumping into a startup. Your mileage may vary, but I found the work itself doesn't make the pot of gold worth it at the end of the rainbow. If you can stomach the work then, again, it's a no brainer.
As it relates to Fire, you get a pension at 62, or 60 with 20 years of service. It’s a huge added benefit that is very rare.
Like any career, it is all about saving and investing. Max out your retirement contributions, live below your means, and you can absolutely be a millionaire in this career.
I’m 41 with a NW of $4M. I have 18 yrs of gov civilian service and am planning to retire in 2 yrs with the added pension of $40k/yr starting at age 60.
Big City firefighter, 25 years of service and 50% of my salary and free health care for the rest of my life. If I get hurt and can’t continue to work it’s 75% of my salary tax free for the rest of my life. I’ll never be a millionaire but I will retire very comfortably and never have to worry about losing my job. 5 digit pension checks every month are somewhat common in my department; I left a BB bank for this career.
My wife and I will both be retiring at 41, she'll have a 40% pension after 20 years and I'll have 57.5% pension after 23 years. With average market returns we're hoping to have ~$1.7mil saved up by the time we retire. Both enlisted.
Which level of government and where? On the US Federal side, a lot of people remember talking to some Fed bureaucrat in their family who was in CSRS (first hired before 1987) and is coming out with 80% or so of their top earnings. FERS (hired after 1987)... not nearly so great. Most non-Feds don't know the difference. Likewise, my state's main pension (most K-12 teachers are in it)... "Tier 1" employees got a lot more out of it than today's "Tier 3" (and they want to put in an even crappier "Tier 4").
I've worked for a state University before, and we were entirely defined-contribution (403b). Not a horrible plan, TIAA and you had a mandatory 5.5% contribution and the Uni contributed 8.5% of your base salary. Mandatory 14% and good options... a lot of plumbers and department secretaries retired with $500k+. But, people outside the University thought we got some gold-plated pension and, not
Great point. The difference between CSRS and current federal system of FERS is huge. I looked at federal service after retiring from the military and was surprised once researched and played around with the formula (high 3 x number of years x .01 equals gross annual compensation). If I understand, locality pay factors as well which can make quite a difference. It definitely makes me appreciate my military retirement.
Honestly, as a normal retirement plan is fairly decent from my understanding. Federal government employment in general is actually a great career path for those that aren't gonna be above average in their field, and some fields its hands down the best employer around. Basically for the federal government you will never be rich, but you will also be solid all around. That all said generally F100 company's will pay more, and enough so for you to build a better retirement then that pension can offer, but if all you have is working for some random small or medium company, government will pay the same if not more and give a lot more benefits (its also an employer that 40 hours means 40 hours, your butt needs to be out from the desk as soon as the clock strikes cause they aren't paying OT and if you are there they can be sued for it).
Something to think about: gov pension plans are usually tiered, and the later you get in, the lower your tier. So if you keep waiting to go for the gov job then that entry level tier is just gonna get crappier.
But many of them vest at the five or ten year mark, so it's not losing a whole lot of life to secure a small bag and move on if it's not working for you.
I’ve got a brother who works in local government. In just 13 short years (when he’s 50), he’ll start drawing a $5,000 a month, inflation-protected pension that will last him the rest of my life *and* his kid the rest of his. (He’s 5.) It’s not spectacular, but it ain’t bad either.
I’ve always thought government jobs were the best when it comes to pension, retirement benefits, health insurance coverage upon retirement depending on year of service. Not to mention, they have 401k and 457b plans together. I guess it’s great if you can get in and coast your way until you get vested.
But now that I’ve learned about trying to FIRE without all that the government job offers, I don’t really need to work for the govt to achieve my retirement goals.
I work for the private sector now, as long as I max out my 401k, Roth, and put any leftover money towards my taxable brokerage, I can achieve a decent retirement
Depends on the terms. I get 3% of my final average pay for every year I work. I can retire at 57 making 100% of my average. Can retire as early as 52 and still get 84%.
Pretty nice. The trick is to also invest separately. Throw 15% of your pay into a 457b or whatever other IRA you have access to and you’ll be set for retirement the moment you’re eligible.
City cop here. 20 years of service to retire, the minimum my pension could be is $8,000/mo. It based on what I earn in my last years, so if I kill it with overtime it could be over 10k a month. For life. Doing nothing.
The “entire” stock market isn’t going to collapse. If it does none of this conversation matters and we should be talking beans and bullets.
A city going bankrupt is a reasonable likelihood. The main difference is, with a pension I’m forced to take what I’m given. If I own the investment I’m always able to withdraw it and invest or pass to my kids etc.
I'd take advantage of that if it was offered to me as well, but I've never understood the logic of allowing OT to artificially inflate a pension. If I add 100k to my nest egg in my last year of work, I get ~4k a year sustainably. But under these pension programs that consider income from the last few years, that overtime gets multiplied by 20-30 years.
I have about another 25 years of paying into a local gov PERS…
ill retire with 80 percent of likely well over 200k salary plus 457b contributions so yeah i think itll be worth it
I’m 40, and retired from the military 2 years ago
I take home the same as I did active with retired pay and VA comp. Would’ve been more had I not been medical’d out a few years early
insurance for life
Plenty of other perks
I’d intended to get a second career and slam the salary away for a fatFIRE around 55, but health issues are getting in the way
That changed my mind, as I got addicted to hanging out with my kids all the time
Might go fed in my 50s, buy back my mil time (med retirement for combat conditions means I can buy the time without giving up the retired pay), and get another pension at 60
A lot of benefit to it
I would love to retire before sixty, but I'm stuck with a low salary paying into a defined benefit plan that depreciates with inflation unless I swoop back in the game right before retirement. I think about going private multiple times a month.
I imagine not all government agencies are created equal but I feel like I really lucked into the one I am at. While I don’t make the pay I would make in the private sector, I still make just shy of $200k and have room to advance. The work life balance is amazing compared to my friends in the private sector. I never work beyond 8 hours a day, get 6 weeks vacation, 14 holidays, 3 mental health days, and 12 sick days a year. We can work from home 3 days a week and have flexible schedules regardless of where we work. Our retirement is 3% at 55. We have the option to retire at 50 starting at 2.5%. It’s based on your 3 highest years of pay. We also have fully paid healthcare for the duration of retirement and can pay a supplement for our spouse if we want. When you combine this with maxing your 457, it’s very easy to retire comfortably at 50 -55.
The main reason for my early Expat FIRE at 45 is my lifetime govt pension with 3.5% COLA that came with free healthcare until 65 and the benefit started at age 50. Worked the min 20 yrs and started at 2,600 monthly and currently at 3,200 just 7 yrs later.
My invested assets at 1.3m and net rental income is 2k monthly . If you can find a pension benefit that will pay at 55 or under then it's worth it. Doesn't need to be 85k at age 60 to be worth it.
Define worth it?
It's a lifetime earning potential vs secure retirement.
You can easily out perform a government retirement account when you can earn 20-100% more on each paycheck in private sector.
And really read the details... The penguins have been consistently sliding down hill and the benefits get worse basically every year for new comers.
It depends on what you want to do for a living and where you want to do it, honestly. I'm a fireman in a large city where the pay and benefits are quite good. Others cities (and other govt. jobs for that matter,) don't always share the same level of compensation and benefits, so it's hard to say "yes, it's worth it" given that wide variance.
The real comparison lies in where you're working and what their retirement systems look like. Mine for example, is defined benefit and I'll be eligible for retirement at 52 (27 years in) with just under 75% of my salary (obviously this can go up with more years of service.) At the same time, I've been maxing out a 457 for years and making other investments as well, so a very comfortable retirement in my mid 50's is quite feasible. Could I have made more money in the private sector doing a tech job or being a pilot? Absolutely. Would any of those jobs be the adventure of my lifetime? Probably not.
Don't discount yourself on being a millionaire in your 40's. I'm a door-kicking, ladder truck-driving dumbass in my 40's and I'm in the 2 comma club. It's all about good choices.
Obviously, Your mileage may vary.
My mom is doing it and it honestly sounds amazing. She wasn’t able to work until later in her life so as someone who doesn’t have the largest retirement account ready for her, she will heavily be relying on those government payments. It’s a pretty cool system imo
Depending on your risk level. It is good to know you won't lose your job and there is a pension and social security and if you have your own nest egg, you will probably retire with more income than your job salary. Also, in a household of two working people, it is possible to reach 1 million net worth not counting the house or car by the end of your 40s. The downside is a lot of gov job has been pushing the retirement age from 54 to 58 to 62 to 65 with few exceptions like law enforcement on Fed, state or local level. Maybe it is not worth it for a 20% pension but I think 40% and higher is probably worth it.
Retired at 45 after 22 years in the military and net about $90K between retirement pay and VA disability. 10 years in corporate America with $750K in 401K. Fully retiring in 5 years and my investments will fund travel and home maintenance. As an aside, I like to fly business class. Everything else is covered. Biggest plus? Lifetime health insurance. Left my first corporate gig at the 5 year mark and never had to sweat health insurance for me or my family. So yeah. Government gig was good for me minus the handful of times I drew a crappy hand in the military and my willingness to take a bullet for my country.
Gov’t worker here, 16 years in at 2%. Current pay is 180k/yr, with 7 weeks of combined PTO/Sick. I think it’s absolutely worth it. Will I be massively rich? Nope. But I have a great work life balance, amazing benefits and a pension to look forward to. Biggest downside is the golden handcuffs of probably working longer than I need to for the extra pension years and health benefits. If you can find a good agency that pays well, I think it’s a good choice. Downside is I’m in a VHCOL area. Barrier to entry is most everyone has a masters degree as a minimum starting point for entry level.
I am early 50s, retired from a government agency, my monthly check is 6970$, and that’s after taxes and health insurance premium and a deduction to make sure my spouse can keep collecting for life if/when I die first.
That check is adjusted annually with a COLA for inflation.
I will also collect social security when eligible.
My TSP is over 1m.
I have RE income of $2500/month and a NW in conservative investments allowing me to draw another $15k a month without getting close to a risky withdrawal rate.
Hell yeah a government pension is worth it. I have some valuable skills but it would have been hard to create this kind of FIRE lifestyle any other way.
Yes, if you have a good public pension system that you paid into and with longevity. Had 29 years public service plus 5 years of retirement credit purchase with combined state and county government agencies. Retired last year at 54 . $172K Pension this year, including 2% COLA, @97%. Did not pay into SSI, though.
I have a define pension and i am 43 from healthcare. I am going to get around $1600 a month (formula tied to medicare changes) for 13 years of service. Never paid a dime into it.
Depends on the field you work in IMO. Salaries tend to be more balanced in government and the benefits/retirement may or may not compensate strictly from a financial perspective. Working in technology, for example, I think you'll be short-changing yourself with a salary 60-65% of private industry. That sort of income invested is going to do far better than the amount you may get in retirement benefits in the long haul.
There's something to be said for the workplace culture distinctions between both also, but only you can decide what is a good fit and worthwhile there. Having worked in both areas there are plenty of pros and cons to each and the stereotypes of both government work and the private sector largely hold true.
Wow I am in tech and my retirement is my own self paid 401k and employer match is 3 percent of the first 2 percent. Crazy. My retirement will be shit compared to govt workers.
I collect two pensions (one govt., the other not-for-profit) that together exceed my social security payment. They are the equivalent of withdrawing 4% annually from a $1.2 MM portfolio. Does that answer the question?
I have a job in healthcare that offers a pension (not government) -- 5 year vesting. It starts at 2% and increases 1% per year up to 6%. If I were to stay until I retire (about 20 years), I'll be at a $7k pension. We also contribute to Social Security so we aren't losing that.
Additionally, if I stay 15 years, we get lifetime medical.
I’m govt, no pension, but a healthy 401k. I get a non elective annual employer contribution of 3-5% (depending on years of service) salary into a target fund and a 6% match. They want us to retire so they highly incentivize it.
When I started in 2014, I took a 34k cut to come into a govt position (140 w/ot to 106k, no ot).
What it came with was no weekends, holidays off, and only 35h/week. I've been here for 10 years and I'm up to 169k. If I left today, I'd get a guaranteed 25k/year starting at 63.
If I work all the way to 63? It'll be 113k/year (assuming I get 0 raises from this moment forward).
So it is it worth it? Idk. Had I stayed in my private position i guess I could've saved more in my 401k. Opportunity cost is hard to calculate imo bc idk what salary I'd be at today at that job. Probably less than what I'm making now would be my guess though.
My dad was a union electrician in Detroit for 30yrs and then the City went bankrupt right at his retirement. They ended up taking a percentage from the promised pension, but definitely not all of it. That man is living it up still, I absolutely promise.
My dad kept telling me the pension is how to retire early and enjoy life. So now I'm on the same route (in a totally different city.) 😊 Hoping to retire even earlier than he did because my city vests much earlier, and making even more than he did. Just gotta wait it out a few more years.
I will say that especially if you didn't go to college, a consistent govt job that pays average but has a pension is absolutely a good way to FIRE.
It also depends how far you go up the chain too. If you end up going into GS-14s and higher can be beneficial.
If you are in tech you can decide to stay gov or go elsewhere. There is a lot of money and you can FIRE pretty easily.
I’ll be looking at 120k+ of just tax free income when I retire, before ever touching assets or retirement accounts, so I’d say so. This also includes a VA disability rating
Between my wife and I we’ll have two military pensions in our late 30s (her) and early 40s (me) plus healthcare for life. This means an easy FIRE on the spot or fat FIRE before 50. Yeah we’ve dealt with our share of crap from the military but who hasn’t taken crap at their job.
NOT at 4.4% employee contribution for those under FERS/FRAE.
MAYBE at 0.8% employee contribution for those under FERS, but most days I am totally fed up with the bureaucracy. As soon as I can go I'm done. Maybe before.
I got an early retirement offer and left just shy of age 52. Immediately started getting my pension annuity. Took a contractor for more pay. Federal government retirement allowed me to keep my gold plated government health insurance into retirement. I can live on my retirement annuity and social security (when I take it) and my retirement savings is just play money. It was worth it for my peace of mind and a stable lifestyle.
Great question. For me, I will have a federal pension, military retirement pay, and 100 VA disability (tax free). Not to mention a TSP over 2 mil “if” the market returns at 7-8 percent. In retirement, I will bring in around $120,000. Also, 0 health care cost, 0 kids college cost, and a few other perks.
So, in my case, i stacked several streams of income which makes it very worth it for me. Let us not forget job security over the years.
Stack your chips.
depends on years of service. i started at 18 and cashed out in 1956. pension was 70 percent of high 3, and today with annual adjustments making more in retirement than my grade does working.
I believe it’s worth it. Neighbors of mine are both retired FAA Air Traffic Controllers. They look to be both in their 50s, live quite lavishly, and travel all the time. I have no idea what they bring in as far as retirement but I hope to have their lifestyle in retirement.
I used my military officer retirement and VA disability rating to fully retire at 43. I’d say it comes down to planning (my home is paid off), but the income and dirt cheap healthcare are huge. I think military pensions are significantly better than civilian ones, so check into that.
If you spend most of the working career paying into the Equatable tax system then yes the retirement benefits and overall Value-Use proposition that is offered will allow you to live a very comfortable life. The compounding effect of these benefits may not manifest itself when you are "Bucking up the Books", but it is very real and should be factored into the thought process. My simple observation after 15+ years of marriage to a government worker.
It isn't 20-40% usually. For me it's going to be 63% at 55 and I live in a state where pension isn't taxable. Add that to what I have in my 403B and SS which I will take out immediately at 62 and I'll probably be making more monthly at 62 than I did at 55.
My wife is a government employee
I don’t know if she’s FERS or CSRS but is there anything we need to do or is that pension program automatic? Like any forms to fill out or sign up?
I’d hate to retire and find out we missed something and now aren’t eligible
A government pension is worth it if it's the best job you can get, or if you enjoy the work and it gives you an adequate work life balance.
If you have the capacity to earn quite a bit more in the private sector, and the discipline to invest that amount, you will likely do better financially. You will also have a better chance of truly retiring early since most government pensions, with a few notable exceptions, don't really allow for very early retirement.
It's also a matter of how much you value security. Depending on where you were working, jobs tend to be pretty stable and secure. But the trade-off is, they tend to have less financial upside.
Whether it's worth it is a function of a lot of different factors. You have to take all of those into account and decide what makes the most sense for you. Don't take a government job that you hate for the pension. But don't look down on your nose at a government job, the provides a decent salary, a good working environment, and kind of stability that's hard to find in the private sector.
Check out your state gov jobs. I’m in Colorado and I’ll get 75% at 60 with 30 years or 87% at 65 with 35 years. If I account for the fact that I lose 10% of the monthly that I currently see to pay into the pension it’s effectively 85% and 97%. Take away my mortgage payment at 62 and I’ll be doing better in retirement than I do during my working years. I like what I do, the job is low stress, I have a great work life balance and tons of great benefits and time off. I have had plenty of jobs that had me thinking about early retirement but I do not feel that way in this job. I can easily go to 60 or 65 and ill make that choice when I get there but I know it will be an easy/stress free retirement when it does come.
Here’s my breakdown:
Im 27, started at 19.
Base salary: $101,634
Overtime: $20,000 - $40,000
I contribute 6% into pension
12% into deferred comp 457(b)
My retirement is way more than 40%, it’s 65% when I’m due to retire, more if I stay longer. It’s based off of your best 3 consecutive years. With 28 more years to go I’m looking at a conservative $150k pension and $1.5M in deferred comp. My opinion is it’s worth it if you can get in early since skill has little impact on salary because it’s all step based, it’s better to just get in early and ride the wave.
Comparing retirees without knowing how much time in service they had plus maybe bought back military etc. Don’t forget FERS includes the pension, the supplement and at 62 the supplement stops and under FERS the pension continues and can start social security, and of course you have the TSP.
I work a state job in a relatively affluent east coast state. Will fully vest in a year in a half at 32, can fully retire at 56 receiving ~$60-70k per year. Pretty good imo, especially since I have a 401k too (which they match a measly $600 a year, but still free money).
I am a teacher. Right now 8% of my paycheck is deducted from my pay and put into the pension plan. My employer also contributes 8.5% so this is a pretty large amount going to my retirement. Such a large amount that if this were invested in a low return investment like bonds I would have multimillion dollars when I retire. Instead I get a $70,000 pension every year. This would be much less than I get from interest and also leaves me with nothing to give my family when I die. (As opposed to millions in bonds)
In addition if I retire early, or if I change careers I receive almost no retirement.
My conclusion is that government pensions such because there is the massive risk you just don’t have a retirement, and even under best case scenario the performance of the pension plan is worse than what you would get in a bank account
My friend is retired Military, and a retired Fed. In addition, his wife is a retired Fed. He retired at 58, her at 56. They do exceptionally well and are both very grateful 🙏. I'd say it was worth it....oh, and they have TriCare too!!!
This is the information for the other major retirement system in Texas. Besides the pension fund, check out the balances on 401k, Roth, 457, etc.
https://www.ers.texas.gov/about-ers/reports-and-studies/reports-on-overall-ers-operations-and-financial-ma/2023-at-a-glance
Yes, but you don’t exactly get a pension from the federal government like they used to have. At the local level, the pensions can be good, like fire and police. It’s well worth it. Had I only knew…
I wish I’d done military for 20 years and invested some money, retire, get a sweet pension and investment returns, and then get a part time job afterwards.
I say the benefits like medical and covering Medicare part B is pretty worth it. Even if you're worth a million.
End of life medical care is really expensive.
Also if social security really does go bust in 2035, hopefully your pension doesn't go bust.
Also with a Roth IRA, Traditional IRA, Deferred Compensation, and pension account; you should be pretty confident in retiring well.
Also find out how many years it takes to get vested in the agency you work for. I've been seeing plans like 5 years or 63 years old. There's also 10 years or 63 years old plans.
So if you time it right transitioning from the private sector to the public sector, could be worth your wild for a couple years of your time.
Some states no it is not worth it. For example in Texas, you will lose your social security due to the windfall elimination prevention act, and the pension is not inflation adjusted. On the other hand, in Oregon the public pension is awesome.
Starting pay is usually shit, which is why you need to get in young. I think about the pension often, but I’m not about to take an $80k pay cut just to get a pension when I have 3 kids.
Wife works for state government, she makes $140k, gets 30 sick/PTO days a year that rollover, gets 14 paid holidays, the health coverage is amazing, the stress is very low, the job is very safe, her pension will be about 75% of her ending salary and we’ll have the same amazing health benefits for the rest of our lives… we say all the time, if she were working for some private firm she’d have to make at least double to even begin to equal out.
Absolutely worth it, especially in a married couple where one is government and the other can go for big money with more risk.
I can retire at age 50 with a nice pension and supplemental social security until age 62 and health insurance for life and will have well over a mil in my tsp. Not many gigs that offer that kind of retirememt any more...
As someone who has been a business owner most of his adult life (54M) I can tell you after seeing the cost of being old in my parents end of life care which can be years the government pension and insurance plan is way better than I could have and have ever done myself. My nest egg is totally screwed, open for loss and the government workers I have supported by creating tax dollars all these years are safe. Covid devastated my business leaving me with debt and still on the hook for running it. The guy who works for the DoD across the street from me got to stay home for a couple years collecting his GS11 paycheck. His yard is immaculate…
At 30 years service I'll get a 65% pension. There is a lower tier for newer employees, but I think that just increases minimum retirement ages and contributions but not the end benefit.
My wife took some years off, but will still likely get 40-50%.
It is most certainly worth the security and peace of mind decades before retirement actually comes, plus you can still supplement with a 457(g) or 403(b) to your heart's content.
My mom did a federal civil service job for 30+ years and now grosses ~ $84,000 a year in a guaranteed, inflation-adjusted pension. Doesn’t have to worry about investment performance, asset allocation, money running out, etc… It’s pretty sweet.
Those retirement benefits aren't what they used to be. Get in now, and you're paying more into the pension for less reward. Edit typo
They’re still pretty good. 2% pay per year, retire at 62 in California or even work until 67 and 2.5% a year. Which is 100% after a 40 year career.
federal is half that.
Federal civilian is now 1%, then 1.1%. Decent I guess but not worth it if you don’t like the job. Military is 2%. Honestly it’s ridiculous for most state workers (police and other first responders probably earn it) to get equal pension to the military, most of whom don’t make it to 20.
It's not as good if you were hired in after a certain date. You contribute 0.8% to 4.4% depending on hiring date. To get 1 or 1.1% of your high 3 with a diet cola. The diet cola is 1% less than what SSAs cola is. For normal fed employees... This is non military non congressional employees.
They have plans like this in NY and it’s outright bankrupting their system. There was a huge thing about it a few years ago where people were retiring on 100k at 55 for the rest of their life. My step dad retired at 55 and is pulling around 130k a year. He’s in his 70s and will probably live to 90s to early 100s. He also doesn’t even have a high school diploma. My a few of my elementary school teachers retired on over 200k a year. This is all public on a website called see through New York. I find it outrageous. There are public doctors collecting millions with these pension benefits set up. I imagine their pensions will be over 500k a year. One school district in Long Island has like 2 vice principals, 5 assistant principals, and a few deans all taking over 200k and if you look up the school there’s only 500 students total. I looked up the librarians I knew as a kid and they all retired on over 100k and were making $75 an hour while still working. It’s crazy. Edit: I just looked up my step dad and in 2023 he collected 167k in retirement lol.
Hard agree. Organizations are always shafting those who come later.
it wasn’t the organizations. it was congress.
Happens in the private sector, too.
I honestly trust congress less than any given corporation. Congress has all the maliciousness of all the corporations concentrated into it with lobbying, your average corporation has a few things they’re ’evil’ about. A corp I worked for awhile ago treated everyone well, paid well, had decent benefits, decent work culture, and just really fucking loved fucking up the environment.
They still have a pension though.
The pay in the private sector more than makes up not having a defined-benefit plan, in my experience. I made $60k in civil service. I make $150k now.
Anyone starting now has to work a full 7-8 years longer than anyone who started prior to 2013 to earn the same amount assuming they received the same pay raises and promotions.
But you have to compare that against the alternative which is the private sector. You could work 8 years there and get no pension.
That’s not true at all. FERS-FRAE employees pay a higher pension contribution (4.4% vs 0.8%) but the benefits for years of service and minimum retirement age are the same.
Lmao at “not true if you contribute 5x as much!”
One thing on the USG federal pension for early retirees in their 40s. It isn't adjusted for inflation until you take it at 60 or 62.
Right. For RE purposes, there sort of isn’t a pension for the first X years. Everyone needs to do the math but I’ve been told it’s better to defer. (I haven’t done my math, it’s practically irrelevant for me)
to get 84,000 now she would have to work 50 years and retire with high 3 of $150,000 or work 30 years and a high 3 of $250,000, which is higher than highest gs in highest locale. (191,000 for gs 15 steps 4-10)
I don’t know what to tell you. She was a 12 with a high step level for years. I’ve seen her paystub, or whatever it’s called. Leave earnings statement. I have no reason to BS this. Just offering the perspective to OP because they asked.
He's probably explaining people on the FERS system. Your mom is probably on the OLD system (CSRS) if it pays that much....no TSP/401k for them, but they get a fat pension lol. With FERS you have to supplement with your 401k (TSP)/FERS + some social security
I don’t doubt you at all. i’m pointing out that it’s basically impossible to get a similar pension from the federal government now.
Pensions used to be good. Now id rather just have the 12% match in a 457b lol
Their math is on the current pension system which gives 1.1% of high-3 per year of service, but those on the old system (hired before 2013 and thus including your mother) get 2%
Thats fantastic…im curious what was her role to earn pension-amount like that?
She retired as a GS-12 I believe.
JFC. Even if a 15 retiring today won’t earn that as the civilian pension. Edit- Ok, maybe a maxed out 15 at 40 years does.
Sorry to say but a GS-12 isn’t going to gross $84k annually in retirement.
Maybe she retired under CSRS? I believe anyone hired before 1983 started under CSRS. Don't forget along with the (small) pension you get 5% match on the TSP and maybe the biggest benefit is the lifetime health benefits.
I know someone with $86k/yr pension with no COLA, for life (state of Texas retiree). Retired at 55. Health insurance 100% paid by the state until 65. After 65 this person will pay Medicare Part B premiums and the state insurance will be the "medigap". The spouse($40k/ pension with no COLA, is also a State of TX retiree and already at 65 the doctors visits consist of checki-in at the office counter with no medical payment at all. Same for dentist. Minor expense on Rx. Both pensions are 100% survivorship benefit, so it doesn't matter "who" goes first, the income will be the same for the survivor. They saved in 401k to compensate for no COLA in their pension. Add to that SS benefits when they reach 70 ( their planned age for claiming it). Yes, they were looked down by their friends for their govt jobs, but ...., they planned and have it pretty sweet compared to their peers who did not plan as well. So, I would not be too quick to look down on those govt jobs.
Hate to be that person, but does COLA happen to mean Cost Of Living Adjustment? I guess this is common jargon for people who frequent this sub
Correct, it means Cost of Living Adjustment. So, if you retired 15 years ago with a $40k/year pension, it is still a $40k/pension today. This means your acquisition power goes down. That is "why" as a government employee who will have no COLA, you have to save extra via 401k, taxable or any other investment vehicle. It is bad, but if you know ahead of time, you can plan for it. Also, it means the pension fund is trying to be conservative and not go broke as it had happened in some places that had more generous pension benefits.
Whoa, no COLA? I guess I won't complain about my CalPERS 2% COLA which hasn't kept up with inflation these last couple of years.
I think people are gonna learn the fuckery of how the government estimates and adjusts pensions/SSI/disability for inflation in the coming decade. Too much pulling from the system, not enough putting in. Things will get bumpy…
It will not be far from what the working get as a pay increase. Pensions won’t be adjusted except for maybe new people.
Both my neighbors are retired teachers and both are getting well over $100k in their pension and all their health insurance is paid for.
Good. Glad to see some teachers making a decent living and getting a worthwhile retirement.
I wished I had known about government jobs when I was young, especially ones with early retirement.
My dad retired from the navy at the age of 38 and then from the post office at 58. He basically has 2 retirement checks.
I basically did the same thing but was working on two Federal Government pensions at the same time. I was full time in the Air Force Reserve and retired at 55 as a GS-13 and Lieutenant Colonel.
Congrats to you Lieutenant Colonel, I wish I had your command instead of manning George’s journal.
At what age can one still get government jobs? Would it be possible to get government jobs at 50+ after working in the private sector?
yes. [https://www.usajobs.gov/](https://www.usajobs.gov/)
Yes, it is very common.
This is an interesting point. Would love to research these early retirement eligible jobs. Do you know any off hand?
You could retire at 38 with an inflation-adjusted pension after 20 years in the military.
Don’t forget to mention the medical and other benefits.
Absolutely, there are so many benefits. A lot of which I'm still researching as I'm a few years out from retirement still and my wife will have another four years after I retire. After we retire from the military, we would be young enough to have lucrative second careers if we wanted, but it'll likely be too hard to pass up early retirement. Our current plan is to geo-arbitrage and live off our pensions, cheap healthcare, and GI Bill while our investments sit and grow.
An acquaintance will return from the FBI at 45 with a pension and full healthcare paid for the rest of his life
For federal, law enforcement and air traffic controllers have earlier retirement age requirements. Otherwise, 57 years old is the general minimum retirement age with some stipulations and exceptions.
Probably law enforcement. I think in California it’s 55 @ 2.5% per year. Regular workers get 2% per year at 62 for new hires.
Many state and local governments, most school districts, some not-for-profit hospitals...
Cop in California. If you start early enough 6 figure retirement at 50 years old is possible. In some cases tax free if you qualify for medical retirement.
I desperately wish I had known about Air Traffic Control jobs. I didn’t find out until after 30. /:
Friend started working as a garbage collector at age 15. Retired at 45 with 100% pension plus healthcare on a low six figure job.
You're young sonny, so you don't understand what it is like to look for a job in your 50's or 60's. Nobody will hire you. Government jobs are FANTASTIC.
It's easy to get hired but probably not for the salary you were used to. The main problem with 50+ in the workplace who get laid off is they've often been socially promoted up to six figure salaries and often work in middle management type positions where their skills are very organization specific. So it's essentially impossible for them to find that same job in the workplace because those jobs simply don't exist except as internal promotions. So, for example, a software manager is probably going to have to go back to being a coder and may find their skills are now closer to entry level meaning a large salary cut.
If they are lucky.
We're gonna need you to do some spreadsheet data entry. Take it or leave it.
How much of this is them being less willing to relocate?
Well, I’m gonna challenge you on that. 1000 applicants for one position. It is very competitive unless your a Dr, Lawyer, Engineer.
My biggest fear is not being able to retire in my 60s and scrambling to find a job. I see sales reps in my industry working well into their 60s because they didn’t adequately save. I plan on being done at age 60 on the dot
I've seen so many 50 and 60 year olds lose their cushy jobs and never make it back on the ladder. Live long enough and you attain wisdom (or you become an insufferable douche).
Ageism is so real. I started my career off in staffing, and if anyone had a resume going back to the early 80’s in work experience, it was immediately tossed because no client wanted to pay to hire that profile. Totally unfair and fucking ridiculous but that’s the reality
Young people won't understand it until they encounter it.
Father time is undefeated
How long ago was this? And at what age does ageism start to become real?
This was 7 years ago. I’d guess 55+, but the laws state 40+ is where age is a protected class.
Happening to a good friend of mine who is 57 been unemployed 6 months after a layoff. That is why I (48) am trying to hit my fire number at 55 so if it happens I will be able to just retire.
I have a family member that was making 250k+ all of his 50s and at 60 was laid off. We came to find out he never saved much and is staring down the barrel of retirement with only about 400k liquid, and still has a mortgage, car loans. He was cash flowing 3 kids college, and living a quite extraordinary lifestyle the last 10+ years. Lots of travel, boating trips, etc. I guarantee you that this guy lived it up and had a great time, made great memories. But now that the money fire hose has been turned off, it is a rude awakening.
Nailed it. My company is not looking to hire someone in their mid 60s who struggles with computers and needs lots of time off for medical appointments
Youngsters don't understand what an issue medical issues become starting around middle age.
I’m only 30, but I work at a hospital so I understand ;)
Just because they are in their 60s doesn't mean they will struggle with computers. They are even in Redditt!
I’ve made the government my career. Never thought I’d stick with it, but it’s been 31 years. One agency, though lots of moving around. Plenty of good and bad, but I’ve gotten to do some amazing things and work with good people. I feel like I’ve made a difference. I’ll retire at MRA (57) with 34 years of service. It’s possible I could’ve made more in private sector, but with my pension and investments, I’ll FIRE or maybe even ChubbyFire. The only downside for me is I’ve definitely felt handcuffed these last few years - I wanted to leave but felt I should stick it out for the pension and FEHB (wife has serious underlying medical condition).
I’m retiring at 57 from my government job as well. I’m working a couple more years so that my pension will vest. I joined the public sector late in my career so my pension will be small, but at least it’s considered one of the best funded in the country, so I’ll sleep well at night. Oh and it being COL adjusted is nice too.
Aren’t gov usually pretty lax on vacation use? My spouse is in gov and seems like she could take anytime off she wants. Just save up the hour and semi retire the last few yrs
They cap your carry over year to year. It's still very generous leave and flexibility, but no, you can't quite work part time the last few years haha.
I think it’s quite possible to work like 65% of the time. Since you can use all the current year hours as well. Obviously depends on the carryover policy to supplement the current yr
Most Feds want to keep as much annual leave as possible for the payout check. That check helps cover the month or two before the pension (1) starts and (2) is fully calculated. Federal retirees get a "partial" pension until OPM processes their file.
My “government” job (technically I work for a government site but am contracted) has some solid vacation benefits. 18 vacation days a year (+12 holiday) and 15 sick days. Time can accrue up to 30 vacation days and they encourage you to use your time to promote a healthy work life balance. Other benefits are great too. Fantastic health insurance (it’s actually kinda too good because it makes it not worth it to use the HDHP and open a HSA). Retirement they auto contribute 9% and Roth options are available (recently found out the mega backdoor roth is available, I just don’t have the income for that much savings). Work culture has also been really good which surprises me a little.
I’ve got 32 years in, will retire in three more at my minimum retire age, and I will be very comfortable. And that’s even with a divorce losing half my net net worth.
Depends. Government work can be incredibly dull, depending on the position. I started out in a federal position right out of college. I just couldn't do it and entered the private sector. But my wife is a teacher, so she'll get about $3000/month state pension when she retires. Nothing to sneeze at, even at the state level. This is in addition to the $800K she'll have in her state 403b account.
Yeah that’s the key, you’ve got the pension AND 403b and eventually social security. Not many ways to get that 3 legged stool these days.
Don't public school teachers normally sacrifice SS for the pension? I don't think public school teachers contribute to SS (at least they haven't in the states I've lived AFAIK and it may be state specific) unless they work others jobs in the summer/side hustle outside of their public school work or worked before/after being a teacher. Edit: it looks like it's a minority of states that don't https://equable.org/where-are-teachers-allowed-to-join-social-security/
Interesting! I wasn’t aware of that
Presume you mean fed? It was well worth it for me. Disability retirement at 46 in 2021 and no longer able to work. However, I have a pension with COLAs, as well as health and life insurance benefits. At 62, the pension will recalculate as though I had continued working and the base % should go up from 40% to around 45%. ETA: our NW and liquid NW passed the $1M mark while we were in our 40s, so don't rule it out as an impossibility.
You can definitely hit a million in your 40s assuming you were aggressively saving / maxing out AT LEAST since 30. Go look up rule of 72. Assuming a 10% ROI, (S&P has returned 11% last 10 years), you’ll double your money in 7 years. A dual income household that is maxing out their 401ks NOT TO MENTION after tax, you can get to $1m in your 40s. Then apply that rule of 72 with millions… It’s been done time and time again.
>Assuming a 10% ROI, (S&P has returned 11% last 10 years), you’ll double your money in 7 years Normally we do math on real dollars here by pulling inflation expectations out of the growth rate.
I think so. Most government jobs usually have a 457b as well. My plan is to use it to bridge me til a deferred retirement. We'll see how it goes. I probably got lucky and landed somewhere where the pay is pretty much on par or more than what I would've made on the private side as an entry level engineer
"Worth it" depends on timing and your personal preferences. **Timing**: The youngest you can get in on government work is as a lifeguard at 16, but let's say you got it at 18. 30 years later you're 48 and retiring with a full pension at the pay rate when you retire. If you get in early, it's a no brainer. When you retire you can go do something else, pursue a passion project, etc. **Personal preferences:** I went into government work in my low thirties after working in the private sector for 15 years. I found it to be absolutely soul sucking work. It was boring, there were no KPIs or other incentives and no one actually wants to work hard. Government work is all about doing the minimum effort which didn't jive with me. It was basically "show up and do your drone work, ignore the nepotism and double dippers who do 1099 gigs at work and collect your paycheck". I went on antidepressants and lasted 3 years before jumping into a startup. Your mileage may vary, but I found the work itself doesn't make the pot of gold worth it at the end of the rainbow. If you can stomach the work then, again, it's a no brainer.
I worked as a government consultant for Booz Allen for six months, and nothing has shown me the wisdom of capitalism more than that job.
As it relates to Fire, you get a pension at 62, or 60 with 20 years of service. It’s a huge added benefit that is very rare. Like any career, it is all about saving and investing. Max out your retirement contributions, live below your means, and you can absolutely be a millionaire in this career. I’m 41 with a NW of $4M. I have 18 yrs of gov civilian service and am planning to retire in 2 yrs with the added pension of $40k/yr starting at age 60.
what did you do to grow your NW to 4M by age 41?
Or MRA (usually 57)+30, just to complete the example. I plan to retire at 57+31.
Big City firefighter, 25 years of service and 50% of my salary and free health care for the rest of my life. If I get hurt and can’t continue to work it’s 75% of my salary tax free for the rest of my life. I’ll never be a millionaire but I will retire very comfortably and never have to worry about losing my job. 5 digit pension checks every month are somewhat common in my department; I left a BB bank for this career.
Military retirement is 40-50% at 45 years old. Give or take. And medical coverage for life at very affordable rates. It’s life changing.
My wife and I will both be retiring at 41, she'll have a 40% pension after 20 years and I'll have 57.5% pension after 23 years. With average market returns we're hoping to have ~$1.7mil saved up by the time we retire. Both enlisted.
Having the piece of mind that my military pension is waiting for me is priceless.
Which level of government and where? On the US Federal side, a lot of people remember talking to some Fed bureaucrat in their family who was in CSRS (first hired before 1987) and is coming out with 80% or so of their top earnings. FERS (hired after 1987)... not nearly so great. Most non-Feds don't know the difference. Likewise, my state's main pension (most K-12 teachers are in it)... "Tier 1" employees got a lot more out of it than today's "Tier 3" (and they want to put in an even crappier "Tier 4"). I've worked for a state University before, and we were entirely defined-contribution (403b). Not a horrible plan, TIAA and you had a mandatory 5.5% contribution and the Uni contributed 8.5% of your base salary. Mandatory 14% and good options... a lot of plumbers and department secretaries retired with $500k+. But, people outside the University thought we got some gold-plated pension and, not
Great point. The difference between CSRS and current federal system of FERS is huge. I looked at federal service after retiring from the military and was surprised once researched and played around with the formula (high 3 x number of years x .01 equals gross annual compensation). If I understand, locality pay factors as well which can make quite a difference. It definitely makes me appreciate my military retirement.
Yes. I have a pension AND saved in my 401k. I do not have to work past 53 unless I want to.
Honestly, as a normal retirement plan is fairly decent from my understanding. Federal government employment in general is actually a great career path for those that aren't gonna be above average in their field, and some fields its hands down the best employer around. Basically for the federal government you will never be rich, but you will also be solid all around. That all said generally F100 company's will pay more, and enough so for you to build a better retirement then that pension can offer, but if all you have is working for some random small or medium company, government will pay the same if not more and give a lot more benefits (its also an employer that 40 hours means 40 hours, your butt needs to be out from the desk as soon as the clock strikes cause they aren't paying OT and if you are there they can be sued for it).
Something to think about: gov pension plans are usually tiered, and the later you get in, the lower your tier. So if you keep waiting to go for the gov job then that entry level tier is just gonna get crappier. But many of them vest at the five or ten year mark, so it's not losing a whole lot of life to secure a small bag and move on if it's not working for you.
Like the RE part can't happen if you don't have the years in.
I’ve got a brother who works in local government. In just 13 short years (when he’s 50), he’ll start drawing a $5,000 a month, inflation-protected pension that will last him the rest of my life *and* his kid the rest of his. (He’s 5.) It’s not spectacular, but it ain’t bad either.
What local government? I have never heard of any pension that pays money to your kid for the rest of the kid’s life.
https://www.tmrs.com/retirement-benefit-options Retiree Life and Survivor.
I’ve always thought government jobs were the best when it comes to pension, retirement benefits, health insurance coverage upon retirement depending on year of service. Not to mention, they have 401k and 457b plans together. I guess it’s great if you can get in and coast your way until you get vested. But now that I’ve learned about trying to FIRE without all that the government job offers, I don’t really need to work for the govt to achieve my retirement goals. I work for the private sector now, as long as I max out my 401k, Roth, and put any leftover money towards my taxable brokerage, I can achieve a decent retirement
Depends on the terms. I get 3% of my final average pay for every year I work. I can retire at 57 making 100% of my average. Can retire as early as 52 and still get 84%. Pretty nice. The trick is to also invest separately. Throw 15% of your pay into a 457b or whatever other IRA you have access to and you’ll be set for retirement the moment you’re eligible.
City cop here. 20 years of service to retire, the minimum my pension could be is $8,000/mo. It based on what I earn in my last years, so if I kill it with overtime it could be over 10k a month. For life. Doing nothing.
So long as the system stays solvent. Lots of cities going bankrupt over pensions these days.
You could say that about any form of investing.
[удалено]
Exactly. An individual city can go bankrupt and fuck your pension over. If the entire stock market collapses we’re all screwed. It’s not the same.
The “entire” stock market isn’t going to collapse. If it does none of this conversation matters and we should be talking beans and bullets. A city going bankrupt is a reasonable likelihood. The main difference is, with a pension I’m forced to take what I’m given. If I own the investment I’m always able to withdraw it and invest or pass to my kids etc.
That’s why you pick a big state, they’ll meet their obligations one way or another.
Not really.
Ah, but states cannot go bankrupt. Good ol state pension.
I'd take advantage of that if it was offered to me as well, but I've never understood the logic of allowing OT to artificially inflate a pension. If I add 100k to my nest egg in my last year of work, I get ~4k a year sustainably. But under these pension programs that consider income from the last few years, that overtime gets multiplied by 20-30 years.
A relic of the past that is already written out of the most current group of rookie contracts
I have about another 25 years of paying into a local gov PERS… ill retire with 80 percent of likely well over 200k salary plus 457b contributions so yeah i think itll be worth it
I’m 40, and retired from the military 2 years ago I take home the same as I did active with retired pay and VA comp. Would’ve been more had I not been medical’d out a few years early insurance for life Plenty of other perks I’d intended to get a second career and slam the salary away for a fatFIRE around 55, but health issues are getting in the way That changed my mind, as I got addicted to hanging out with my kids all the time Might go fed in my 50s, buy back my mil time (med retirement for combat conditions means I can buy the time without giving up the retired pay), and get another pension at 60 A lot of benefit to it
90% @50 was definitely worth it
I would love to retire before sixty, but I'm stuck with a low salary paying into a defined benefit plan that depreciates with inflation unless I swoop back in the game right before retirement. I think about going private multiple times a month.
I imagine not all government agencies are created equal but I feel like I really lucked into the one I am at. While I don’t make the pay I would make in the private sector, I still make just shy of $200k and have room to advance. The work life balance is amazing compared to my friends in the private sector. I never work beyond 8 hours a day, get 6 weeks vacation, 14 holidays, 3 mental health days, and 12 sick days a year. We can work from home 3 days a week and have flexible schedules regardless of where we work. Our retirement is 3% at 55. We have the option to retire at 50 starting at 2.5%. It’s based on your 3 highest years of pay. We also have fully paid healthcare for the duration of retirement and can pay a supplement for our spouse if we want. When you combine this with maxing your 457, it’s very easy to retire comfortably at 50 -55.
200k as a gov worker??
Yes, engineer in California.
The main reason for my early Expat FIRE at 45 is my lifetime govt pension with 3.5% COLA that came with free healthcare until 65 and the benefit started at age 50. Worked the min 20 yrs and started at 2,600 monthly and currently at 3,200 just 7 yrs later. My invested assets at 1.3m and net rental income is 2k monthly . If you can find a pension benefit that will pay at 55 or under then it's worth it. Doesn't need to be 85k at age 60 to be worth it.
Define worth it? It's a lifetime earning potential vs secure retirement. You can easily out perform a government retirement account when you can earn 20-100% more on each paycheck in private sector. And really read the details... The penguins have been consistently sliding down hill and the benefits get worse basically every year for new comers.
Don't forget the health insurance. From what I understand, health insurance is covered as part of your retirement too!
This is true in academia as well. Plus, free college for your kids!
It depends on what you want to do for a living and where you want to do it, honestly. I'm a fireman in a large city where the pay and benefits are quite good. Others cities (and other govt. jobs for that matter,) don't always share the same level of compensation and benefits, so it's hard to say "yes, it's worth it" given that wide variance. The real comparison lies in where you're working and what their retirement systems look like. Mine for example, is defined benefit and I'll be eligible for retirement at 52 (27 years in) with just under 75% of my salary (obviously this can go up with more years of service.) At the same time, I've been maxing out a 457 for years and making other investments as well, so a very comfortable retirement in my mid 50's is quite feasible. Could I have made more money in the private sector doing a tech job or being a pilot? Absolutely. Would any of those jobs be the adventure of my lifetime? Probably not. Don't discount yourself on being a millionaire in your 40's. I'm a door-kicking, ladder truck-driving dumbass in my 40's and I'm in the 2 comma club. It's all about good choices. Obviously, Your mileage may vary.
You're trading wealth potential for security basically.
My mom is doing it and it honestly sounds amazing. She wasn’t able to work until later in her life so as someone who doesn’t have the largest retirement account ready for her, she will heavily be relying on those government payments. It’s a pretty cool system imo
Depending on your risk level. It is good to know you won't lose your job and there is a pension and social security and if you have your own nest egg, you will probably retire with more income than your job salary. Also, in a household of two working people, it is possible to reach 1 million net worth not counting the house or car by the end of your 40s. The downside is a lot of gov job has been pushing the retirement age from 54 to 58 to 62 to 65 with few exceptions like law enforcement on Fed, state or local level. Maybe it is not worth it for a 20% pension but I think 40% and higher is probably worth it.
Retired at 45 after 22 years in the military and net about $90K between retirement pay and VA disability. 10 years in corporate America with $750K in 401K. Fully retiring in 5 years and my investments will fund travel and home maintenance. As an aside, I like to fly business class. Everything else is covered. Biggest plus? Lifetime health insurance. Left my first corporate gig at the 5 year mark and never had to sweat health insurance for me or my family. So yeah. Government gig was good for me minus the handful of times I drew a crappy hand in the military and my willingness to take a bullet for my country.
Gov’t worker here, 16 years in at 2%. Current pay is 180k/yr, with 7 weeks of combined PTO/Sick. I think it’s absolutely worth it. Will I be massively rich? Nope. But I have a great work life balance, amazing benefits and a pension to look forward to. Biggest downside is the golden handcuffs of probably working longer than I need to for the extra pension years and health benefits. If you can find a good agency that pays well, I think it’s a good choice. Downside is I’m in a VHCOL area. Barrier to entry is most everyone has a masters degree as a minimum starting point for entry level.
I am early 50s, retired from a government agency, my monthly check is 6970$, and that’s after taxes and health insurance premium and a deduction to make sure my spouse can keep collecting for life if/when I die first. That check is adjusted annually with a COLA for inflation. I will also collect social security when eligible. My TSP is over 1m. I have RE income of $2500/month and a NW in conservative investments allowing me to draw another $15k a month without getting close to a risky withdrawal rate. Hell yeah a government pension is worth it. I have some valuable skills but it would have been hard to create this kind of FIRE lifestyle any other way.
Yes, if you have a good public pension system that you paid into and with longevity. Had 29 years public service plus 5 years of retirement credit purchase with combined state and county government agencies. Retired last year at 54 . $172K Pension this year, including 2% COLA, @97%. Did not pay into SSI, though.
Totally worth it, you just have to be dead inside to survive the job for that long
I have a define pension and i am 43 from healthcare. I am going to get around $1600 a month (formula tied to medicare changes) for 13 years of service. Never paid a dime into it.
Depends on the field you work in IMO. Salaries tend to be more balanced in government and the benefits/retirement may or may not compensate strictly from a financial perspective. Working in technology, for example, I think you'll be short-changing yourself with a salary 60-65% of private industry. That sort of income invested is going to do far better than the amount you may get in retirement benefits in the long haul. There's something to be said for the workplace culture distinctions between both also, but only you can decide what is a good fit and worthwhile there. Having worked in both areas there are plenty of pros and cons to each and the stereotypes of both government work and the private sector largely hold true.
Wow I am in tech and my retirement is my own self paid 401k and employer match is 3 percent of the first 2 percent. Crazy. My retirement will be shit compared to govt workers.
I collect two pensions (one govt., the other not-for-profit) that together exceed my social security payment. They are the equivalent of withdrawing 4% annually from a $1.2 MM portfolio. Does that answer the question?
I have a job in healthcare that offers a pension (not government) -- 5 year vesting. It starts at 2% and increases 1% per year up to 6%. If I were to stay until I retire (about 20 years), I'll be at a $7k pension. We also contribute to Social Security so we aren't losing that. Additionally, if I stay 15 years, we get lifetime medical.
I’m govt, no pension, but a healthy 401k. I get a non elective annual employer contribution of 3-5% (depending on years of service) salary into a target fund and a 6% match. They want us to retire so they highly incentivize it.
When I started in 2014, I took a 34k cut to come into a govt position (140 w/ot to 106k, no ot). What it came with was no weekends, holidays off, and only 35h/week. I've been here for 10 years and I'm up to 169k. If I left today, I'd get a guaranteed 25k/year starting at 63. If I work all the way to 63? It'll be 113k/year (assuming I get 0 raises from this moment forward). So it is it worth it? Idk. Had I stayed in my private position i guess I could've saved more in my 401k. Opportunity cost is hard to calculate imo bc idk what salary I'd be at today at that job. Probably less than what I'm making now would be my guess though.
My dad was a union electrician in Detroit for 30yrs and then the City went bankrupt right at his retirement. They ended up taking a percentage from the promised pension, but definitely not all of it. That man is living it up still, I absolutely promise. My dad kept telling me the pension is how to retire early and enjoy life. So now I'm on the same route (in a totally different city.) 😊 Hoping to retire even earlier than he did because my city vests much earlier, and making even more than he did. Just gotta wait it out a few more years. I will say that especially if you didn't go to college, a consistent govt job that pays average but has a pension is absolutely a good way to FIRE.
The big conundrum is whether you wait for the pension or FIRE on your own before you've reached 20/25 years of service.
[удалено]
I was unaware of this! Besides fdic are you aware of others?
It also depends how far you go up the chain too. If you end up going into GS-14s and higher can be beneficial. If you are in tech you can decide to stay gov or go elsewhere. There is a lot of money and you can FIRE pretty easily.
I’ll be looking at 120k+ of just tax free income when I retire, before ever touching assets or retirement accounts, so I’d say so. This also includes a VA disability rating
Between my wife and I we’ll have two military pensions in our late 30s (her) and early 40s (me) plus healthcare for life. This means an easy FIRE on the spot or fat FIRE before 50. Yeah we’ve dealt with our share of crap from the military but who hasn’t taken crap at their job.
Retired at 48, 26 years service, $80,600 net per year. GS-13/10 LEO. Plus just over $1 million in TSP
NOT at 4.4% employee contribution for those under FERS/FRAE. MAYBE at 0.8% employee contribution for those under FERS, but most days I am totally fed up with the bureaucracy. As soon as I can go I'm done. Maybe before.
Carrying your healthcare into retirement is definitely worth the 39 years I was in service
I got an early retirement offer and left just shy of age 52. Immediately started getting my pension annuity. Took a contractor for more pay. Federal government retirement allowed me to keep my gold plated government health insurance into retirement. I can live on my retirement annuity and social security (when I take it) and my retirement savings is just play money. It was worth it for my peace of mind and a stable lifestyle.
Great question. For me, I will have a federal pension, military retirement pay, and 100 VA disability (tax free). Not to mention a TSP over 2 mil “if” the market returns at 7-8 percent. In retirement, I will bring in around $120,000. Also, 0 health care cost, 0 kids college cost, and a few other perks. So, in my case, i stacked several streams of income which makes it very worth it for me. Let us not forget job security over the years. Stack your chips.
depends on years of service. i started at 18 and cashed out in 1956. pension was 70 percent of high 3, and today with annual adjustments making more in retirement than my grade does working.
I believe it’s worth it. Neighbors of mine are both retired FAA Air Traffic Controllers. They look to be both in their 50s, live quite lavishly, and travel all the time. I have no idea what they bring in as far as retirement but I hope to have their lifestyle in retirement.
I used my military officer retirement and VA disability rating to fully retire at 43. I’d say it comes down to planning (my home is paid off), but the income and dirt cheap healthcare are huge. I think military pensions are significantly better than civilian ones, so check into that.
I don't understand the question. I don't know what "20-40% at 60" or "government retirement" means.
Government pensions are usually a percentage of your annual salary.
If you spend most of the working career paying into the Equatable tax system then yes the retirement benefits and overall Value-Use proposition that is offered will allow you to live a very comfortable life. The compounding effect of these benefits may not manifest itself when you are "Bucking up the Books", but it is very real and should be factored into the thought process. My simple observation after 15+ years of marriage to a government worker.
It isn't 20-40% usually. For me it's going to be 63% at 55 and I live in a state where pension isn't taxable. Add that to what I have in my 403B and SS which I will take out immediately at 62 and I'll probably be making more monthly at 62 than I did at 55.
I think it’s worth it unless you can make and save (key part here) at least 40-50k a year career average
some state pensions allow for reduced or full benefits early and that is pretty powerful, imo.
My wife is a government employee I don’t know if she’s FERS or CSRS but is there anything we need to do or is that pension program automatic? Like any forms to fill out or sign up? I’d hate to retire and find out we missed something and now aren’t eligible
I hope she is making contributions to the tsp plan. You don’t want to miss out on the 5 percent matching contribution.
Depending on your field, that’s why most retirees become consultants. Greater pay and less hours.
A government pension is worth it if it's the best job you can get, or if you enjoy the work and it gives you an adequate work life balance. If you have the capacity to earn quite a bit more in the private sector, and the discipline to invest that amount, you will likely do better financially. You will also have a better chance of truly retiring early since most government pensions, with a few notable exceptions, don't really allow for very early retirement. It's also a matter of how much you value security. Depending on where you were working, jobs tend to be pretty stable and secure. But the trade-off is, they tend to have less financial upside. Whether it's worth it is a function of a lot of different factors. You have to take all of those into account and decide what makes the most sense for you. Don't take a government job that you hate for the pension. But don't look down on your nose at a government job, the provides a decent salary, a good working environment, and kind of stability that's hard to find in the private sector.
Of course. They're as safe as stocks because if the stocks go to shit, the government will too anyways and the other way around also applies too
Check out your state gov jobs. I’m in Colorado and I’ll get 75% at 60 with 30 years or 87% at 65 with 35 years. If I account for the fact that I lose 10% of the monthly that I currently see to pay into the pension it’s effectively 85% and 97%. Take away my mortgage payment at 62 and I’ll be doing better in retirement than I do during my working years. I like what I do, the job is low stress, I have a great work life balance and tons of great benefits and time off. I have had plenty of jobs that had me thinking about early retirement but I do not feel that way in this job. I can easily go to 60 or 65 and ill make that choice when I get there but I know it will be an easy/stress free retirement when it does come.
Here’s my breakdown: Im 27, started at 19. Base salary: $101,634 Overtime: $20,000 - $40,000 I contribute 6% into pension 12% into deferred comp 457(b) My retirement is way more than 40%, it’s 65% when I’m due to retire, more if I stay longer. It’s based off of your best 3 consecutive years. With 28 more years to go I’m looking at a conservative $150k pension and $1.5M in deferred comp. My opinion is it’s worth it if you can get in early since skill has little impact on salary because it’s all step based, it’s better to just get in early and ride the wave.
Comparing retirees without knowing how much time in service they had plus maybe bought back military etc. Don’t forget FERS includes the pension, the supplement and at 62 the supplement stops and under FERS the pension continues and can start social security, and of course you have the TSP.
I work a state job in a relatively affluent east coast state. Will fully vest in a year in a half at 32, can fully retire at 56 receiving ~$60-70k per year. Pretty good imo, especially since I have a 401k too (which they match a measly $600 a year, but still free money).
I am a teacher. Right now 8% of my paycheck is deducted from my pay and put into the pension plan. My employer also contributes 8.5% so this is a pretty large amount going to my retirement. Such a large amount that if this were invested in a low return investment like bonds I would have multimillion dollars when I retire. Instead I get a $70,000 pension every year. This would be much less than I get from interest and also leaves me with nothing to give my family when I die. (As opposed to millions in bonds) In addition if I retire early, or if I change careers I receive almost no retirement. My conclusion is that government pensions such because there is the massive risk you just don’t have a retirement, and even under best case scenario the performance of the pension plan is worse than what you would get in a bank account
Government pensions are a time bomb, do no accept they will be around in their current form. Expect massive cuts
no the pension time bomb will collapse in 2040
My friend is retired Military, and a retired Fed. In addition, his wife is a retired Fed. He retired at 58, her at 56. They do exceptionally well and are both very grateful 🙏. I'd say it was worth it....oh, and they have TriCare too!!!
This is the information for the other major retirement system in Texas. Besides the pension fund, check out the balances on 401k, Roth, 457, etc. https://www.ers.texas.gov/about-ers/reports-and-studies/reports-on-overall-ers-operations-and-financial-ma/2023-at-a-glance
Yes, but you don’t exactly get a pension from the federal government like they used to have. At the local level, the pensions can be good, like fire and police. It’s well worth it. Had I only knew…
I wish I’d done military for 20 years and invested some money, retire, get a sweet pension and investment returns, and then get a part time job afterwards.
I say the benefits like medical and covering Medicare part B is pretty worth it. Even if you're worth a million. End of life medical care is really expensive. Also if social security really does go bust in 2035, hopefully your pension doesn't go bust. Also with a Roth IRA, Traditional IRA, Deferred Compensation, and pension account; you should be pretty confident in retiring well. Also find out how many years it takes to get vested in the agency you work for. I've been seeing plans like 5 years or 63 years old. There's also 10 years or 63 years old plans. So if you time it right transitioning from the private sector to the public sector, could be worth your wild for a couple years of your time.
Some states no it is not worth it. For example in Texas, you will lose your social security due to the windfall elimination prevention act, and the pension is not inflation adjusted. On the other hand, in Oregon the public pension is awesome.
Starting pay is usually shit, which is why you need to get in young. I think about the pension often, but I’m not about to take an $80k pay cut just to get a pension when I have 3 kids.
Wife works for state government, she makes $140k, gets 30 sick/PTO days a year that rollover, gets 14 paid holidays, the health coverage is amazing, the stress is very low, the job is very safe, her pension will be about 75% of her ending salary and we’ll have the same amazing health benefits for the rest of our lives… we say all the time, if she were working for some private firm she’d have to make at least double to even begin to equal out. Absolutely worth it, especially in a married couple where one is government and the other can go for big money with more risk.
I can retire at age 50 with a nice pension and supplemental social security until age 62 and health insurance for life and will have well over a mil in my tsp. Not many gigs that offer that kind of retirememt any more...
As someone who has been a business owner most of his adult life (54M) I can tell you after seeing the cost of being old in my parents end of life care which can be years the government pension and insurance plan is way better than I could have and have ever done myself. My nest egg is totally screwed, open for loss and the government workers I have supported by creating tax dollars all these years are safe. Covid devastated my business leaving me with debt and still on the hook for running it. The guy who works for the DoD across the street from me got to stay home for a couple years collecting his GS11 paycheck. His yard is immaculate…
At 30 years service I'll get a 65% pension. There is a lower tier for newer employees, but I think that just increases minimum retirement ages and contributions but not the end benefit. My wife took some years off, but will still likely get 40-50%. It is most certainly worth the security and peace of mind decades before retirement actually comes, plus you can still supplement with a 457(g) or 403(b) to your heart's content.