FERS Social Security supplement?

[ripper]

This may have been explained somewhere else on this site but I haven't come across it.
Could someone please explain the formula that is used in calculating the Social Security supplement for FERS employees who retire before age 62?

[pogo]

FERS Annuity Supplement

The formula for calculating your FERS Annuity Supplement is:

(Number of calendar years of FERS service/40) times what you receive from social security at the age of 62---you can only use the social security earnings that you earn while working for the gov. not any outside company that has no ties to the gov. for example you can't use social security earnings that you had from say burger king when you work there at the age of 16 yrs old

[Show-me]

Is it true that the number you get from the formula some how comes out of FERS and not Social Security?

[hessian]

FERS Annuity Supplement
The formula for calculating your FERS Annuity Supplement is:
(Number of calendar years of FERS service/40) times what you receive from social security at the age of 62---you can only use the social security earnings that you earn while working for the gov. not any outside company that has no ties to the gov. for example you can't use social security earnings that you had from say burger king when you work there at the age of 16 yrs old

The Annuity Supplement under FERS, is only "offered" if you ar under a RIF, SEP, or Voluntary Early Retirement Arrangement (with your employer)!!!

Not very likely to get these anymore -at least where I work, (given so many folks are coming to retirement age/eligible, (now without above "special conditions" being necessary).
It is meant as a supplement - in other words its meant to fill gap between your MRA, or a date after this, up to, and only until you become SS eligible! -Then the Supplement ends.

But like I said, you need "special arrangements," the old buddy system basically, to get this "arranged" for you. The amount is supposed to be very similar, if not the same, as what you'd get with SS (assumes age 62) - but again this will depend on your being under the "special conditions" above - AND, being made an "offer" for the Annuity Supplement. IMO, you'd best know someone high-up to get this -but I suppose that we can hope! ;)

[budnipper1]

2932

2933

[hessian]

Budnippper,
That's good, I shoulda thought to post actual forms.
Problem is, when you dig deeper, you'll need to look into the word/phrase "eligible."

[Special Retirement Supplement - "An additional amt paid by OPM to retirees eligible for full retirement benefits to supplement the total retirement until SS...age 62"]
The key work is eligible - dig deeper you'll find these are the "special conditions" (RIF, SEP, VERA that I discussed. I got all this from 2 FERS retirement classes and hardcopy materials these provided. Eligibility is not automatic, or assumed!
- (You may well be correct, that if you are MRA+, and have 30 years in, that this alone makes you eligible (I never checked since this won't apply for me).

But otherwise (if youl have under 30 yrs), you may not be necessarily eligible - and it isn't necessarily offered. In this scenario, both, special conditions (above) must apply, AND, it has to be arranged by your employer to recieve it. :sick:

If you can get above lined up - you can get it under MRA+10, etc. regardles of what's printed below (under "Retirement Supplemental Provisions"). Personally, I'm going to try to see if I can make "arrangements", (I will go for retirement/and supplement with my 20 years, but its doubtful, again since so many are retirement eligible in next 5 years, RIFs, SEPs & VERAs, are not likely in my organization. :suspicious:

[clester]

Supplement subject to earnings limitation - This is the one that will get me. Basically whatever your earn over about 12,000 after age 56 will reduce you supplement by .50 on the dollar. So, if you make 36,000 a year at another job you lose your supplement. But, your Social security will be higher at age 62. This is what I understand about it. I could be wrong. Anyone else have an opinion?

[budnipper1]

I do not claim to know how the Retirement Supplement applies to every individual's special situation. This is what I do know:

I am retiring on January 30, 2008, at age 60 with just over 24 years of federal service under FERS.
2-yrs, 9-months and 25-days of the 24 years are from military service, which will not be used to calculate the supplement.
That leaves just over 21 years which will be used to calculate the supplement.
They will divide 21 by 40 and multiply that factor times the amount I would be paid by Social Security at age 62.
I expect to receive about $700/mo from the date of my retirement until I start receiving regular social security payments after age 62.
If I worked and earned an income after retirement, the supplement would be reduced only during the second year, because it is based on the previous year's income. For me, this will not apply since I will not be working after retirement.

http://www.opm.gov/fers_election/html/srs.htm (http://www.opm.gov/fers_election/html/srs.htm)

http://www.govexec.com/dailyfed/0107/012607rp.htm (http://www.govexec.com/dailyfed/0107/012607rp.htm)

http://www.fedweek.com/search/view.php?table=rjones&id=130 (http://www.fedweek.com/search/view.php?table=rjones&id=130)

The FERS Special Retirement Supplement
The special annuity supplement is a benefit paid to certain FERS employees who retire before age 62 and are entitled to an immediate annuity. The SRS approximates the Social Security benefit earned while covered by FERS, and is designed to bridge the gap between retirement and age 62, when a retiree first becomes eligible for Social Security.
You are eligible for an immediate annuity and the SRS if you retire:
at your minimum retirement age (MRA) with at least 30 years of service;
at age 60 with at least 20 years of service;
Retirees who are not eligible for the SRS include the following:
disability retirees;
anyone retiring under the MRA+10 provision;
anyone who is eligible only for a deferred annuity; and
anyone retiring at age 62 or later.


Budnippper,
That's good, I shoulda thought to post actual forms.
Problem is, when you dig deeper, you'll need to look into the word/phrase "eligible."

[Special Retirement Supplement - "An additional amt paid by OPM to retirees eligible for full retirement benefits to supplement the total retirement until SS...age 62"]
The key work is eligible - dig deeper you'll find these are the "special conditions" (RIF, SEP, VERA that I discussed. I got all this from 2 FERS retirement classes and hardcopy materials these provided. Eligibility is not automatic, or assumed!
- (You may well be correct, that if you are MRA+, and have 30 years in, that this alone makes you eligible (I never checked since this won't apply for me).

But otherwise (if youl have under 30 yrs), you may not be necessarily eligible - and it isn't necessarily offered. In this scenario, both, special conditions (above) must apply, AND, it has to be arranged by your employer to recieve it. :sick:

If you can get above lined up - you can get it under MRA+10, etc. regardles of what's printed below (under "Retirement Supplemental Provisions"). Personally, I'm going to try to see if I can make "arrangements", (I will go for retirement/and supplement with my 20 years, but its doubtful, again since so many are retirement eligible in next 5 years, RIFs, SEPs & VERAs, are not likely in my organization. :suspicious:

[hessian]

Budnipper you are right, I think, if you're 60.
I will fall into the next category down 56with 20 years - I think they make it confusing on purpose. Attachment wouldn't work-so I'm just trying to paste this in:
Deferred vs. Postponed,June 29, 2007
Deferred Retirement Defined
A deferred retirement is payable to an employee who left federal service with at least five years of creditable civilian service and before being eligible for immediate retirement. The former employee must not have applied for a refund of Civil Service Retirement System or Federal Employees Retirement System contributions.
According to the Office of Personnel Management (https://www.opm.gov/fedregis/1997/62r67924.pdf), about 3,000 deferred applications are processed annually.
(Click here (https://www.opm.gov/forms/pdf_fill/opm1496A.pdf) for the application for a deferred CSRS annuity.)
Under FERS, you are eligible for a deferred basic retirement benefit at age 62 if you have more than five and less than 10 years of creditable civilian service. If you have more than 10 years of service, you can apply for a reduced benefit at your FERS minimum retirement age (55 to 57, depending on your year of birth). If you have at least 20 years, you're eligible at age 60 for an unreduced benefit. With 30 or more years, you would receive an unreduced benefit at your minimum retirement age. (Click here (http://www.opm.gov/forms/pdf_fill/RI92-19.pdf) for the application for a deferred FERS annuity, along with a publication providing detailed information.)
Postponed Retirement Defined
Postponed retirement is only available to employees under FERS. If you have at least 10 years of creditable service and already are at the minimum retirement age, you can get an immediate, but reduced, basic retirement benefit. These benefits are reduced by 5 percent for each year the individual is under age 62.
Employees may choose to postpone receiving this benefit in order to avoid some or all of the reduction. If the employee is eligible to maintain his or her federal health insurance and life insurance, these benefits will eligible for reinstatement upon receiving the postponed benefit. The application is the same as the application for a deferred FERS annuity.
TSP and Social Security
The terms "deferred" or "postponed" do not apply to Thrift Savings Plan benefits. Your contributions to the government's 401(k)-style investment plan are yours. If you have at least three years of creditable service, the entire TSP account belongs to you, including the agency automatic 1 percent matching contribution.
You can transfer your TSP funds to an Individual Retirement Account or keep the money in the TSP for future growth. If you leave before the year you turn 55, you may incur an early withdrawal penalty of 10 percent if you receive any of the money in your TSP account as a cash payment.
Remember, the money in TSP accounts has never been taxed, so any cash withdrawals will be subject to income tax in the year they are taken out. In most cases, employees can transfer the funds to their new employer's 401(k) plan without penalty or tax.
If you're in CSRS, you also should remember that since you have been exempt from paying Social Security taxes during your federal career, you may find that leaving government for the private sector will have an adverse effect on your future Social Security benefits. Social Security computes benefits on the highest 35 years of Social Security taxed wages. Having less than 35 years of Social Security covered wages will bring the average down by including years with no earnings.
Deferred CSRS Retirement: An Example
Suppose Georgia has 32 years of creditable service under CSRS. Her current salary is $80,000 and her high-three average salary is $76,000. If she resigns at age 52, she will be eligible for a deferred CSRS retirement benefit of $45,790 per year at age 62. CSRS benefits are paid for life with an annual cost of living adjustment.
The cost of this decision for Georgia is steep. If she waits until age 55 to retire, she will be entitled to an immediate retirement of about $50,350, based on 35 years of service. Receiving this benefit seven years longer would result in $352,450 more retirement income, not counting future cost of living adjustments or salary increases.
In addition, Georgia will not be entitled to reinstate her health insurance, life insurance or receive any credit for unused sick leave on her deferred retirement benefit. There would be no cost of living adjustments until after her benefit begins at age 62 and the high-three used in the computation is the same high-three as when she left at age 52.
If Georgia begins a second career in the private sector, she will have a 32-year "hole" in her Social Security record for the years she worked under CSRS where she was exempt from Social Security taxes. If she applies for a deferred CSRS retirement benefit, her Social Security benefit will be computed under a modified formula due to the Windfall Elimination Provision.
Deferred FERS Retirement: An Example
Suppose Bryan was born in 1955, has 25 years of service under FERS and is resigning at age 52. His salary is $80,000 and his high-three average is $76,000. He will be eligible for a deferred annuity at age 60 that will be worth 25 percent of $76,000, or $19,000 per year (payable for life with an annual cost of living adjustment). If he chooses to apply when he reaches his minimum retirement age (56, in his case) the benefit would be reduced by 30 percent (5 percent for each year under age 62).
Let's assume Bryan has $300,000 invested in his TSP. He can leave it there or transfer it to a new employer's 401(k) plan. He will continue to pay into Social Security at his next job. The cost of leaving federal service early for Bryan is the consideration that his next employer may not offer retiree health insurance or a defined benefit pension.
Postponed FERS Retirement: An Example
Suppose Anne has 25 years of service under FERS and is resigning at age 56. Her salary is $80,000 and her high-three average is $76,000. She is eligible for an immediate annuity worth 25 percent of $76,000, or $19,000 per year, but taking this benefit at age 56 would cause it to be reduced to $13,300. If she postpones receiving the benefit until age 60, she would receive the benefit unreduced at $19,000 per year (payable for life with an annual cost of living adjustment that begins at age 62). When she applies for the postponed benefit, she may elect to reinstate her health and life insurance benefits, as long as she was covered during the last five years of her federal service.
Anne may leave her TSP investments in the plan or begin an immediate withdrawal. There is no early withdrawal penalty if she is at least 55 the year she leaves federal service.
Things to Consider
Before deciding to leave your federal career early, consider the following:
· Since 1978, the number of defined-benefit plans plummeted from 128,041, covering 41 percent of private-sector workers, to only 26,000 today, according to the Employee Benefit Research Institute. The Bureau of Labor Statistics reports that just 21 percent of workers in the private sector have defined benefit pensions.
· Courtney Coile, an assistant professor of economics at Wellesley College and a research associate of the Center for Retirement Research at Boston College, says the number of companies with 200 or more workers that offer retiree health insurance fell from 66 percent in 1988 to 33 percent in 2005.
· If you leave federal service early, you may have to save more in your employer sponsored savings plan to make up for the fact that many employers do not offer a basic pension benefit. Did you know that if you want $200,000 to last 35 years, you can only withdraw $767 per month (assuming you get a 6 percent rate of return, and allowing for a 3 percent inflation adjustment). To compute your own scenario, try using this calculator (http://www.statefarm.com/learning/calc/retcalc.asp).
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc. (http://www.nitpinc.com/),

[clester]

ATC (like me) is eligible for srs. I will be 49 with 25 years fers, so 25/40 times my age 62 social security amount is what I will get. When I turn 56 any earned income over 12,000 counts against me for the supplement (earnings limitation provision) until I reach age 62 and social security kicks in. I think?

Anyone know the rules for the earnings limitation?

[pogo]

ATC (like me) is eligible for srs. I will be 49 with 25 years fers, so 25/40 times my age 62 social security amount is what I will get. When I turn 56 any earned income over 12,000 counts against me for the supplement (earnings limitation provision) until I reach age 62 and social security kicks in. I think?

Anyone know the rules for the earnings limitation?

don't forget you will not receive-----cost of living raise from the age of 56 til 62. me i don't care about the cost of living raise

[Show-me]

http://www.opm.gov/asd/hod/pdf/C051.pdf

Page 4 of the manual. The way I read it you are eligible if you meet the MRA and 30 criteria.

[camper65]

Question!
Will be drawing FULL SS in March. (65yrs/10 months) and intend to continue to work for a while. How much can i bury in TSP and IRA! (Roth)? What is my max?

[Show-me]

IRA cut off is at age 70 1/2 years of age. So I believe you can sink $6,000 in the Roth until then. As long as you are employed by the Government you can contribute up to the IRS maximum in TSP. Once you retire, TSP is no more because you have to be on the payroll to be eligible to contribute.

http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm

[Show-me]

IRS limits for 2008 are $15,500 plus $5,000 catch-up contributions.

[camper65]

IRA cut off is at age 70 1/2 years of age. So I believe you can sink $6,000 in the Roth until then. As long as you are employed by the Government you can contribute up to the IRS maximum in TSP. Once you retire, TSP is no more because you have to be on the payroll to be eligible to contribute.

http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm

By saying IRS max, does that include "Catch-up contribution? Do you know what that is for "08" ?

Opps!!! THANKS!!!

[camper65]

WARNIIIIIIINHGUGGG" CATS ON KEY BOAEDljqwhwpe27-29runc [XDS

[Show-me]

WARNIIIIIIINHGUGGG" CATS ON KEY BOAEDljqwhwpe27-29runc [XDS

I got that problem too, times four! :D

[Show-me]

One thing I am not 100% sure of. Does the $6,000 in the Roth go against the $15,500 plus $5,000 catch-up? I would assume yes but we need someone to verify it for me because the Sparkling Wine is ah flowing already.

[ChemEng]

One thing I am not 100% sure of. Does the $6,000 in the Roth go against the $15,500 plus $5,000 catch-up? I would assume yes but we need someone to verify it for me because the Sparkling Wine is ah flowing already.
Nope.

[camper65]

I'll be going to personnel Wed to make changes, in the meantime an waiting on FedWeek books, I would think they will have the answers.

[Show-me]

See, the great thing about this place is the checks and balances. Thanks Chem and Happy New Year to all.

camper65,

Because you are a bit older, you have a IRS limit $15,500 plus $5,000 catch-up and a Roth limit of $6,000 for 2008. A total of $26,500. Happy New Year!

[camper65]

Thanks again Show-me/Chem. Have some bubblie for me!

Happy New Year To ALLLLLLLLLLLL!!!!!!!

[ChemEng]

Because you are a bit older, you have a IRS limit $15,500 plus $5,000 catch-up and a Roth limit of $6,000 for 2008. A total of $26,500. Happy New Year!

If you have an HDHP and HSA, you can also contribute an additional $5650 plus $800 catchup.

[ripper]

Thanks for all the feedback, folks. That's what makes this a great website.
I'd just like to clarify a couple of things regarding my situation:
1. I plan on retiring at age 59 with 30 years of service. I've held a part-time (non-gov) job the last 10 years that pays about $15k/yr. My understanding now is that my ss earnings from my part-time job will not be included in the calculation of my supplement. Is that correct?
2. Also regarding my p/t job: I plan on continuing to work at that position after my retirement from the Fed...possibly increasing my hours there. But my understanding now is that I will be penalized on earnings over $12k/yr. Could someone clarify this for me?
3. Finally...about 25% of my annual income from the gov comes from overtime. Will my OT be figured into my supplement? I ask this because OT is generally disregarded in other Fed retirement calculations.

[pogo]

Thanks for all the feedback, folks. That's what makes this a great website.
I'd just like to clarify a couple of things regarding my situation:
1. I plan on retiring at age 59 with 30 years of service. I've held a part-time (non-gov) job the last 10 years that pays about $15k/yr. My understanding now is that my ss earnings from my part-time job will not be included in the calculation of my supplement. Is that correct?
2. Also regarding my p/t job: I plan on continuing to work at that position after my retirement from the Fed...possibly increasing my hours there. But my understanding now is that I will be penalized on earnings over $12k/yr. Could someone clarify this for me?
3. Finally...about 25% of my annual income from the gov comes from overtime. Will my OT be figured into my supplement? I ask this because OT is generally disregarded in other Fed retirement calculations. ( question 1) yes (question 2)yes you will penalized(question3)whatever is taken out of your paycheck for ss is included in your calculation for your supplement---that is my understanding(what ever you made or should i say what ever they deducted out of your paycheck while you work for the goverment.

[ripper]

Thanks, pogo.

[kistari]

Okay, I'm retiring next month on FERS. According to our retirement folks, I will get my FERS annuity plus the special supplement. The supplement is calculated by my number of years under FERS (21) divided by 40 times my expected SS benefits. Or, for me it is 21/40 x $1380.

There is a earnings limitation to keeping this supplement. It's the same as the social security earnings limitation for the year.

[Texarkandy]

ATC (like me) is eligible for srs. I will be 49 with 25 years fers, so 25/40 times my age 62 social security amount is what I will get. When I turn 56 any earned income over 12,000 counts against me for the supplement (earnings limitation provision) until I reach age 62 and social security kicks in. I think?

Anyone know the rules for the earnings limitation?

Hi Clester - I'm in the same boat as you 49 y/o with 25 years FERS
(We need a separate forum group for us LE/ATC/FF folks)

Yes, you are correct on the SRS from what I have learned:
25 years gets you 62% of your projected age 62 SS benefit- No Cola on the SRS - Earnings Limitation doesn't kick in till age 56 -The SRS ends at 62 & you can go on Social Security then, or wait a few years without either for a higher S/S benefit.

[sega]

Do the years I purchased back for Military time count towards FERS years? Currently I have 30 years with my Military time. 22 years of active Fers time. So what will my FERS Annuity Supplement be based on, 30 or 22?

[OBGibby]

Do the years I purchased back for Military time count towards FERS years? Currently I have 30 years with my Military time. 22 years of active Fers time. So what will my FERS Annuity Supplement be based on, 30 or 22?

It's my understanding the Supplement only counts your civilian time, not the military time you bought back. When you start collecting your regular Social Security then your military time is calculated in.

[Rodge8713]

Hey There,
New to this Forum, as you all can tell, but NOT to how FERS is so inferior to CSRS.
If I hear ONE MORE CSRS Employee/Retiree gripe about "reduced SS Benefit" because of the double-dipping provision, I'm gonna go POSTAL! (I am a nearly retired USPS Employee after 31 years FERS with 6 military)

The following is a comparison of CSRS/FERS, IF I UNDERSTAND it correctly. I only get a sour taste in my mouth when a CSRS employee whines. I guess I am doing this as much to see it for myself and to be open for any corrections I may need in my thinking in regards to this. And "going POSTAL" is merely a figure of speech for me, since I've BEEN Postal for a lot of years.

CSRS retirees get CSRS at 2% of the years they served, PLUS they get Social Security if they have the number of necessary SS quarters! Example: 30 years CSRS (60%) x Base pay (Ex:$50000)=$30000/12=$2500/mo
SSA Benefit (Ex: $800/mo based on Pre-FERS employment qualifying quarters) / 2 = $400/mo
For a total of $2900/mo

FERS gets 1% for the same years they served, PLUS a severely reduced SS Supplement!
Example: 30 years FERS (30%) x Base Pay (Ex: $50000)=$15000/12=$1250/mo
SS-Sup: ((Ex:30 yrs FERS-6 military= 24) / 40=0.6) x SSA benefit at 62 (Ex:$1500/mo)= $900/mo
For the fine total of $2150/mo.

Granted, TSP matching would have allowed me to get more per month to go along with this, but CSRS employees/retirees didn't have to contribute the 5% from their families' tables to get it!


Just my two cents.

Regardless, I am looking FORWARD to a GREAT retirement MANY people out there won't get a CHANCE to have!!!

FERS, messed up but still great!!!

I read somewhere that the SS-Sup is further reduced by the number of years from retirement til you actually reach 62yo. Is there any truth to this?

For example: the original FERS Service years above was calculated as 30-6=24, divided by 40 = 0.6 to use in calculating the SS-Sup of $900/mo. If what I read is true, and I haven't seen it discussed here, and the person in the example had five (5) years until 62, it would calculate out to be 30 - 6 - 5 = 19 / 40 = 0.475, then 0.475 x 1500 = $712.5/mo would be the result instead of the $900.

Is there any truth to this at all? It IS possible that I mis-understood what I read!

[Boghie]

Rodge8713,

In your example all you need is a total contribution of $3,700/year (flat, no increase for inflation) to match the CSRS benefit with FERS and TSP. Because of the match and the tax advantages of a 401(k) the total out of pocket will be $1,461/year. That maps out to an after-tax contribution of $56 per pay period.

That is all it will take for a 35 year old, 30 years of investing, an 8% return (easy), and 3% inflation to create enough money to match the CSRS benefit.

Now, if you invest more than 3.7% of your gross salary you will do far better than CSRS. For example, a 5% contribution (never increasing and your pay never increasing but with 3% inflation) would give you an additional $9,000/year to spend. So, no, I don't think having a pension that can be jiggered by future politicians is a better solution than one in my lock box. My TSP portion of my retirement will dwarf my FERS pension and my Social Security.

[nnuut]

Welcome to the Message Board Rodge8713. We are here to maximize our TSP and hopefully live better after retirement. Your US government changed to the FERS to save money and put more folks on the Social Security rolls because it was and is going broke because our government spends it every year and doesn't pay the loans it makes back to the fund. Don't blame the CSRS folks, blame your elected politicians.
We in and retired that are CSRS don't get the 5% matching contributions to the TSP, my 18 years of paying Social Security should have given me about $775 a month but after a 60% reduction I only get $325 now $110 Medicare comes out of that. When I signed on to work civil service part of the deal was that if you qualified for SSA you could draw it and CSRS retirement with no reduction, they broke the contract and didn't give a damn what we thought about it. When I started working for the government in Jan 1977 Big Business like GM Ford, GE etc were giving their employees much better retirement benefits than Civil Service, then the economy started falling and those benefits left with all of our manufacturing base after NAFTA and later GATT treatys were passed due the inability of our government to add and subtract. So then came FERS what a deal, YOU WILL BECOME A MILLIONAIRE. They tried to get us to switch to FERS but the ones of us that could do arithmetic didn't fall for it. Over my 37.5 year career I donated a little more than $130,000 to the retirement fund, how much do FERS contribute? Figure that amount invested for that time period and how much would it be?
Take it easy on us old CSRS folks we didn't cheat or lie we just did our jobs.
Oh, we have a bunch of postal workers here, great people, but where do you get off paying so little for your FEHB plans, what a deal, do you know you will have to pay full price after retirement?
By the way at 30 years it's 56.25% not 60% for CSRS:cool:
Best of luck with your TSP, if I can help you with anything just ask.
Norman:D

[Boghie]

Rodge8713, Nnuut nails it.

[driz]

Welcome to the Message Board Rodge8713. We are here to maximize our TSP and hopefully live better after retirement. Your US government changed to the FERS to save money and put more folks on the Social Security rolls because it was and is going broke because our government spends it every year and doesn't pay the loans it makes back to the fund. Don't blame the CSRS folks, blame your elected politicians.
We in and retired that are CSRS don't get the 5% matching contributions to the TSP, my 18 years of paying Social Security should have given me about $775 a month but after a 60% reduction I only get $325 now $110 Medicare comes out of that. When I signed on to work civil service part of the deal was that if you qualified for SSA you could draw it and CSRS retirement with no reduction, they broke the contract and didn't give a damn what we thought about it. When I started working for the government in Jan 1977 Big Business like GM Ford, GE etc were giving their employees much better retirement benefits than Civil Service, then the economy started falling and those benefits left with all of our manufacturing base after NAFTA and later GATT treatys were passed due the inability of our government to add and subtract. So then came FERS what a deal, YOU WILL BECOME A MILLIONAIRE. They tried to get us to switch to FERS but the ones of us that could do arithmetic didn't fall for it. Over my 37.5 year career I donated a little more than $130,000 to the retirement fund, how much do FERS contribute? Figure that amount invested for that time period and how much would it be?
Take it easy on us old CSRS folks we didn't cheat or lie we just did our jobs.
Oh, we have a bunch of postal workers here, great people, but where do you get off paying so little for your FEHB plans, what a deal, do you know you will have to pay full price after retirement?
By the way at 30 years it's 56.25% not 60% for CSRS:cool:
Best of luck with your TSP, if I can help you with anything just ask.
Norman:D

You summed it up pretty well nnut . One other thing about making that decision back then was an almost absolute lack if comparative information. I'm sure it was out there somewhere but if you didn't have a top notch or as many of us a real personnel office staffed by someone who really knew what they were doing the decision was almost impossible to calculate. Of course you could call OPM like I did and sit on hold for 20 + minutes then get nothing but gibberish from someone with less on the ball upstairs than my cat. At least today you have the online options to find out much of what is going on.
One thing rings true today as much as it did then though. "If you have something and these talking heads want you to switch to something else for a better deal you are almost surely better off staying put":mad:. That's about the long and short of it really and you can trust those clowns about as far as you can toss them. Essentially you are on your own so stash as much cash on your own as you can possibly manage; then stash a bit more and manage it wisely.

[nnuut]

You summed it up pretty well nnut . One other thing about making that decision back then was an almost absolute lack if comparative information. I'm sure it was out there somewhere but if you didn't have a top notch or as many of us a real personnel office staffed by someone who really knew what they were doing the decision was almost impossible to calculate. Of course you could call OPM like I did and sit on hold for 20 + minutes then get nothing but gibberish from someone with less on the ball upstairs than my cat. At least today you have the online options to find out much of what is going on.
One thing rings true today as much as it did then though. "If you have something and these talking heads want you to switch to something else for a better deal you are almost surely better off staying put":mad:. That's about the long and short of it really and you can trust those clowns about as far as you can toss them. Essentially you are on your own so stash as much cash on your own as you can possibly manage; then stash a bit more and manage it wisely.
I was a second level supervisor at that time, and was given the responsibility to convince my folks to switch to FERS. I had to present FERS in a positive way , which I did, but after the talking points I gave everyone my opinion on the subject and told them the truth as I saw it. I re-figured it at least a 100 times and thought it was a really bad idea to switch unless you had about 30 years to build your TSP. If you donate the max you could do really well, but I had no idea that in 2008 we were going to fall through our A** and interest rates on savings and 401Ks would fall to record levels, that hasn't changed. Contribute as much as you can, while you can.

[Scout333]

"If you have something and these talking heads want you to switch to something else for a better deal you are almost surely better off staying put":mad:. That's about the long and short of it really and you can trust those clowns about as far as you can toss them. Essentially you are on your own so stash as much cash on your own as you can possibly manage; then stash a bit more and manage it wisely.

Not just government benefits, my brother works for a large pharma co and they changed their pension/stock option plan and offered them the "opportunity" to go with the new plan or stay with the current plan. I asked him a few questions, including -why would they change to a new plan? The only rational answer is they believe it will cost the company less. Ergo, the employee gets less. Simple! He stuck with their current plan and is verry happy he did. When someone offers you a gift always look at the transaction from their perspective and look at what they have to gain.

[Frixxxx]

I read somewhere that the SS-Sup is further reduced by the number of years from retirement til you actually reach 62yo. Is there any truth to this?

For example: the original FERS Service years above was calculated as 30-6=24, divided by 40 = 0.6 to use in calculating the SS-Sup of $900/mo. If what I read is true, and I haven't seen it discussed here, and the person in the example had five (5) years until 62, it would calculate out to be 30 - 6 - 5 = 19 / 40 = 0.475, then 0.475 x 1500 = $712.5/mo would be the result instead of the $900.

Is there any truth to this at all? It IS possible that I mis-understood what I read!

Remember that the way Civil Service Employment is "considered" you graduate college at 22. You work 40 years until you are 62. So, if you are not 62 when you retire, there are reductions in your SS Supplement. Read on the OPM website (http://www.opm.gov/retire/pre/fers/annuitysupp.asp) the conditions of your retirement and the calculations. I believe you did the math correctly though.

[clester]

Remember that the way Civil Service Employment is "considered" you graduate college at 22. You work 40 years until you are 62. So, if you are not 62 when you retire, there are reductions in your SS Supplement. Read on the OPM website (http://www.opm.gov/retire/pre/fers/annuitysupp.asp) the conditions of your retirement and the calculations. I believe you did the math correctly though.
You take your years of fers service and divide by 40. That is the factor to multiply by your age 62 amount from your SS statement. That amount is fixed(no cola) until you turn 62 and are on the real SS.

I am receiving the payments now. I have 10 more years til I get a cola.

[nnuut]

Just work until you're 62, that way no supplement, no cut. I worked until I was 65!

[Frixxxx]

You take your years of fers service and divide by 40. That is the factor to multiply by your age 62 amount from your SS statement. That amount is fixed(no cola) until you turn 62 and are on the real SS.

I am receiving the payments now. I have 10 more years til I get a cola.
At least you're getting the supplement....Probably be gone by the time I want to retire! You must have been a Federal Cop to retire so soon. Are you earning another income yet or are your feet up on the ottoman?


Just work until you're 62, that way no supplement, no cut. I worked until I was 65!
My wife is 6 years older than me...So I'll go at 57.

[clester]

At least you're getting the supplement....Probably be gone by the time I want to retire! You must have been a Federal Cop to retire so soon. Are you earning another income yet or are your feet up on the ottoman?


My wife is 6 years older than me...So I'll go at 57.
I was ATC. I have been retired 2.5 years and haven't worked yet. I am going to college though. I was going to be a high school math teacher but all the teacher bashing and high workload ( yes really) and the fact that would have to have 6 evaluations every year turned me off. Now I'm studying physics and computer science part time. I love going back to school. I wish I liked it the first time.

My wife is a teacher and will have to work until 65 I think. I tell her it's payback for all those summers I had to work and she was off. :)

[nnuut]

At least you're getting the supplement....Probably be gone by the time I want to retire! You must have been a Federal Cop to retire so soon. Are you earning another income yet or are your feet up on the ottoman?


My wife is 6 years older than me...So I'll go at 57.
Ha! My wife is almost 6 years younger than me.21437

[Rustynutt]

I was ATC. I have been retired 2.5 years and haven't worked yet. I am going to college though. I was going to be a high school math teacher but all the teacher bashing and high workload ( yes really) and the fact that would have to have 6 evaluations every year turned me off. Now I'm studying physics and computer science part time. I love going back to school. I wish I liked it the first time.

My wife is a teacher and will have to work until 65 I think. I tell her it's payback for all those summers I had to work and she was off. :)


Sounds like a good life.
My wife just turned 49, err, 29 today! :)

I'm 56 1/2 and started DOD FERS January of 1984. I don't think there has been a day gone by not cussing the HR rep that told me December of 1983 to just go home and check in after the holidays. Working side by side with CSRS employees all those years have been tough, but as of yesterday it's pretty much water under the bridge.

Very long story short, yesterday at 12:00 pm got a phone call from my division head to come see her. As I've been on detail assignment the past two years, wondered on the way to her office what I could have "done now". She had me close the door to her office, then with a very serious face handed me a letter. Then she cracked a big smile watching me grin ear to ear reading a survey letter for my acceptance of a VERA with VISP! The catch was the letter had to be returned to HR by 16:00 the same day. I've been crunching the numbers for over two years now, the choice was a no brainer!

Without any hitches, my final date will be January 31st, 2013.
I am speechless and elated. My mind is drifting, but not to day to day negative or worrisome problems, but this engulfing feeling of freedom at last.

During a 30 year career, many times emotions can swing wildly. For all the down sizing, hiring freezes, topped out for 10 years, COLA freezes and more, will have to admit to being shipped out on a good note.

FERS pensions for the average person are not likely enough in themselves to alone provide support retiring at an age which when reaching your MRA and service time allow. The addition of the FERS supplement, no matter how small it may seem, provides just enough incentive to walk out the door at an early age, look at the world and say, what's next in the saga!

PS, after restoring in the neighborhood of 30 vintage motocross machines the next two years, wish to return to college and earn a degree in Astrophysics. Seems about as useful as anything else :)

[Frixxxx]

Congratulations Rusty!

So glad you can take the news and make it good. Thank you for your years of service and well deserved. Good Luck on that degree....It may be the hardest (most rewarding) thing you ever do!

Let us know how the process goes for future retirees!!!

[nnuut]

Sounds good Rusty, I know I'm enjoying my retirement and hope you do to. There is more to do around the house than you think.
I missed the VERA with VISP by one week, they transferred our group to another section and a week later our old section offered it to all who qualified, and I did what a bummer!

[Rustynutt]

Frixxxx and nnuut, thanks for the well wishes.

Last October there was a limited window and spots for a VERA. There was rumor of being considered, in the end that's all it ended up being. As rumors go, my advice is to not get to emotional until you have the survey in hand, that is pretty much the tell tail of action on ones part. The other is, with so much unknown going on in Federal service, the opportunity can sneak up on a moments notice. If not just for good measure in itself, good idea to keep a financial spread sheet to play with some years before considering retirement and be prepared if opportunity knocks!

During the detail assignment, most duties and responsibilities from the assigned position were transferred to a new hire controls engineer (young kids now!). The detail assignment was just that, screwing light blubs into old missile systems. Aside from a little this and that left, will focus on a time line of the process to post here for others to develop a baseline to plan on. I myself have benefited from members post here time and time again.

Cheers!

[jimijr]

I just received my final Special Supplement payment on Nov 1st. Now in December I go to Social Security which will net me about $500 more per month. Trouble is, OPM pays everybody on the first of the month but SSA pays me on the 4th Wedensday of the month, which they go by your number. So I have one more week to wait. Meanwhile I was notified that my award will increase a little in January. Thanks for nothing!

FERS vs CSRS -- I had a FERS-factor of .265, or 26.5% of high-3. Add my soon-to-come SS award expressed as a fraction of high-3 and it sums to about 47%. Under CSRS I would have had 27 years of service (greater S/L credit). I believe that would convert to around the same number 45-50%.

So for me the pension is about the same except I meanwhile put away a nice bundle in the TSP. I withdraw about another 20% (high-3) each year. With this addition I am doing as well or better than before I retired because I was putting $22000 a year into the TSP and was paying $7000 a year in FICA as well.

I'll take my FERS over CSRS any day.

[nnuut]

Yeah SSA notified me that I am going to get a 1.7% raise in my measly SSA check effective in January. That would be a whopping $6.00, BUT my Medicare went up $5.00 leaving me with a $1.00 gain WWWAAAHHOOOOOOOO!

[eccougar]

I get a $13.00 net gain on the SS.

[Rustynutt]

Ha! My wife is almost 6 years younger than me.21437

Mine is 7 1/2, she worked for a year since immigrating, now she kind of likes the housekeeping job. Since I have experience with that position being a single parent since the son was 3, and through college, I can appreciate the position :) Still, hoping she can pick up a few hundred a month when I retire this month. We need lots of Diesel!