Class of 2020
INTRODUCTION
Wow. What a year. I was going to give a recap, but seriously, does anyone want me to go over all 19 months of 2020?
Instead, let me just provide an introduction to any readers who may be new to this annual paper. Each year, I compile responses from those that retired during the year. They are the Class of 2020— The Retiring Class of 2020. And their responses are below. It is always well-received by my subscribers. Probably because these are people that have just completed what many of you are expecting to go through in the next few years (or maybe even months!). So it provides some perspective that may help with decision-making.
The questions are mine. The responses are theirs. Names and identifiers are removed. But otherwise, I do not alter the answers. They are speaking directly to you in their words.
Is it long? Very. It’s not meant to be read at a stoplight. (Don’t act like you don’t check your phone at lights!) But it is very good information, so please take the time. Come back and read it over days or even weeks. It really is good insight.
Hopefully it helps. Enjoy.
Did you retire at first eligibility or later? What were the reasons for leaving when you did?
I was eligible at 47 but waited until I turned 50 to have full penalty-free access to my TSP (although I haven’t had to tap into the funds). I then retired to pursue another career. Also, I didn’t want to miss out on the social security supplement as it won’t be subject to the earnings test until I’m almost 57.
Yes, I left at age 60 with 29 years for eligibility. I’d been planning retirement since starting with the Feds and knew I was going to retire at age 60. Having some stress related minor issues only confirmed it. By the way, my weight is down and so is the blood pressure and stress related headaches.
As a LEO with ICE, I was eligible in August 2018. Vice retiring, I took advantage of an opportunity and promoted to GS15 in October 2018. I held that position until I retired on May 31, 2020 at the age of 53 and 8 months. Dan Jamison’s FERSGUIDE and your writings, put everything in perspective and I didn’t see any reason to work until my maximum age. In my leadership positions, my nights and weekends were often interrupted by a multitude of issues. After running numbers (many formats and dates) and hitting the 30-year mark, I hung up my hat with total service credit of 30 years 3 months including 24 Federal, six military and 3 months sick time.
I am retiring at the end of calendar 2020, 3 months before I turn 57 (03/2021). I do not plan on working after retirement from Federal service and will hopefully travel to see this great country!
a. Retired a year after eligibility (came in at 35 & retired at 56).
b. Loved the job, mission & people and couldn’t have asked for a better way to end my career, but ultimately knew that I wanted to enjoy my retirement while I was still healthy (Dad passed at 57 & my Mom at 62). It also helped that I followed yours and Dan’s advice for almost 2 decades preparing for retirement.
I retired 5 months after I was eligible. I decided to wait until the spring to retire. After reading your articles and Dan Jamison's newsletters I went over my numbers and decided to go ahead and retire. I wasn't enjoying work as much as I used to.
I retired, over a year ago, from Customs and Border Protection at first eligibility because I was financially ready to do so. I knew my pension/annuity with the FERS supplement would cover all of the reoccurring monthly bills without the need to withdraw from my TSP.
I was eligible to retire in Aug 2018, however, I will be retiring Dec 31, 2020. My decision was based on that I waited until my TSP hit a certain number ($800k). I felt this number gave me the financial freedom and the flexibility not to work after retirement if I chose to do so. If I didn’t hit this number this year, I could have pushed back another year or two as I am only 53 at this point.
I retired 5 months after my eligibility. Primary reasons: stress of the job in cybersecurity management, at 35 years of service a few more years of service would not affect my FERS Annuity to a degree that impacted me financially enough to stay in the job.
Yes, I retired within days of becoming eligible under 1811 status. There were a myriad of reasons that I left when I did, to include: the cost/benefit (very little annual increase in pension for any additional years I might stay versus the 24/7 nature of the job); allowing myself the chance to maximize the SRS (supplement) during the 50-57 years of age timeframe without any income test; and the growing anti-LE sentiment and unreasonable additional requirements placed upon us to “play nice” with the public who increasingly treated us with disrespect, distrust and blatant refusals to cooperate.
I retired after 26 years of federal service as a LEO, which was one year after I was eligible. My job was becoming less rewarding and more frustrating. After I calculated my retirement income and expenses, I felt comfortable that I could afford to retire so I did! I always thought I would work longer and not retire FROM the job, but rather TO something. In the end though, I retired FROM my frustrations.
While my job was not as dangerous as many other LEOs, I had enough close calls to be so grateful that I was able to retire with my physical and mental health intact; I felt no compelling reason to tempt fate and continue working. I always wanted to retire while I could still do every aspect of the job as well as when I started (or hopefully better!). I witnessed others whose health had deteriorated in their final years and I very much wanted to avoid a similar experience. I feel very blessed that I was able to retire on my own terms and not because I had to.
I was one of those nerds who thought about and planned for retirement for many years before I actually pulled the plug. I made the final decision to retire once I did the math and I was confident that I could meet our expenses in retirement with enough cushion to make me comfortable that I didn't NEED to work after I retired if I didn't want to.
I retired at age 56 because I was forced out. I was an air traffic controller and they force you to retire at that age. I didn’t want to leave and would have worked another 5 years at least, if I could. I have gone on to get another ATC training job with a private contractor as I still want to work. I started that job 1 week after my retirement and still really enjoy working in the field and mentoring the younger generation of controllers.
I am retiring on October 31, 2020, which is slightly more than three years after first eligibility. I was originally planning to retire in December of 2020, but received PCS orders transferring me from Atlanta to Washington, DC. I moved up my retirement date and will be pursuing a less stressful part-time career as a private contractor.
What was the exact financial reason (and moment) you decided to retire, if you can point to one thing?
I had the opportunity to work for another law enforcement agency. The timing was perfect and the stars were in alignment (I left at the end of 2019). I knew the opportunities were few and far between and I could finally “double dip.”
At my new job, I will be vested in five years and eligible to collect a second pension two years before I would have been mandatory in my old job. It just made sense. In addition, my take home pay is higher because they don’t withhold social security and I don’t need their medical plan. So basically, with the FERS pension and the social security supplement, I’m making more money than I did before and I don’t have to touch my TSP.
I decided to retire the day I started working for the Feds. You might ask at this point if I enjoyed my job. YES, I did! But while I gave my all at work, I had to remind myself I should work to live, rather than live to work.
After running the numbers and clearing some debt, I realized life wouldn’t change much economically after retirement. I expect my 1st full annuity/FERS Supplemental on November 1, 2020.
No one exact moment, but many moments over the years of watching my TSP grow (and decline) and staying the course. Also recognizing our financial goals were attainable if we remained disciplined.
I knew, from retirement estimators, that my monthly pension/annuity would pay our reoccurring monthly bills. I eliminated all debt prior to retiring. I still have to pay the yearly home insurance and property taxes but have planned for that. I expect to remain in our home through retirement or at least until I need to move into assisted living or a nursing home.
I will say that my spouse is still working full time and will be for the next 10 years. However, my spouse’s income goes directly into savings for us. We have pretty much lived on one salary and saved on the other our whole marriage. I feel very fortunate that we have been able to do that.
Again, that my TSP hit the $800k mark. There are other non-financial reasons to go this year too. I feel the wind changing directions in my agency and I’m too old school to change with them. Best to go out on a high note, loving the job, vice feel like I don’t want to go to work in the morning.
When I realized that more years of service past 35 were not going to gain me more than a few hundred dollars in annuity income, which I could easily make up for by working as a contractor consultant until the age of 62 and putting into savings. This was a couple months before my eligibility date.
I always leaned toward retiring upon eligibility, but the government shutdown of 2018 solidified it for me. Going all those weeks without pay, and watching the impact it had on co-workers who had limited (if any) emergency cash was too much to bear. Seeing how the politicians (both sides equally) were more concerned about their own vacations (I remember one who went to Hawaii for 10 days!) that holiday season while our AL was canceled and I sat at home alone while my spouse continued with our travel plans to visit family, made me promise to myself that I would never be placed in that position again. Given that 2020 is another election year (shaping up to be as dramatic as expected) I fully expected back at the beginning of the year that another shutdown was likely at the end of 2020 (and still believe that). Regardless of who wins the election, the other side is not going to be in any rush to come to agreement on a budget until 2021 and I will not be at all surprised if there’s another shutdown when the current CR expires in early December.
When they told me I cannot work after the end of the month that I turn 56 years old. I knew my whole career that the day was coming but I’m not sure I really realized that a 35 year career would go by so quickly.
A former co-worker of mine, who was preparing to retire in late 2018, sent me your “I Can’t Afford to Retire!” paper shortly before he left, and it really resonated with me. Shortly thereafter, my TSP balance finally crossed the $1 million mark, which I always looked at as a milestone to reach before retiring.
Between the TSP account ($810K+), other retirement assets plus the pension, I see no reason to continue working and it’s time to start living, especially after this dumpster-fire of a year 2020 has been! Too many people appear to be chasing the bucks (and they are certainly attractive) after departure from Federal service but I think we have sacrificed enough during normal working years that extending it seems too much.
Specifically regarding the retirement process, what would you have done differently? (Retire earlier/later, save more, learn more, file earlier, talk to more people, get more estimates, etc.)
I would have maxed out my TSP from day one with the most aggressive investment options possible. Other than that, I’m happy with the way things worked out.
Absolutely nothing would be done differently. I learned as much as I could throughout my career so had a good handle on the process.
I should have saved more and avoided the two TSP loans I took in the early 2000’s. Also, I should have opened some private investment accounts. Hindsight is 20/20 and while I missed those opportunities, I was okay because I managed to buy some rental properties along the way. While I don’t make a boatload of money on them and two of the three still have mortgages, they are part of my overall retirement plan. I’m toying with selling one and use the proceeds to pay off my house. This will free up $2193.74 per month and then I’ll be way ahead over the time I was actually working.
As many retirees before me have mentioned, you can never start saving/contributing the max too early. I was also very fortunate to have been exposed to both you and Dan early on and the wealth of information you provided. In that regard, it motivated me to do more to increase my own personal knowledge of preparing for the life after. So, build your own base of knowledge would be something I could’ve done much earlier.
I would have maxed out my TSP sooner. I waited until I was a GS13 before I started maxing out my TSP.
I feel like I did everything I could have. I highly recommend attending at least one agency-sponsored retirement seminar before deciding to file your paperwork. I attended four over the span of 15 years, two of which were in the last five years before I retired. Remember the saying, “It is never too early to start planning for retirement.” In fact, planning is essential.
I have subscribed to Dan Jamison’s FERS Guide and monthly newsletter for several years and regularly read Chris Barfield’s monthly newsletter and papers on various retirement issues and finances. Both are excellent sources for retirement preparation.
I’ve had a wonderful career. Active duty Army CID, Coast Guard Investigative Service, a stint with the Air Marshal’s, SSA-OIG… all have been a blast. I did my best at each agency and when I retire at the end of the year, I can honestly say it was a PRIVLEDGE and HONOR to be a federal agent.
Differently? I would have saved more money in the TSP for a longer period of time. For many, many years, I only put 10% in, no matter what I earned. That gave me the matching funds, but did not max out my potential for most of my career.
Our agency had some great online retirement training, and the FERS Guide and website from Dan Jamison was invaluable. With all this information and the tools for calculating annuity and length of TSP income (how long the dollars in my TSP would last), I felt I was prepared to make the decision to retire. I definitely would not have pushed my retirement date out (though I thought about it due to COVID). For what I would have done differently – I think I made a great decision and had great input and resources.
I feel pretty satisfied with the process I chose to take, but I can tell you that there have been significant issues and delays I have experienced (more about that below). I am glad that I retired when I did (at 50) because I have had too many Agent friends before me that held on until 57 (or beyond with extensions), and shortly after retiring were diagnosed with significant medical ailments that resulted in their untimely passing. I remember traveling to visit one friend (she was 61 years old at the time) who had been diagnosed as terminal (liver & pancreatic cancer). One day, I took her to a chemotherapy appointment and then we went for a beer and food after. During that lunch, she sat across from me and told me her 3 biggest regrets were: she should have retired at 50 (not 57 like she did); she should have traveled more once she retired; and she should have spent more of her TSP (she never touched it). She passed away 5 months after that visit at age 62, 13 months after she was first diagnosed and 5 years after she retired. That discussion in 2013 had a profound impact on my outlook toward retirement and what I wanted to get out of it.
My retirement process couldn't have been smoother. I found a few minor typos in the paperwork my HR department prepared for OPM and made sure they were corrected. I received my one month of estimated benefits (right on time) and before the next month, OPM finished everything! And it was all accurate! I retired the end of March 2020 so I was expecting the worst but was very pleasantly surprised. I was informed that I would eventually receive my final SF-50 by mail, but that hasn't happened yet. However, with the help of a current fed, I was able to log into my eOPF shortly after I retired and retrieve it before my eOPF closed out. (You can only log into your eOPF from a government computer.)
I can't think of anything I would have done differently. (At least not yet.) I have always been a saver and tried to keep educated and up to date on our benefits. Save as much as you can and get out of debt as soon as you can. You'll thank yourself someday!
I think I should have prepared mentally more for the day to come. I still would have stayed until age 56 but I would have prepared for the next phase of my life a little more. I had gone through a divorce 6 years prior so I was trying to reinvent myself and focus on attaining a different plan for the next part of my life. But it has all worked out and life is good. Being paid once a month (the pension and social security supplement) for a job that you don’t do anymore is pretty sweet. Hopefully that will continue for many, many years to come.
I would have been more aggressive about networking with the goal of finding post-government work in private industry and would have retired earlier.
I believe I should have listened to my younger self and not made changes to my TSP allocations when I got nervous with the market. The money still needs to last 20+ years (hopefully!) and thus it needs to grow, not be parked and lose money to inflation
How is actual retirement compared to how you envisioned it to be? (Better/worse/more boring, etc?)
Since I’m still working, it doesn’t feel like retirement. I retired one day and went to work the next so I never really got to experience retirement.
Much better than envisioned!! Retirement is like a second childhood, only much better.
1st off – no government phone to answer – WooHoo! It took two weeks to for me to stop reacting to my personal phone (thinking it was a work phone). Retiring in the middle of COVID changed everything – no retirement party, no big vacation. On the plus side, the financial impact of receiving interims payments was easier to manage because I don’t spend the same. There are some boring days, but usually I’m busy enough that I find myself wondering where the week went. I really enjoy my coffee more and having a proper cool down time after exercise. I spend much more time on my finances to ensure don’t outlive my money and I have enough left to pay someone to change my diapers as I don’t see my kids doing it. I do not miss the work. I do miss the in person social interactions I had with co-workers and staff. But not enough to regret leaving. While I don’t need to work, I’m thinking to get a part time job if it feels right.
I haven’t retired yet, but I think that the current pandemic, which forced me to telework more, really prepared me for the transition into retirement (or at least the transition into working from home). We are building a house in Florida that will be finished in late November of 2020 and will be splitting our time between GA and FL, so that move will keep me busy. I am also looking to do some private contracting and took a course to become a certified EEO investigator.
Personally, I can’t believe how great it’s been – I had hoped it would be and so far, it has not disappointed. However, seeing the suffering and hardships so many of our citizens are experiencing today, it feels awkward to be in this position, knowing full well that I’m the recipient of just sheer luck and timing……but for the grace of God.
I love it. A little boring every now and then but so was work. I planned on getting a part-time job but haven't applied to any yet. I'm looking for the perfect part-time job. I've been keeping busy and was never a morning person so I love sleeping in.
Retirement is better than I imagined because I have kept busy with outside interests and projects and have not become complacent. What makes it better is that I have come across additional interests that I hadn’t necessarily thought I would become involved in. There is a lot of satisfaction in helping others.
You hear that the cost of living will decrease once you are retired. My spending initially went up a little in the first year of retirement. I was driving more, involved in activities that cost money, purchasing items used in hobbies, and traveling more.
Dunno – haven’t gotten there yet. Last day is Dec 31st.
LOVE IT!!!! It is actually better than I thought; there is never a dull moment or lack of things to do despite COVID. Travel is not an option now, but I have spent the past few months exploring the local area and doing things I never had time for when working. Also, I am consulting part-time a few days a week from home, so that keeps me engaged in the work community.
Retirement is AWESOME!!! All those people who say “you will get bored” must have no outside interests besides their government job. I was given great advice from a close friend, who told me to try to “accomplish one thing a day” in retirement. Don’t do 10 things a day – pace yourself – and create a balance between staying busy & productive and enjoying the fruits of all those years labor. Between handling all those tasks that never seemed to get done when I was working and outside interests (I have a couple of contract jobs but nothing that would classify even as part-time work; only 3-8 hours per week maximum, just enough to bring in “beer money”) I have found the days fly by. I go to the gym almost every day now and find myself more relaxed (I no longer flinch when I hear the cell phone ring!)
I never associated my identity with my job. I took my job seriously, but I always considered myself a father, husband, son, brother, etc. before a special agent. My job was my job, and though I was very grateful for it, it never defined me. For that reason, it was not difficult to walk away from it. I'm still getting used to retirement, in a good way! I'm getting more sleep and more exercise. I have time to spend on hobbies I've always been interested in. It's so nice to not have to worry about cases or bosses or work in general. In a word, retirement is freedom. What's better than that!
It’s good because I am still working in the field that I enjoy so much. It’s different working for a private company after working for the FAA for so long. But it’s a good change and has made me widen my lens and see what so many other people deal with everyday of their careers.
Not there yet
If you don’t mind sharing, what was your exiting TSP balance?
It was a little over one million.
$600K not including external IRAs, Roth and savings.
$698,000
$1,088,000
I exited with a balance of $899k – I went 100% “G” at the end of October ’19 to preserve what I had before retiring at the end of December. In February ’20, I went back to 70/30 (C & G) where I had been throughout the bulk of my working career.
Approximately $660,000 I retired during the corona crash! It's currently $800,000 +. I'm prepared for some more fluctuations in the coming months.
At retirement, approximately $950,000. Within the next year, my TSP went over $1,000,000.
As of today - $802k and change. The last couple of months have been nerve wracking.
~$925K
As of today, 70 days from retirement, it is $810K
I retired at the end of March 2020 and my TSP balance was roughly $835,000. I started my federal employment in March 1994, but back then employees were subject to a waiting period and open seasons before we could start contributing to the TSP. I started contributing as soon as I could in 1995 and always contributed as much as I could. I turned 50 in 2019 and began catch up contributions that I continued through 2020.
As I approached my retirement date, I adjusted my balance more conservatively. I estimated my expenses in retirement that would exceed my annuity and supplement, and calculated how much I would need to pull from my TSP each year until I claimed Social Security (and would no longer need additional money). I moved this total sum into the G fund, giving me peace of mind to ride out any market turmoil. Though I wasn't brave enough to buy the coronavirus dip, I also knew I didn't need to panic and sell. My total TSP balance at the end of September recovered to over $950,000. The market continues to be a pretty wild ride, but for the most part, I'm sleeping ok.
$730K. It would have been about $1.2 million, if I hadn’t gotten divorced so late in my career. But it was worth it, trust me.
I know we could always use more money, but specifically, do you think your annuity, supplement, and TSP are covering your expenses ok?
I don’t know if I could have afforded a true retirement where I didn’t work anymore. I have to pay for college for my kids and I live in an extremely high cost of living area. The fluctuating stock market and it’s yo-yo effect on my TSP causes me a little bit of stress. So I really can’t answer this one yet!
My pension covers my expenses fine. In fact, I haven’t begun to draw from TSP yet.
Yes
Although I would like to avoid touching my TSP as much as possible, I will probably need to for at least the first year while I still own two homes. However, after reading your paper on the
“Barbell Strategy”, I have come up with a good plan to maximize my TSP and move some of the balance to an IRA. I am comfortable that my annuity, supplement and a modest monthly withdrawal from my TSP will cover my expenses.Yes (but we’re a 2-pension household). Now if I decide to treat myself to some luxury items later, i.e. vacation home, fancy car - then no. Those will have to wait till I claim SS (first available) and pay off my house in five years.
Yes. I have other investments also. I find it very hard to go from savings mode to making TSP withdrawals. I've been putting off making any TSP withdrawals but plan to start monthly automatic withdrawals soon.
For me, the pension/annuity and FERS supplement I receive cover reoccurring monthly expenses without withdrawing from my TSP. My spouse’s full time salary is available if we need something my pension/annuity doesn’t cover. So, we are still saving even though one of us is retired.
In a couple of years, when I turn 62, I will lose the FERS supplement, my monthly check will reduce, and I will have to decide whether to apply for social security benefits or not. At this point, I am not planning to draw social security until later as our savings will cover the discontinued FERS supplement. I feel that if I applied for the social security benefit now, it would raise our tax liability as long as my spouse is working full time. I would like to avoid that.
If my math is right and the excel sheets put out by Dan Jamison are accurate, yup… I’ll be ok.
100% and more.
“There are two ways to be rich: One is by acquiring much, and the other is by desiring little.” Jackie French Kolle. I believe I first read that quote, or something like it, in a Barfield newsletter, if I'm not mistaken. It is nothing less than the secret to financial freedom! In the context of this quote, if you desire less, you are free to save more (in your TSP, Roth IRAs, etc.) and eliminate your debts. You will become rich both by acquiring much AND learning to live on less. That's the secret sauce!!
To answer your question, I feel comfortable with my annuity, supplement, TSP, and eventual Social Security to meet my expenses in retirement. I entered retirement completely debt free including our home. My kids' college educations are fully funded. My additional savings (cash, Roth IRAs, and other taxable investments) give me additional security to meet unforeseen expenses, have some fun in retirement, and hopefully pass on some wealth to our children.
My wife and I both worked until we started a family in 2000 when my wife quit and stayed home with our kids. I retired as a GS-13, step 9, and for most of my career, my wife was a stay at home mom. While we drive older, boring cars and I packed my lunch every day at work, I don't feel like we had to sacrifice anything; it was a conscious choice to be frugal and deliberate with our income so that we could enjoy our financial freedom sooner than later. What made sense for us may not be for everyone, but we all have choices, and our retirement will be the product of those choices. None of us will get a pension that replaces 100% of our income. If you save nothing and spend your entire salary in your working years, it will be difficult to retire completely. Everyone has to find the right balance that achieves their goals.
Yes, they are. The additional income from my current job has really put me over the top. I am still investing for my ultimate retirement too, so that’s an added bonus. To date after retiring 1 ½ years ago, my TSP balance has not been touched. I have gone a little more conservative with it but it continues to grow. Also, the company I work for now has a Simple IRA. After the 2 year waiting period for that, I plan on adding those monies to the TSP and will continue to do that on an ongoing basis until I leave this job.
I expect that it will. We have been living on a budget this year as if we were retired plus paid off our mortgage. No debt going into retirement.
If you are in the private sector (or looking to get into the private sector), how did you find/are you finding the experience of job-hunting? Did you hire a resume service, or some sort of job placement consultant?
N/A
N/A, I neither want or need a job.
Everything is online. I’ve had virtual interviews, telephonic interviews and a Zoom interview. Still no job, but I really think COVID is impacting hiring. Since I’m not hurting to find employment, I haven’t hired a resume service or job placement consultant and I’m not putting forth a big effort.
I have found job-hunting to be somewhat daunting at first. Having been in the federal government for 28 years, I really haven’t had to interview for many positions and was not familiar with how to write a good resume for private industry. I did hire a resume service, who also helped me with my LinkedIn profile. I was also surprised to find out how many companies use video interviews at the outset of the hiring process, and had to get used to recording video answers to interview questions, Zoom calls, etc.
N/A
I have only applied to a few jobs but most high paying jobs seem to want supervisory experience. I wish I would have volunteered for more temporary assignments at HQ and for acting supervisor roles.
Since retiring, I am not working. I would have to limit myself to the social security maximum ($17-18,000 a year) or face paying some/all of the FERS supplement back. That is not something I want to do.
If I was considering working again, I would look at contracting with FEMA. They need people to assist and I would have the ability to travel domestically while working.
I do not plan to work after retirement and if I do, it’ll be part time on a golf course, a local resort, or something non-stress.
I am now in the private sector supporting my former agency. I wrote my own resume based on online examples (nothing like those required by a federal agency for internal job ads!); called a few local companies (post retirement per the agency legal counsel) and was getting offers the week after I retired.
The experience job hunting was somewhat weird after holding a government job for 35 years. But luckily, I found something that I enjoy still doing and very quickly. By doing research online and talking with my daughter I came up with a presentable resume and it did the trick. I found out about the job on Indeed and from former coworkers.
I have not really sought a job, especially in the LE arena. I was recruited for a couple of contact jobs specific to my background and experience from federal employment, and in both instances they were for companies run by former LE or military. As a result, it was quite simple to “speak their language” and “fit in”. I have heard that there is a strong anti-LE/federal sentiment out there if you try to get a job in the private sector, and know many friends who have experienced it first-hand. I also have friends that have hired these resume services, and resoundingly they found them to be a waste of money. It all seems to boil down to connections, just like when you were working for your agency. It’s not what you know but who you know.
I am not currently working in retirement and have no immediate plans to do so. If all of my math and planning were in error and I need some additional income, I may don a hairnet and pass out samples at Costco. I am not looking to start another high-stress career and waited to retire until I could afford to do so without the income from a second career.
N/A
What would you tell those considering retiring in the next few years?
Keep maxing out your TSP and make sure to do the catch-up contributions. Start networking and look for other opportunities (in other government positions or the private sector). Don’t be afraid to pull the chord and retire. You’ve earned it!
Plan ahead in all aspects. Financially, mentally, what you are going to do day to day, etc.
Plan early on and stay disciplined to save. Don’t make any large, abrupt changes in retirement. Enjoy the journey of new found freedom and discovering what you want to do with it.
Do the math. Waiting for another few years to bump your pension might not be worth it. None of us know when we are going to pass on. Remember every debt you clear equals a pay raise. You can bridge the take home pay gap by clearing debt. Especially your house and car payments. Also, if you have adult children and you are paying any of their bills, you are hurting yourself. The best thing you can do for your children is to ensure you don’t become a financial burden to them. That means you may have to say no or not help them the same when they are adults.
First, read (reread) Chris’ Newsletters and Dan’s FERSGuide over and over again and then implement the suggestions provided, if you haven’t done so already. And when you’ve done that, go back and read it again. Secondly, if you are within a year or two of retiring, remind yourself that when you walk out the door, you cannot come back in. So, with that in mind, make sure to obtain copies of everything HR has on you, and your training records (especially if you plan on leveraging your training for a relatable follow-on career). Third, surround yourself with colleagues (even with the ones you don’t like much) who are similarly situated and make time (formally/informally “read – over a favorite beverage”) to discuss retirement issues. It can serve as a useful measuring stick as to where you are in the retirement planning phase. Lastly, don’t forget to say thank you prior to your exit to the many folks who were instrumental in getting you to this milestone in your professional life.
Go for it. Your workplace can live without you.
Make sure you are maximizing your contribution to TSP plus the over 50 contributions for several years before retiring.
Be debt-free or as close to it as you can before retiring.
Lastly, have a plan in retirement.
Save wisely, crunch numbers, and know what you are eligible for. The spreadsheets are an extremely valuable tool. Use them and get an estimate from your HR department. Do the computations and be realistic about your expectations.
GO FOR IT! But have a plan on how you will spend your time (esp with travel restrictions in place for COVID), crunch the numbers, remember to account for Federal and State taxes…and if it looks tight, find another job doing something you enjoy with less stress for a few days/week.
I would tell anyone considering retiring not to be afraid to leave government service. There is a life outside of your agency, and there is a “freeing” aspect to no longer being bound by the restrictions of the job (I was a federal Agent). I am very thankful for the career and experiences I had, but had no regrets when I walked away. I also think people need to know when it is time to leave the job to the next generation. I saw all too often both in the field and at HQ there was a point where the organization no longer valued, nor did it want, the historical knowledge of those of us who had been around for awhile and could speak to “how things used to be” or what had happened in the past. Go out on your own terms, don’t let someone force you out.
Do the math. Know how much you'll be earning in retirement, and how much you'll be spending. It's different for everyone. Have a plan. Make educated decisions and plan ahead.
Save as much as you can, as soon as you can. Get out of debt as soon as you can. Time goes quickly. Get started today!
Start networking now, and have a fall-back plan if Plan A doesn’t work out. Also, read (and re-read) the FERSGuide. Get familiar with the retirement forms and the decisions that you will need to make regarding FEGLI, survivor annuities, etc. And of course, subscribe to Chris Barfield’s newsletters!
What would you tell those 20-somethings that are just starting their federal careers?
Work hard and enjoy your job! Have fun and be safe. However, don’t forget to maintain a healthy balance between work and family.
Max out your TSP from day one. Retirement comes sooner than later. Also, know your retirement plan and be familiar will all of your future benefits. It is never too soon to educate yourself.
Also, take your leave as we all need a break from time to time. Don’t ever forfeit use-or-lose leave! And if your agency offers time on the clock to work out, take advantage of the benefit and stay healthy.
Get to 15% as quickly as possible and max out throughout the year if the percent will exceed the max allowed by law. At 50, jump on catch up and ROTH all the way.
I recently had two brand new agents start in my agency over the past month. Today, I sent both of them a link to the newsletter you published yesterday giving an overview of FERS, as well as links to your website and Dan Jamison’s FERSGuide site. I tell every new agent that time really does fly, and the time to develop a solid plan with the TSP is now, when you first start out. I also encourage them to maximize their TSP contributions. I really wish I had someone to do that for me when I first started.
Enjoy your career. It goes by very, very quickly. Max out the TSP every year, without fail. Pick an asset allocation you are comfortable with and stick to it all the time. Rebalance once a year. For many, many years of my career I was investing 20% in each of the funds (C, S, I, F and G). And would rebalance once a year. It kept me out of trouble. A nice balanced portfolio is your friend, especially in years like 2000 and 2008. Rebalancing forces you to sell high and buy low.
What I was telling them before I left. Start saving early with at a minimum the matching funds. Consider using the Roth option.
Plan your retirement early and don’t touch your TSP. Take care of your money so it can take care of you. Maximize your TSP. Invest privately it you can. Stay positive and count your blessings. A career that provides a pension is rare nowadays. Fancy cars depreciate in value and interest you pay is penalty. Interest you earn is a reward. If you can swing a 15 mortgage, do it. Term insurance is all you need and you should shop rates because the FEGLI isn’t necessarily the best deal.
Follow the advice in Chris’ Newsletters and subscribe to Dan’s FERSGuide. Implement the suggestions given as soon as you’re able. Sacrifice now and before you know it, it’ll be barely noticeable. Even if you leave your organization before getting to retirement, you will likely leave with more than you came in with if you follow through with the guidance provided.
Max out your TSP as soon as your able to. Find interests outside work. Your job is not your identity. Learn some basic investing principles, read some books on passive investing.
Maximize your TSP contributions right now and learn to live on what is left while still saving money for emergencies. If you do this right at the beginning of your career, you will not miss the money you are saving. Once life choices come along, i.e. marriage, children, mortgage, etc. it is harder to try to begin saving money. Also, try to avoid debt. It is easier to stay solvent than try to climb out of debt.
Focus on the future, not the present. Save and save a lot so you get the pleasure of getting out early. Forgo the Starbucks, brown bag it for lunch now and then, etc. and put the extra $$$ per month in the TSP.
Put at least the matching % into the ROTH TSP option, and as much as you can up to the max. For each pay increase that comes in January, just up your TSP contribution that much. Be aggressive with your fund allotment in your early years for the highest returns.
Pay the $20 and get the FERS Guide online or from Amazon. You won’t find that detailed information anywhere, and with most agencies cutting back on retirement training, this is an excellent resource on all FED benefits.
I would tell them to enjoy everything that this career has to offer, but also to remember that they are representing all of us who came before them so to do so with pride and patriotism. They came in knowing and agreeing to be held to a higher standard, and it is their duty to fulfill those requirements. Do not settle for less, and never do anything to degrade the badge or embarrass your agency. Remember what old time agents used to have posted on their wall: “it isn’t as funny in an affidavit”.
Save as much as you can, as soon as you can. Get out of debt. Learn to live on less. As you move up in pay grades, don't increase your standard of living if you aren't maxing out your TSP (and hopefully Roth IRAs also).
Don't assume you'll work until a certain age. You may get hurt. You may get a new boss and suddenly not like your job anymore. Your agency may want to make you move. Plan like you're going to retire as soon as you're eligible. If you reach that point and still want to work, that's great. Planning = freedom.
Save your sick leave. If you have a doctor's appointment, use annual. If you have a serious, non-work related illness or injury (or a family member does), you have the hours to use. If you don't need to burn them, you'll get credit for them when you retire which could be substantial.
If you are prior military, make a deposit for your military time ASAP and keep the documentation in a safe place. Make sure the documentation is added to your eOPF.
Get educated about your benefits and keep up to date. Be the office expert and educate your colleagues. Have a working knowledge of taxes and personal finance in general.
Stay healthy. Make it your goal to set a record by collecting more annuity checks than anyone else in retirement.
What resources did you use to get retirement/post career guidance? And would you recommend it to others?
I found Dan Jamison’s FERS Guide to be a great resource. I also sent him an email from time to time and found his information to be very helpful. He also has a couple of spreadsheets on his website where you can crunch numbers and decide if retirement or a second job is feasible.
Also, I think I connected with Barfield Financial through Dan. Your information and newsletters are a great resource too.
It was also helpful to discuss retirement with work colleagues and share information. I found that a lot of my co-workers had done similar research and were great sounding boards. Discussing things with others can lead to opportunities you didn’t know existed.
Email newsletters, Federal websites and calculation sites. In agency career guidance has been sparse to non-existent depending on the agency.
I found the FERSUIDE and Chris Barfield to be great resources and I recommend them both. I had other retirement consultants run numbers and for me I personally didn’t find any value other than confirmation that I could retire.
I have used LinkedIn and Indeed, but find that you really need to have contacts in private industry to help you get your foot in the door and your resume in front of a live person. Don’t be shy about asking friends/former co-workers for help, or for introductions to prospective employers.
Mostly from co workers. I had to decide if I wanted to reinvent myself to another career or stick with something I have loved for 35 years. I chose the latter. I plan on doing this for another 5-10 years.
Chris Barfield’s Newsletters and Dan Jamison’s FERSGuide is bar none the best guidance that I received and should be your go-to resource for a successful retirement. I also attended several retirement seminars 5 and 3 years out from my targeted retirement date. They weren’t bad and they served to reinforce what I was receiving from Chris and Dan. Also spent many hours having discussions with my colleagues who were ardent followers of Chris and Dan.
Yours and Dan Jamison's newsletters. I definitely recommend them.
I attended a couple of retirement seminars geared toward federal employees. I had to pay to attend and obtain time off work to attend but was able to do this 10 and 15 years before retirement. I also attended two agency sponsored retirement seminars when I was closer to retirement (within five years). These seminars were more specifically for employees in my same situation, LEOs.
Subscribe to Dan Jamison’s FERS Guide and read his monthly newsletter as well as Chris Barfield’s papers (it’s free) on retirement issues.
Dan Jamison’s FERS Guide is wonderful. Between his info and yours, there is nothing better!!! Read, study and be well versed.
Our agency had online retirement training the past couple of years.
FERS Guide – Dan Jamison
The only resources I used were these newsletters such as Barfield (Barfield Financial), Jamison (FERS Guide), Pritchard (The Fed Trader) and another guy who no longer seems to be posting (TSP Allocation Guide). I subscribed to the FERS Guide and talked with those who went before me, as they are the best source of information and advice.
Dan Jameson!!!
FERSGUIDE and the Barfield Financial newsletters are easily the best resources I've found.
I also took a class for SCE employees by Graduate School USA. It was excellent and I've referred to their books often.
I am a member of NARFE and they often have excellent Webinars for members. They also have staff to answer questions about your benefits.
I read emails from FedSmith, Fedweek, Fedagent, and probably a few others I can't recall.
Dave Ramsey has lots of great books and free info on his website for learning all about personal finance and getting out of debt.
Anything else you would like to share with current employees?
Don’t be afraid of retirement. The job will replace you the second you’re gone and the government will continue to operate just fine without you. The important things are family and the friendships you made along the way. Those are the things that will last forever and bring you happiness in retirement.
Take other’s advice into consideration but make your own decisions. We each have different goals, situations to accommodate. What others have done may have turned out very well for them may be a disaster for you. Of course, that applies to everyone else’s advice, not mine.
The time to plan your retirement is NOW. The time goes faster than you think. Next thing you know, you’re 54 years old answering a survey about retirement.
It’s easy to get carried away with talking about money and investments and what to do with it and when, or who’s doing what and why. But it’s equally important to remember that your situation is personal just to you and your family. Preparing for retirement is as much about having options that successful planning affords you as it is saving/investing.
Lastly, include your spouse/significant other throughout the entire retirement planning process. It will assuage their concerns/questions and give you a trusted partner to walk this journey with.
I believe that if you live within your means while you are working, you will be able to live within your means in retirement, barring unforeseen circumstances.
Be in control of your finances. If you find yourself in debt, work very hard to get out of it. Live below your means if you have to.
Do not be afraid to get your agency’s HR department involved, even if it’s mid-career. Get them to crunch numbers for you. I got a benefit analysis from my agency (SSA) once in each of the last three years to see the numbers. I was able to compare how they changed.
Also, for me, retirement is a huge step. I’m old school and think “retirement is for old people and I’m not old”. BUT… early retirement is a blessing. Yes, I will miss dear colleagues and “the chase” of the job, but spending time with family and friends, going golfing without looking at a calendar, knowing I’ll be available to see my daughter in one of her activities, etc., well outweighs any downside of early retirement.
Max out your TSP in the ROTH and don’t put any into Traditional. Most of us that are now retirement eligible started when FERS and TSP just came into being in the mid-late 80s. So all we had was the Traditional TSP option, which means most if not all our TSP funds and earnings are tax-deferred which means we will be paying fed/state taxes on all withdrawals.
Although somewhat specific to my agency (FBI) I think others can benefit from this knowledge. I submitted my retirement package 6 weeks before the proposed retirement date, no issues there. Because of COVID I did find some folks were hit-or-miss at HQ when it came to processing certain aspects of my retirement, but being a career investigator I was persistent and ultimately found people who were willing and able to help (i.e., retired creds, processing retirement paperwork, retirement estimates, etc.) However, once I walked out the door, it was shocking how little people cared. I am almost 6 months removed from retirement, and I still have not received my final annuity numbers from OPM. People want to blame the pandemic and OPM, but I can say that from my experience, OPM has been the MOST responsive and helpful (hint: call them at 7:40am when they open for the shortest wait times and best help, don’t do it during lunch or near the end of the day.) Conversely, FBIHQ and NFC (National Finance Center) were less than helpful. FBIHQ will force you to use the “call center” which seemed to only be interested in pushing me off and not helping (to this day I am still waiting on return calls for “tickets” I had opened after 3+ months elapsed and I had yet to receive ANY payments from OPM.) NFC’s favorite term is “privacy act” and they will not talk with you, the retiree; they will only talk to your agency but you cannot get anyone from your agency to return your calls/emails. I would highly recommend before your last day, take down the names/numbers of all HQ people you can (even SES level personnel, as I have had to elevate my situation to that level over these long 6 months). Also, make sure you have a financial plan…meaning, how will you survive for 3-4 months after you retire if all you get is an AL payout check? I went over 100 days before I received my first interim payment from OPM, and that happened only because I launched the equivalent of a fugitive investigation on personnel from all 3 agencies (FBI, NFC and OPM) until I got people who were willing to assist me. But if you plan ahead, and can weather the storm between retirement and the finalization of your annuity, and I still say even with all the bumps I’ve experienced so far that retirement is 100% the way to go.
No retired fed who worked an entire career will be living in a cardboard box and eating dog food in retirement. However, your comfort, fun, and freedom in retirement will be the product of the money you save (in the TSP and elsewhere) and the debt you carry into retirement.
While retirement is great, don't spend every day wishing to be retired. Time goes by very quickly. Enjoy each stage of your life and don't wish time away. While working for the federal government is not perfect, we are very blessed to have the retirement opportunities so many others do not. Be grateful!
Enjoy your career and be interested in learning about retirement. You are never too young or old to do that.
Use all of the available resources at your disposal to plan for retirement. Start attending retirement seminars 10 years out from eligibility, and subscribe to the FERSGuide and websites such as yours to get a different perspective on all of the options available. Don’t wait until the last minute, as time does really fly!
Keep a positive attitude with the job and remember you are there to serve. Don’t be an arrogant ass.