Retirement deductions

[mrubin78]

I've been with the government agency since 2009 but my retirement savings (FERS) began in 2007. What happens to that retirement if I left for a private sector? I'm not referring to TSP 401k since it will be rolled over. Will I lose it big?

[rikarus]

You can withdraw it and get a check from the gov, however, if you ever return to gov service and want to have those years count for anuuity calculation you ahve to pay it back plus interest.

[crondanet5]

You might. The question is have you met the minimum time to serve in order to grandfather in your FERS retirement. If you have, then you would receive your FERS pension. If not, you lose. Assuming your federal workplace situation is good, you like your job, you want more money and thus seek other employment I for one would urge you to really think beyond the extra money. The situation is that at this moment in time the money or better working situation looks good, but how long would it last? Does the new position offer a pension? Not a 401k program but a pension? Somehow in the last 40 years America has turned its shoulder on most Americans by phasing out pensions in favor of 401k promises. Remember that your 401k does not belong to you until you roll it out of your employer's program and into a private rollover 401k account. As the post above yours states, the fed is now legally withdrawing your TSP money to keep the country going. The same is true of private employers in times of financial hardship. But I think Congress will resolve this debt ceiling thing and the TSP money will be restored. So the big question is if you leave federal service will you be responsible enough to set aside sufficient money to establish your own pension fund? And I peg that at 20% of your gross income. Gross, not take home. And even then it is a question of if you are earning enough to make that 20% pension fund balance big enough to yield enough monthly income to meet your expenses in retirement. Now let's not lose sight of the fact that every year you remain federally employed the greater the FERS pension. And I assume you have career advancement programs in place, so the value of your FERS program can move up without putting the cash differewnce between your old pay grade and the new pay grade into the pot to get that larger FERS pension amount. I wonder if the private employer offers that lucrative benefit. In any event, your best advice is to contact the FERS people to confirm what I've said and be sure you qualify for this small pension at some time in the future. Good luck with your decision.