FERS Retirement Calculation Question

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TNCarters
Posts: 20
Joined: Fri Nov 22, 2013 8:27 am

FERS Retirement Calculation Question

Post by TNCarters »

I'm CSRS but trying to help an older employee with shorter service compute their FERS retirement for the entire 3 legs of SSA, TSP and Pension. If an older person has been contributing just enough TSP to get matching funds and has been with the government over 20 years is there a point in career that they are working for virtually nothing extra in net income? I know with CSRS people say you're there when you max out the percentage of high 3. Any web resources that have done calcs for various ages and TSP withdrawal situations.

FERS is very difficult for a supervisor to assist a math challenged employee making retirement decisions. Think we're probably headed toward the EAP contact helping them.

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: FERS Retirement Calculation Question

Post by crondanet5 »

You definitely want to contact EAP to be sure the employee gets the best advice. What if you gave your best available information and it turned out to be wrong for your employee?

sergio
Posts: 10
Joined: Sun May 30, 2010 8:47 am

Re: FERS Retirement Calculation Question

Post by sergio »

Please send the employee to the FERS Retirement Seminar. Here's some links below. I do recall from the seminar that when a FERS employee meets MRA + Years, the pension only increases about $100/Mo. Pension for each additional year worked. There are many other variables to consider... When to take SSA, when the Supplement ends at 62, Keeping Healthcare vs. Medicare at 65, Keep TSP or buy an annuity, one time lump sum withdraw, spouse? Just to name a few. Do advise the employee to take the FERS Seminar.

From OPM.gov: https://www.opm.gov/retirement-services ... igibility/

Computation: https://www.opm.gov/retirement-services ... mputation/

FERS Basic Annuity Formula for older employee: (Copy/Paste) Or, See MRA above...
Age
Formula
Under Age 62 at Separation for Retirement, OR
Age 62 or Older With Less Than 20 Years of Service 1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service 1.1 percent of your high-3 average salary for each year of service

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: FERS Retirement Calculation Question

Post by crondanet5 »

It may be that the employee is working for "nothing" but before retiring that employee's entire situation needs to be reviewed. Is there a mortgage? Would working longer improve Social Security Benefit amount? Are there health issues better addressed while employed rather than retired? Are there credit card debts to be paid off? Look at the whole situation rather than how quickly the person can retire. This is much better accomplished through the FERS retirement people rather than you.

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aev
Posts: 37
Joined: Tue Dec 21, 2010 8:43 am

Re: FERS Retirement Calculation Question

Post by aev »

give this a look (14 day demo)

http://www.fedretiresoftware.com/compare
changed to 84373 from trying to follow 85660

TNCarters
Posts: 20
Joined: Fri Nov 22, 2013 8:27 am

Re: FERS Retirement Calculation Question

Post by TNCarters »

Thanks Cron and others. Agree with most suggestions. Without getting into details this employee is 70 years old with 24 years service and topped out in their position so only getting minimal cost of living raises and SSA is mostly maxed out. Pension years of service and TSP still increasing. I think they may be very close to breaking even net income but as suggested many personal items to consider. Taking care of parent, driving 40 miles round trip to work each day, housing and health. Person is very difficult hearing in a group setting so not sure about the seminar but may have to get EAP to walk through some of the highest points with them. Thanks again, as I probably cant go any more detail into this without PII issues. I'll look into the links provided.

Didn't really get my initial question answered but looks like it may take a year by year personal projection with estimate from SSA to figure this out. Person says they want to work another 5 years but not sure that is realistic.

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: FERS Retirement Calculation Question

Post by crondanet5 »

Are you trying to get rid of her? Sometimes people put up a smokescreen of personal issues to get sympathy and not work quite so hard. Is she good? A credit to the organization? Whatever the case, take two steps back and let her determine her future. You manage the organization and make the taxpayers proud you're in command and she decides to stay or go. Regardless, according to my morbidity studies she has another 12 years expected life. Let her decide what to do with those years, not you. Manage your organization, set goals, and move forward.

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: FERS Retirement Calculation Question

Post by evilanne »

A retirement seminar is very helpful. I don't believe you will find the same situation under FERS that you have with CSRS. Your annuity is 1% (1.1% at age 62) for every year of service; so at 20 years of service, employee would recieve 20% (or 22%) times their average high 3 years of salary and Social Security will be less so it is really important to invest more than the minimum in TSP to have a decent retirement. The annuity supplement only applies between MRA & 62 and for a shorter time for people with only 20 years of service.

www.SSA.gov has online retirement calculators - Social Security benefits are reduced if before Full Retirement Age and increased if delayed and it gets really complicated when you start talking about medicare requirements.
www.TSP.gov has calculators that are easy to use (they do the math based on limited input). Under age 59 1/2, you can only access TSP (without penalty) by getting distributions based on employee's life expectancy, purchasing an annuity or if permanently disabled. IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits may be helpful.

I'm not sure that you should be trying to calculate your employee's benefits, but rather you should direct them to the appropriate resources--such as Human Resources or Personnel specialists. There is a lot of information available on the internet that is useful.

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