Federal Retirees

"The average monthly annuity payment to workers who retired under CSRS in FY2018 was $4,973. Workers who retired under FERS received an average monthly annuity of $1,834." This is why I refused to switch to FERS when it started and again when I was reinstated. If you are FERS, you need to put every dollar you can into the TSP to make up for the much smaller FERS pension.

The only way FERS compares well with CSRS is when you add in Social Security. Then, when you factor being able to retain FEHB, creating a 100% coverage of medical costs after 65, then you're cooking with gas. Having worked under Social Security since I was 14 years old, the SS benefit becomes my primary pension resource.

Hopefully the TSP matching funds (CSRS can have TSP, just no matching) will have paid off for people. Otherwise, I'd take the stump any day. Here are some annuity examples for employees with 30 years at retirement under FERS and CSRS using four different high-3 average income levels, including the rare high income levels you mentioned:


I have to hope my FERS TSP matching funds make up a big chunk, since I will never come close to matching a CSRS annuity with my FERS annuity and Social Security combined, and I will retire at age 62 with over 37 years of creditable service. In fact, if I were under CSRS, I probably would have retired at age 55. As I understand, under 2% of those eligible switched from CSRS to FERS, and for those who had not long to go prior to retirement, it would have been foolish, as the TSP matching would have been insignificant. I have yet to meet a CSRS retiree dissatisfied with their two-legged tree trunk (annuity plus TSP w/o matching). :-)

By the way, as a physician and federal employee, not appointee, Dr. Fauci made $417,608.00 in FY 2019. Not too shabby. ;-)

It's not relevant to include TSP for CSRS retirees when comparing. All they get from the federal government is their CSRS pension.
Their TSP (if they have one) was something they did on their own and their federal agency contributed nothing to it (just like they may have an IRA or rental properties or whatever).
They get one leg from their agency. Any additional legs are optional and for exclusively on their own. No contribution from the government.


Wow!!!
I'd love his pension.
CSRS, FERS, whatever :)

No doubt!

With inflation being low for some time now it is easy to forget, but another factor that figured in the decision to stick with CSRS rather than switching to FERS was how COLA increases are handled under the 2 systems (remember inflation was pretty high in the early to mid 80s when we had to make the choice of whether to make the switch). With no COLAs to the FERS annuity prior to age 62 and subsequent COLAs being less than the SS COLA if that COLA exceeded 2%, the value of the FERS annuity could, over time, erode relative to inflation. As CSRS retirees we get the same COLA as SS recipients.

Good point.
CSRS has the COLA advantage. I'd rather have the CSRS COLA.
Although in many years (2013 through 2018 for example), the COLA's were exactly the same for CSRS and FERS.

Don't forget that FERS employees who retiree at 62 or older get a permanent 10% bump in their pensions.

I believe FERS employees are also treated much better during VERAs (no penalties for FERS).

Edited by user Monday, July 20, 2020 1:22:07 PM(UTC)  | Reason: Not specified

Furthermore, I predict FERS will be eliminated sooner than we think.
Replaced with a greater TSP match. No more defined benefit.
Future employees will rely solely on TSP and SS.

New FERS employees (those hired after 2013) already receive less value than "oldtimers" like me.
They pay 4.4% into the federal retirement system instead of the .8% that I pay.
An increase of 550%.
FERS (classic FERS anyway) is closed to new members. It's now called FERS-FRAE and FERS-RAE.

I can't complain. For literally less than 1% of my salary, I receive a FERS annuity, FERS supplement, TSP automatic (matching available).
All for less than $500 a year.

Full disclosure: I'm very defensive when it comes to my FERS retirement :)
When I was hired, it was "common knowledge" that CSRS was far superior. Everyone knew it. The "oldtimers" had it better off.
Most gloated, some had pity.
But the more I looked into it, I was better off with FERS under virtually every scenario.
There was a shocking lack of understanding. To be fair, it was pre-Internet. I "discovered" the supplement and many other hidden gems that added value to FERS.
Few in my office knew much about FERS. Only that it was worse than CSRS. Why would the government offer us something better? There must be a catch.
Most were skeptical. Most still are.

To this day, many employees are clueless about the supplement. They've never heard of it. When you explain it, they don't believe it.
Many also don't believe they can access their TSP at age 55 (without penalty). They insist it's 59.5. I have this argument/discussion with someone every year.

Edited by user Tuesday, July 21, 2020 10:46:18 PM(UTC)  | Reason: Not specified

Old Fed - We (CSRS retirees) could originally contribute no more than 2% of our salary to the TSP, and the only fund we could contribute to was the G fund. Of course that changed over time. The SS benefit for FERS employees is just based on wages that were actually subject to the FICA tax. SSA doesn't give credit the wages that did not have the 6.2% FICA withheld. However, those years are figured into the annuity OPM pays the FERS retiree. I'm like you, and didn't touch the TSP until I had to start taking required minimum distributions a couple of years ago.

Edited by user Tuesday, July 21, 2020 9:23:58 PM(UTC)  | Reason: Not specified

This article came out at FedSmith today. :-) https://www.fedsmith.com...-paid-feds-1-well-known/