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postalvet  
#1 Posted : Wednesday, July 15, 2020 7:02:47 PM(UTC)
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Employee annuitants

CSRS 1,319,003

FERS 813,710

https://www.everycrsreport.com/reports/98-972.html
racist here call me postal patty or karen

Postal retired 38yrs


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SD Analyst  
#2 Posted : Friday, July 17, 2020 5:01:18 PM(UTC)
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"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.
EagleDog  
#3 Posted : Friday, July 17, 2020 5:23:29 PM(UTC)

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Originally Posted by: SD Analyst Go to Quoted Post
"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.

I didn't read the report, but I'm guessing it's heavily skewed. Also not apples to apples (30 yrs vs 30 yrs, etc).
FERS are able to retire with less years. FERS has portability (employees are able to come and go more freely). Most CSRS have to stay close to 30 years. Many stay much longer (38 years, etc).
I'm guessing the CSRS numbers include a lot of the HIGH earning CSRS employees in the federal government, Those making $250K-$300K (think Dr. Fauci, etc.).

We just did the comparison for Postal Employees.
FERS + Social Security was more than a CSRS annuity. Apples to apples (30 yr vs 30 yr).
TSP was all gravy. Cherry on top.


thanks 1 user thanked for this useful post.
GordonG on 7/18/2020(UTC)
GWPDA  
#4 Posted : Monday, July 20, 2020 6:15:09 AM(UTC)
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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.
EagleDog  
#5 Posted : Monday, July 20, 2020 10:18:43 AM(UTC)

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Originally Posted by: GWPDA Go to Quoted Post
The only way FERS compares well with CSRS is when you add in Social Security.

Yep.
And that's exactly the way it was designed.
FERS is the three-legged stool (FERS pension + SS + TSP matching contributions).
CSRS is the one-legged stump :)

TheRealOrange  
#6 Posted : Monday, July 20, 2020 11:56:20 AM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
Originally Posted by: GWPDA Go to Quoted Post
The only way FERS compares well with CSRS is when you add in Social Security.

Yep.
And that's exactly the way it was designed.
FERS is the three-legged stool (FERS pension + SS + TSP matching contributions).
CSRS is the one-legged stump :)

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:

High-3 of $60,000: FERS is $18,000 (30%) under age 62, or $19,800 (33%) age 62 or over. CSRS is $33,750 (56.25%). So, Social Security (or the FERS supplement) have to make up the $15,750 or $13,950 per year.

High-3 of $75,000: FERS is $22,500 or $24,750, and CSRS is $42,187. Social Security (or the FERS supplement) have to make up $19,687 or $17,437.

High-3 of $100,000: FERS is $30,000 or $33,000, and CSRS is $56,250. Social Security (or the FERS supplement) have to make up $26,250 or $23,250.

High-3 of $250,000: FERS is $75,000 or $82,500, and CSRS is $140,625. Social Security (or the FERS supplement) have to make up $65,625 or $58,125.

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. ;-)
EagleDog  
#7 Posted : Monday, July 20, 2020 12:06:56 PM(UTC)

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We did the math for Postal Employees. We used $1500/month estimate for SS.
As of January 2020, a 30 year Postal Employee gets a monthly CSRS annuity payment of $2,944 vs monthly FERS annuity payment of $1,570 ($1,727 if you retire at age 62 or older on FERS).
The FERS annuity and SS ($1,500) are already more than the CSRS annuity. Without the TSP factored in.

https://www.nalc.org/wor...-issues/body/CSRS-14.pdf

https://www.nalc.org/wor...-issues/body/FERS-14.pdf

Edited by user Monday, July 20, 2020 12:32:09 PM(UTC)  | Reason: Not specified

EagleDog  
#8 Posted : Monday, July 20, 2020 12:19:59 PM(UTC)

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Originally Posted by: TheRealOrange Go to Quoted Post
I have yet to meet a CSRS retiree dissatisfied with their two-legged tree trunk (annuity plus TSP w/o matching). :-)

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.

Originally Posted by: TheRealOrange Go to Quoted Post
By the way, as a physician and federal employee, not appointee, Dr. Fauci made $417,608.00 in FY 2019. Not too shabby. ;-)

Wow!!!
I'd love his pension.
CSRS, FERS, whatever :)
TheRealOrange  
#9 Posted : Monday, July 20, 2020 12:26:08 PM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
We did the math for Postal Employees. We used $1500/month estimate for SS.
As of January 2020, a 30 year Postal Employee gets a monthly CSRS annuity payment of $2,944 vs monthly FERS annuity payment of $1,570 ($1,727 if you retire at age 62 or older on FERS).
The FERS annuity and SS ($1,500) are already more than the CSRS annuity. Without the TSP factored in.

https://www.nalc.org/wor...-issues/body/CSRS-14.pdf

https://www.nalc.org/wor...-issues/body/FERS-14.pdf

I could not get the links to work. Was that just for letter carriers? If so, then it makes complete sense. As I recall, the average high-3 at retirement for letter carriers was about $62,000-$63,000, and your numbers are almost the same as mine for a high-3 of $60,000. I was referring more in general, as I believe the average high-3 across the government for FERS is much higher. I think FERS is great, but for some it is not as generous as CSRS. And, there are definitely Postal Service employees with quite high salaries.
TheRealOrange  
#10 Posted : Monday, July 20, 2020 12:27:16 PM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
Originally Posted by: TheRealOrange Go to Quoted Post
I have yet to meet a CSRS retiree dissatisfied with their two-legged tree trunk (annuity plus TSP w/o matching). :-)

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.

Originally Posted by: TheRealOrange Go to Quoted Post
By the way, as a physician and federal employee, not appointee, Dr. Fauci made $417,608.00 in FY 2019. Not too shabby. ;-)

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

No doubt!
EagleDog  
#11 Posted : Monday, July 20, 2020 12:35:26 PM(UTC)

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Originally Posted by: TheRealOrange Go to Quoted Post
I could not get the links to work. Was that just for letter carriers? If so, then it makes complete sense. As I recall, the average high-3 at retirement for letter carriers was about $62,000-$63,000

Ooops!
I fixed the links.

p.s You were spot on with your high-3 estimate. It's $62,805.
GoHuskers  
#12 Posted : Monday, July 20, 2020 12:56:37 PM(UTC)

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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.
TheRealOrange  
#13 Posted : Monday, July 20, 2020 1:11:40 PM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
Originally Posted by: TheRealOrange Go to Quoted Post
I could not get the links to work. Was that just for letter carriers? If so, then it makes complete sense. As I recall, the average high-3 at retirement for letter carriers was about $62,000-$63,000

Ooops!
I fixed the links.

p.s You were spot on with your high-3 estimate. It's $62,805.

This is way off topic, but my favorite letter carrier of all time was my great uncle. He enlisted in the Navy at 17 years old and served for 20+ years, including service during WWII and Korea. He then went on to work as a letter carrier and spent over 20 years doing that. He was one of the nicest people I've ever met; just an amazing man.
EagleDog  
#14 Posted : Monday, July 20, 2020 1:18:51 PM(UTC)

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Originally Posted by: GoHuskers Go to Quoted Post
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

Raoul  
#15 Posted : Monday, July 20, 2020 5:01:18 PM(UTC)

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The whole comparison will become moot.
25 years ago there were 1.3 million CSRS annuitants and 1.3 million CSRS employees.
Now there are 1.3 million CSRS annuitants and about 100 thousand CSRS employees.

In 25 years someone will ask what is CSRS?
Retired July 2011
EagleDog  
#16 Posted : Tuesday, July 21, 2020 7:42:50 AM(UTC)

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Originally Posted by: Raoul Go to Quoted Post
The whole comparison will become moot...In 25 years someone will ask what is CSRS?

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  
#17 Posted : Tuesday, July 21, 2020 3:52:01 PM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
Originally Posted by: Raoul Go to Quoted Post
The whole comparison will become moot...In 25 years someone will ask what is CSRS?

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%.

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.


I hope your supplement doesn't go away. as you well know, everything is always subject to change.

to be fair, generally congress is pretty good about implementing change going forward and not reaching back so you're probably ok.

one thing to remember about the csrs folks in relation to the discussions you had, we were offered the switch sometimes later in our career. it just didn't make sense to switch and try and catch-up. in our situation we were better off. I'm trying to remember, and maybe someone can chime in, but I think for awhile we couldn't even contribute to TSP? I might be misremembering that bit.

at any rate, I'm better off and haven't even touched my TSP yet and would be out of supplement by now but I had a pretty high wage. I'm not sure because I never looked but i wonder if, had I switched, did they do a look back on my wages for SS determination on all those wages for which SS was not withheld? or was it just calculated on wages from the switch onward? I don't have the answer to that.

Edited by user Tuesday, July 21, 2020 3:53:03 PM(UTC)  | Reason: Not specified

GoHuskers  
#18 Posted : Tuesday, July 21, 2020 8:03:55 PM(UTC)

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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

old fed  
#19 Posted : Tuesday, July 21, 2020 8:40:33 PM(UTC)
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Originally Posted by: GoHuskers Go to Quoted Post
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 no 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.



thanks. I knew there was some sort of restriction I just could not remember the details.

that was my guess about SS calculation which would have put my SS payments well below what they would have been if withholdings had been done over my entire career.

Edited by user Tuesday, July 21, 2020 8:44:31 PM(UTC)  | Reason: Not specified

TheRealOrange  
#20 Posted : Wednesday, July 22, 2020 2:43:08 AM(UTC)
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Originally Posted by: EagleDog Go to Quoted Post
Wow!!!
I'd love his pension.
CSRS, FERS, whatever :)

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