Retirement Planning

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Questions about early retirement

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VAer1		#41 Posted : Tuesday, September 1, 2020 4:40:58 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		There are some congress members who retired younger than 50 yrs old, how does it work? Take House Speaker Paul Ryan for example, he is only 50 yrs old in 2020, but he retired before age 50. Edited by user Tuesday, September 1, 2020 5:10:57 PM(UTC) \| Reason: Not specified


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roger.d		#42 Posted : Tuesday, September 1, 2020 5:10:58 PM(UTC)
Rank: Senior Member Groups: Registered Joined: 8/25/2016(UTC) Posts: 5,136 Location: Midwest Thanks: 137 times Was thanked: 971 time(s) in 789 post(s)		Originally Posted by: VAer1 There are some congress members retiring younger than 50 yrs old, how does it work? Take House Speaker Paul Ryan for example, he is only 50 yrs old in 2020, but he retired before age 50. They are under the same FERS rules ETA: wikipedia shows he was in Congress for 10 years. He can draw a pension at age 62 with no reductions. Or he can draw the pension at age 57 and loose 5% for each year before age 62. Either way I doubt it is much money. Edited by user Tuesday, September 1, 2020 5:17:09 PM(UTC) \| Reason: Not specified
		Those who are, know those who are not. If you think they are after you, what did you do wrong?


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VAer1		#43 Posted : Tuesday, September 1, 2020 5:19:36 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		Originally Posted by: roger.d Originally Posted by: VAer1 There are some congress members retiring younger than 50 yrs old, how does it work? Take House Speaker Paul Ryan for example, he is only 50 yrs old in 2020, but he retired before age 50. They are under the same FERS rules How? Which rule applies in below article? Retired before age 50 and start collecting pension at age 50? Which retirement type? https://www.cnbc.com/201...e-average-americans.html https://www.marketwatch....what-hell-get-2018-04-12 Edited by user Tuesday, September 1, 2020 5:22:50 PM(UTC) \| Reason: Not specified


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postalvet		#44 Posted : Tuesday, September 1, 2020 5:25:16 PM(UTC)
Rank: Guest Groups: Guests Joined: 2/6/2014(UTC) Posts: 33,037 Was thanked: 14 time(s) in 14 post(s)		Originally Posted by: VAer1 Thanks. Is pension taxable? depends https://www.kiplinger.co...-your-pension/index.html Originally Posted by: VAer1 Originally Posted by: roger.d Originally Posted by: VAer1 There are some congress members retiring younger than 50 yrs old, how does it work? Take House Speaker Paul Ryan for example, he is only 50 yrs old in 2020, but he retired before age 50. They are under the same FERS rules How? Which rule applies in below article? Retired before age 50 and start collecting pension at age 50? Which retirement type? https://www.cnbc.com/201...e-average-americans.html https://www.marketwatch....what-hell-get-2018-04-12 congress plays by a different set of rules but still under fers. where do you work? Edited by user Tuesday, September 1, 2020 5:33:09 PM(UTC) \| Reason: Not specified

VAer1		#45 Posted : Tuesday, September 1, 2020 5:32:57 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		Originally Posted by: postalvet Originally Posted by: VAer1 Thanks. Is pension taxable? depends https://www.kiplinger.co...-your-pension/index.html State tax is smaller than federal tax. the question is more about: is pension taxable by federal government?


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postalvet		#46 Posted : Tuesday, September 1, 2020 5:34:13 PM(UTC)
Rank: Guest Groups: Guests Joined: 2/6/2014(UTC) Posts: 33,037 Was thanked: 14 time(s) in 14 post(s)		Originally Posted by: VAer1 Originally Posted by: postalvet Originally Posted by: VAer1 Thanks. Is pension taxable? depends https://www.kiplinger.co...-your-pension/index.html State tax is smaller than federal tax. the question is more about: is pension taxable by federal government? yes

VAer1		#47 Posted : Tuesday, September 1, 2020 5:47:54 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		I seriously doubt if pension fund is sustainable. I also doubt the future of Social Security retirement. I feel insecure about the system.


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TheRealOrange		#48 Posted : Wednesday, September 2, 2020 4:37:23 AM(UTC)
Rank: Senior Member Groups: Registered Joined: 5/22/2011(UTC) Posts: 899 Thanks: 1 times Was thanked: 167 time(s) in 146 post(s)		Originally Posted by: VAer1 There are some congress members who retired younger than 50 yrs old, how does it work? Take House Speaker Paul Ryan for example, he is only 50 yrs old in 2020, but he retired before age 50. Congress has different criteria. Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service; age 50 with at least 20 years of service; or at any age after completing 25 years of service. The computation is also different. They must have at least at least 5 years of service as a Member of Congress, and the computation is: • 1.7% of their high-3 average salary multiplied by their years of service as a Member of Congress or Congressional Employee which do not exceed 20; plus • 1% of their high-3 average salary multiplied by their years of other service. So a Member with 35 years of total service would receive an annuity multiplier of 49% (20 x 1.7% = 34%, plus 15 x 1% = 15%). The minimum congressional salary has been $174,000 since 2009, so with that high-3, the annuity would be $85,260. It looks like Paul Ryan left office when he was 48 when he left office. At that age and with 20 years as a Member of Congress, he would not qualify for an immediate retirement annuity. From what I've read, he qualified once he turned 50 years old. His speaker pay was $223,500, so if that was his high-3 and he had 20 years as a Member, his annuity would be roughly $75,990. He apparently had time as a congressional staffer, so his final annuity is said to be $84,930.


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GordonG		#49 Posted : Wednesday, September 2, 2020 6:34:51 AM(UTC)
Rank: Senior Member Groups: Registered Joined: 1/26/2013(UTC) Posts: 4,279 Location: Paradise Thanks: 886 times Was thanked: 1181 time(s) in 837 post(s)		@ VAer1...there's only ONE website that will give you definitive answers to your questions... OPM.GOV You can go to CNBC...Marketwatch...Kiplinger's...whatever. Read and study the FERS retirement and then come here and ask your questions. As for your insecurities about the system? What can anyone here say? Don't worry? Is that going to help you? Get some uninterrupted time...turn off the TV...shut off your phone...have a pen and paper ready for notes and for questions you may have for here...and study... https://www.opm.gov/reti...rvices/fers-information/ Good luck and oh yea... Don't worry...:D
		Life is Sweet


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roger.d		#50 Posted : Thursday, September 3, 2020 7:01:08 AM(UTC)
Rank: Senior Member Groups: Registered Joined: 8/25/2016(UTC) Posts: 5,136 Location: Midwest Thanks: 137 times Was thanked: 971 time(s) in 789 post(s)		Originally Posted by: VAer1 I seriously doubt if pension fund is sustainable. I also doubt the future of Social Security retirement. I feel insecure about the system. https://www.opm.gov/abou...rformance/other-reports/ You can see the numbers in the CSRDF Annual Reports. The balance is ever growing.
		Those who are, know those who are not. If you think they are after you, what did you do wrong?


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GWPDA		#51 Posted : Thursday, September 3, 2020 8:24:32 AM(UTC)
Rank: Senior Member Groups: Registered Joined: 2/26/2011(UTC) Posts: 2,565 Thanks: 268 times Was thanked: 555 time(s) in 456 post(s)		As for Social Security (and Medicare) the President of the United States has just unilaterally removed funding for both, for all civil servants, from the 2nd payperiod of September thru the end of the year. That's what "payroll taxes" fund. His promise, for what it's worth, is that he will then, if re-elected, cancel repayment of the tax, and further, cancel collection of payroll taxes altogether. Under this "plan" according to the Social Security Administration's Chief Actuary, Social Security will be out of money entirely by 2023. Some plan.

1 user thanked GWPDA for this useful post.		SD Analyst on 9/4/2020(UTC)
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VAer1		#52 Posted : Thursday, September 10, 2020 4:43:36 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		Does OPM policy of Voluntary Early Retirement Authority (VERA) or MRA+30 remain the same for long period of time? During the past 30 years, does OPM adjust the number? Or the policy stays relatively as it was? I am not sure if OPM will change any policy before I am ready for retirement. Thanks.


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postalvet		#53 Posted : Thursday, September 10, 2020 4:45:57 PM(UTC)
Rank: Guest Groups: Guests Joined: 2/6/2014(UTC) Posts: 33,037 Was thanked: 14 time(s) in 14 post(s)		Originally Posted by: VAer1 Does OPM policy of Voluntary Early Retirement Authority (VERA) or MRA+30 remain the same for long period of time? During the past 30 years, does OPM adjust the number? Or the policy stays relatively as it was? I am not sure if OPM will change any policy before I am ready for retirement. Thanks. as far as I know however one should never wait for early out as they are not that frequent.

VAer1		#54 Posted : Thursday, September 10, 2020 4:48:33 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		Originally Posted by: postalvet Originally Posted by: VAer1 Does OPM policy of Voluntary Early Retirement Authority (VERA) or MRA+30 remain the same for long period of time? During the past 30 years, does OPM adjust the number? Or the policy stays relatively as it was? I am not sure if OPM will change any policy before I am ready for retirement. Thanks. as far as I know however one should never wait for early out as they are not that frequent. At least I can go with MRA+30, which still in my 50s. Hope they don't change it to MRA+35 or something else. I would be very happy if OPM allows early retirement at age 45 :) and agency offers the VERA; If changing MRA from 57 to 50, I would take MRA+10 (actually I will have more than 20 yrs of service by age 50). However, my question is more about: has the policy remained the same for long period of time? Or OPM has made some changes over the time? Edited by user Thursday, September 10, 2020 5:01:25 PM(UTC) \| Reason: Not specified


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roger.d		#55 Posted : Thursday, September 10, 2020 7:24:43 PM(UTC)
Rank: Senior Member Groups: Registered Joined: 8/25/2016(UTC) Posts: 5,136 Location: Midwest Thanks: 137 times Was thanked: 971 time(s) in 789 post(s)		I believe the answer is that it has always been MRA +30 years, age 60 and +20 years, age 62 and +10 years. Now, what MRA is has changed over the years. I can't comment on what a VERA might be. I might be different from agency to agency.
		Those who are, know those who are not. If you think they are after you, what did you do wrong?


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VAer1		#56 Posted : Thursday, September 10, 2020 7:30:31 PM(UTC)
Rank: Groupie Groups: Registered Joined: 1/27/2020(UTC) Posts: 82 Location: Washington DC Thanks: 2 times		Originally Posted by: roger.d Now, what MRA is has changed over the years. Good to know about that. But it is 62+5 yrs Who knows, maybe in the future, national debt is too high, and agency funding will be cut significantly. Then they will adjust the retirement policy and make it easier for people to retire early. Edited by user Thursday, September 10, 2020 7:40:47 PM(UTC) \| Reason: Not specified


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roger.d		#57 Posted : Thursday, September 10, 2020 7:41:05 PM(UTC)
Rank: Senior Member Groups: Registered Joined: 8/25/2016(UTC) Posts: 5,136 Location: Midwest Thanks: 137 times Was thanked: 971 time(s) in 789 post(s)		I'm guessing you have seen this chart for MRA: 1947 or earlier 55 years 1948....55 years, 2 months 1949....55 years, 4 months 1950....55 years, 6 months 1951....55 years, 8 months 1952....55 years, 10 months 1953–1964.......56 years 1965....56 years, 2 months 1966....56 years, 4 months 1967....56 years, 6 months 1968....56 years, 8 months 1969....56 years, 10 months 1970 or after....57 years At some point, they might change it to "after 2010 age 58" etc. That might happen if the MRA for SS is raised above age 62. ETA: yes, I should have typed age 62 and 5 years of service. Not 10 years. Have your read to link I provided in post #50? There is no shortage of money in the CSRS and FERS systems. Unless you consider that congress has likely spent it all. As there is no account at Citibank, Chase or where ever that has the money in it. Edited by user Thursday, September 10, 2020 7:44:57 PM(UTC) \| Reason: Not specified
		Those who are, know those who are not. If you think they are after you, what did you do wrong?


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teeeeej		#58 Posted : Friday, October 30, 2020 6:30:40 PM(UTC)
Rank: Senior Member Groups: Registered Joined: 2/22/2013(UTC) Posts: 440 Was thanked: 49 time(s) in 44 post(s)		Originally Posted by: VAer1 Originally Posted by: EagleDog Originally Posted by: VAer1 How about at age 62 and beyond? At age 62, the FERS Special Retirement Supplement payments would stop. Your $1000 FERS pension would be eligible for COLA's. You could choose to start collecting Social Security. Thanks for detailed information. Now I have some basic ideas about how it works. Now I have some conclusions. If early retirement at age 50 with 20 years of service, there is not much annuity(not too many years of service). And it is even worse that no COLA for whole 12 years, if CPI is high during those years, then my initial annuity will become almost nothing when I turn to 62 yrs old. Unless they change policy and let annuity to be increased for COLA every year before age 62, it is hard for people to accept early retirement at age 50. Not sure what kind of people wants to retire at age 50 while annuity cannot be increased for 12 years. The kind of person that wants to do something else and have lifetime FEHB? Or who has sufficient other assets? If they offer me VERA, I'll 100% take it. If I can target a position or agency that is better known for VERA, I'll 100% pursue that. I won't hit 20 years until I'm 53. And if I can't get VERA, I'll begrudgingly go out at 57 with the 25% annuity reduction (or postpone the annuity/FEHB), which sucks, but I'm not working until 60. Unless I really love my job or am in financial shambles....


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GordonG		#59 Posted : Friday, October 30, 2020 7:14:13 PM(UTC)
Rank: Senior Member Groups: Registered Joined: 1/26/2013(UTC) Posts: 4,279 Location: Paradise Thanks: 886 times Was thanked: 1181 time(s) in 837 post(s)		It looks like you'll have 25 years at age 57. Or is that 24 years? If that's the case you'll be subject to a 30% penalty. Let's do a little math. We're going to assume a high-3 of $60,000. 1% of $60,000 is $600. $600 multiplied by 24 years equals $14,400. Subtract 30%...$4,320 leaving you a grand total of $10,080 per year. Divide that by 12 months and you'll gross $840 per month. Subtract 25% for taxes...just a rough number that I used...leaving you $630. And we haven't mentioned... Life insurance? Health insurance? It's an eye opener.
		Life is Sweet


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teeeeej		#60 Posted : Friday, October 30, 2020 8:19:50 PM(UTC)
Rank: Senior Member Groups: Registered Joined: 2/22/2013(UTC) Posts: 440 Was thanked: 49 time(s) in 44 post(s)		Originally Posted by: GordonG It looks like you'll have 25 years at age 57. Or is that 24 years? If that's the case you'll be subject to a 30% penalty. Let's do a little math. We're going to assume a high-3 of $60,000. 1% of $60,000 is $600. $600 multiplied by 24 years equals $14,400. Subtract 30%...$4,320 leaving you a grand total of $10,080 per year. Divide that by 12 months and you'll gross $840 per month. Subtract 25% for taxes...just a rough number that I used...leaving you $630. And we haven't mentioned... Life insurance? Health insurance? It's an eye opener. I would have just over 24 years at 57. Yeah. It's rough. Is the penalty 6% per year rather than 5%? My bad. It would probably make more math sense to fend for myself on Health Insurance for 3 years (can FEHB COBRA for half of that) and do the postponed annuity to start it at 60. My high 3 will be higher than $60k though, especially when you consider there are two more decades of COLA. If I did stick it out until 60, I would get the FERS supplement for 2 years, if they don't get rid of it. Edited by user Friday, October 30, 2020 8:21:10 PM(UTC) \| Reason: Not specified


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