Is it possible that your CSRS friends are older and do not wish to work, while your FERS friends are younger and are looking to supplement their income?
While they are slightly older than their FERS counterparts, it is the reason they are older which makes my argument.
In my world we are forced to retire at 57. In my years here I've seen the majority of the CSRS folks retire at mandatory, in part because they were dedicated employees and larger part because they desired to maximize their benefits and retirement percentage. Their FERS counterparts often retire earlier and therefore younger but it is not so they can start living the 'good life' earlier but rather because they understand their inability to survive on the FERS annuity alone so they must get a new job.
The absolute earliest a FERS employee here can retire would be 43 with 25 years in service assuming he/she was hired at 18 years old. What is more usual is that many who are hired are in their 20's and therefore can begin retiring in their mid to late 40's. Many of these FERS employees are retiring as soon as they are able with very few making it past their early 50's and while there are multiple reasons for this, a larger influencing force is their inability to survive on the significantly smaller FERS annuity.
Taking Ms. Flanagan's numbers from the article you sent out today, the average CSRS annuity is $55,608 while the average FERS annuity is $19,668. I think we can all agree that is a tremendous drop. One allows you to live a modest yet comfortable life while the other puts you slightly above the "poverty line" for a family of two at $16,020. If you still have kids at home or have more dependents at home, you are now below the poverty threshold as defined by HHS in 2016.
I think many, if not all, would take the promise of a guaranteed $55,000 annuity for life over the dream that is sold with FERS that if you take your FERS annuity, and combine your TSP along with Social Security you will come out ahead in the long run. Quite frankly I am not convinced SS will still be there and funding 100% when I am able to collect so I find that portion to be laughable. I understand the numbers behind why people feel FERS is superior but when you come down to the tangible benefit of a much larger monthly pay check for life, that is far more appealing to me and I suspect to many others.
I know we are talking simply the annuity and there are many other factors to consider such as TSP, private retirement savings, Social Security, etc..
In reality this is all an exercise in futility and fantasy as I am FERS, CSRS is long gone and there's nothing to be done about it. WE have what we have and we make the best of it.
Posted by: scott.ross@dhs.gov
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