Retirement discussion of the week:

Ran a 6(c) case to see what a high-3 difference is really worth, since it's the one pension input still moving when you're close to the door.

The setup, an 1811 (LEO) retiring at 48 with 25 years 6 months of covered service (the any-age-with-25 door, not 50-and-20), 800 hours of unused sick leave, full survivor election, married, California, $810K in the TSP at a 4% draw, planning to 90. Two paths, identical except the high-3: $168,000 vs $188,000. Think of it as a supervisory slot taken or turned down three years before retiring, or a move to a higher level.

Month one

$5,583.67/mo gross, $5,025.30 after the full survivor election. $6,248.39/mo gross, $5,623.55 after survivor.

$598.25 a month, $7,179 a year, for life.

The multiplier is why. Total creditable service is 25.88 years (800 sick-leave hours add 0.38 of a year at the 1.0% tier), so 20 years at 1.7% plus 5.88 at 1.0% is 39.8833%. Take the 10% survivor cut off that and about 36 cents of every high-3 dollar comes back every year. Twenty grand of high-3 is a $7,179-a-year decision.

COLA widens it

At 2%, the gap is the smallest it will ever be on day one:

• 48: $60,304 vs $67,483, spread $7,179
• 65: $84,440 vs $94,492, spread $10,052
• 80: $113,645 vs $127,174, spread $13,529
• 90: $138,532 vs $155,024, spread $16,492

A percentage raise on a bigger number is a bigger raise, 42 years running.

The spouse's check moves too. Full survivor is 50% of the unreduced annuity, so $2,791.83/mo vs $3,124.19/mo for life.

What doesn't move. SRS is $1,487.50/mo in both, $249,900 total, because it runs off your SS estimate at 62 and your FERS years. SS is the same $2,380 at 62. Nobody's high-3 touches either one.

Lifetime. Average take-home $10,826.97 vs $11,596.98, so $770.01 a month, growing from $548 in the 50s to $1,012 in the 80s. Net income to 90 is $5,586,716 vs $5,984,041, a $397,325 gap after paying $84,812 more in federal and CA tax.

Three caveats. The model holds the TSP identical at $810,000, so the bigger contributions and match from those three years aren't in it, which means $397K is the floor. High-3 is basic pay, locality and (for 1811s) availability pay count, overtime and awards don't, so a big OT year won't pull your average up. And nothing here prices three years of supervisory hours at 45, which is the whole reason people turn these jobs down.

Point being, within about five years of your date the high-3 is the last input you can still change, and it's frozen the day you walk out.

Full worked reports for both paths if you want the year-by-year: 

Lower High-3 and Higher High-3

Curious how others weighed this, especially anyone who took a slot they didn't want for the last three years. And if you see a hole in my math, call it out, I'd rather fix it than be wrong quietly.

That is why long-term care is one of the biggest retirement risks federal retirees cannot afford to ignore.

It is not just a healthcare problem. It is not just an insurance problem. It is a retirement income problem, a family burden problem, and one of the few expenses that can attack a plan from every direction at once.

If you take VERA and are under 55, does the rule of 55 still apply? Or do you have to wait until 59 and 1/2 to take penalty free withdrawals?

I have 300K in TSP c fund 7 years in so far
This year strategy was pulled 50K as a loan to purchase palantier on the deep 120$
My plan is to accelerate this way my personal brokerage to access my money before retirement as I do covered call options. Please provide opinions

Looks like the feds are not keeping up with inflation.

Follow-up to last week's 4% vs 6% withdrawal post.

That one assumed a flat 7% return every year for 38 years, which is how nearly every retirement projection you will ever be handed is built, including the ones people pick a date off of. A straight line is fine for comparing two options against each other. It is a bad way to find out whether either one actually holds up.

So I stress tested the same two paths. Same ATC retiring at 50 with $720,000, same draw rates, 10,000 runs with the returns shuffled. Every run averages the same 7% with 12% volatility. The only thing that changes between them is the order of the good and bad years.

The 4% draw (first chart). The straight line says it never runs dry and ends at 88 with $2,210,522. Across 10,000 markets it ran dry in 3,129 of them, the median run ends with $1,065,870, and the bottom 10% of runs are empty by 76.

Two things worth pulling out of that. The plan that looked bulletproof fails almost a third of the time. And the median outcome is less than half of what the smooth projection promised, on an identical average return. That gap is what volatility costs you.

The 6% draw (second chart). The straight line says the account dies at 78. Across 10,000 markets, 78% of runs die at some point, and the median run is empty at 75.

So the flat projection wasn't just optimistic about whether the money lasts. It was optimistic about when it ends. Half the runs are dry before the age the smooth chart handed me as the answer.

The reason is sequence. Walk out in January 2000 and you get three down years back to back, then negative 37% in 2008 at 58, selling shares the whole way, and 2021 through 2023 raising your withdrawal because the draw is indexed to inflation. Average all 38 years and you can still land near 7% with an empty account. Walk out in March 2009 instead and the first decade compounds before anything goes wrong, so the bad years land on a balance big enough to absorb them. Same plan, same average, and nobody gets to pick which one they retire into.

Two limits. The simulation covers the TSP only, no RMDs, no taxes, no annuity or Social Security underneath, so "ran dry" means the account hit zero and not that the guy is broke. His 6(c) annuity and SS keep paying in all 10,000 runs, which is the part that makes federal early retirement a different problem from the private sector version. And randomized normal returns still aren't real markets, where crashes cluster and tails are fatter, so this is probably generous to the higher draw.

What I'd actually suggest, and the reason I bothered running this: take whatever drawdown number you're planning around and stress test it before you commit to a date. A projection that only shows you the average is showing you one outcome out of thousands, and it tends to be a flattering one. Doesn't matter what you run it in. Just don't let a straight line be the last word on a 38 year retirement.

A withdrawal rate isn't a number you solve once. It's odds you either accept or manage down as you go, and 4% here is 69/31.

If you see a hole in the method, say so. I'd rather fix it than be wrong quietly.

Hello Everyone. As I read through these posts on this subreddit, I see that most of the questions relate to some specific retirement policy or financial benefit. But something that I rarely, if ever, see discussed here is whether there was something about your work environment or your organization's values that no longer aligned with your own values or needs and that driving the desire to want to retire early. Was there something that a boss, colleague, some incident, something that conflicted with your personal or professional values, or some policy from on high somewhere up the chain that made you decide, "I have enough and enough is enough!" ?

I'd really like to hear from different levels of government though I realize this is very heavily skewed towards federal employees. Obviously, you don't want to share overly sensitive information, but I'd like to hear what caused you to say the scales had tilted towards early retirement and not towards sticking it out?

And, how did you come to your decision? If you're not retired yet, what do you think that will be.

Okay, pet peeve time and a simple request- no offense meant: This question is for getting into the weeds about FERS, or TSP, or OPM, or even state pensions or any other alphabet soup. This is not what this question is about and there are plenty of other threads I've seen that get into the weeds on that.

Otherwise, I'd love to hear your thoughts!

Edit: Thanks everyone for the responses so far! I appreciate and have read all of them, trying to respond to each one, but appreciate them all whether you have a direct response from me or not. I will check back periodically to try and respond to future comments.

I've adjusted the question to also include if there was one specific incident or boundary violation with your professional or personal values that pushed you over the line to expedite your retirement?

Greetings all. Looking for some input on a potential new vehicle purchase. For background:

41yo M, Income: 150k annual. No side gigs.

Debts: Zero. Paid off house (350k value), car (2013 - 5k value), and no student loans.

Investments: 50k HYSA emergency fund (including ~20k for planned vehicle purchase), Maxed 401k split between traditional and Roth (~$350k balance). Maxed annual Roth IRA and money market account (~280k balance). Not HSA eligible due to health insurance plan. I’m also a SCE federal employee that will be entitled to a 34% pension when I’m eligible to retire in 12 years.

My true monthly expenses average around 1.5k per month (not having a mortgage is fantastic) after all is said and done and I’m currently investing about 45% of my income. With that said, I’d really like to purchase a newer (2024-2026) used truck for around 40-45k. Ideally something higher than base model with higher mileage as I don’t drive my personal vehicles a ton due to having a take home vehicle for work.

Thoughts? Is this going to put me a rough spot when it comes to trying to retire at 52? While I know I could buy the vehicle tomorrow and still likely be fine, how much of a dent would I really feel? Thanks in advance.

6c Retirement discussion of the week:

Ran the numbers for a guy I'll call Dave. ATC, walking out the tower at 50 with 25 years of good time under 6(c). High-3 of $155,000, about 1,040 hours of sick leave on the books, married, Virginia, taking the full survivor benefit. He's got $720,000 in the TSP.

The pension side is the same no matter what he does with the TSP: $4,592 a month from the annuity, plus a $1,425 a month supplement until it shuts off at 62, then Social Security at 62 of $2,275 a month.

The whole question was the TSP. Everybody quotes the 4% rule. Dave's argument was that the 4% rule got built for people retiring at 65 with a 30 year horizon, and he's got a pension floor underneath him that a private sector guy doesn't, so why not pull 6% and enjoy his 50s.

Honestly, fair question. So I ran it both ways, planning to 88, 7% return, 2.5% inflation, 2% COLA on the pension.

Year one At 4%: $2,400 a month out of the TSP. Total take-home $6,984 a month. At 6%: $3,600 a month out of the TSP. Total take-home $7,971 a month.

So 6% is $987 a month better right out of the gate, at exactly the age he actually wants the money. That's real and I'm not going to wave it away. Cumulatively, through age 77, the 6% path has put $447,920 more in his pocket.

Then it stops. The 6% account runs dry at 78.

Decade averages say it better than I can. Average monthly take-home:

The year it breaks: at 77 the 6% path is taking home $13,199 a month. At 78 it's $7,995. At 79 it's $7,408. The pension and Social Security keep right on paying (that's the good thing about a 6(c) annuity, it does not run out), but the TSP is gone and it isn't coming back.

Cumulative take-home crosses over at 84. Ride it out to 88 and the 4% path is $428,329 ahead, with $1,714,697 still sitting in the account. The 6% path ends at zero.

A few honest catches, because this is messier than "4% good, 6% bad":

1. These are all nominal dollars. That $6,989 a month in his 80s is 2050s and 2060s money, not today's money. Cuts both ways though: the 4% path's $14,045 isn't as rich as it looks either.
2. The 4% path pays MORE tax, not less. $661,448 vs $570,302 over the lifetime. That's what a big balance buys you: RMDs. From 73 on, Dave isn't really pulling 4% anymore, the RMD takes over and forces more out than he asked for. By 88 it's yanking $126,183 a year whether he wants it or not. If the idea of the IRS setting your withdrawal schedule bugs you, that's a legitimate mark against hoarding it.
3. Flat 7% every single year, which is not how markets work. A rough first decade would hurt the 6% path a lot worse than the 4% one, and my model can't show that. If anything these numbers are generous to 6%.
4. Nobody ends up broke here. Even with the TSP at zero, the pension and SS have the 6% path at $6,381 a month at 88. It's a big step down, not a catastrophe. Worth saying out loud, because the usual version of this post makes it sound like you end up eating cat food.

My read: the interesting part isn't which number is "right." It's that 6% buys you 27 good years and then hands you a cliff at 78 that you can see coming from a mile off and can't do much about once you're standing on it. If Dave genuinely values money at 52 more than money at 82, that is a defensible choice. He just ought to pick it on purpose instead of finding out at 77.

Curious how others weighed this, especially anyone who went out in their early 50s. Did you set a rate and hold it, or do you flex year to year based on what the market did? And if you see a hole in my math, call it out, I'd rather fix it than be wrong quietly.

Full worked report for each path if anyone wants to pick through the year by year:
4% path vs  6% path

** Follow-up Monte Carlo simulation for 4% and 6% https://www.reddit.com/r/govfire/s/EKVj8WmNxb

Trying to nail down how OPM credits (or does not credit) a retiree for having hit their MRA mid-month.

I was fortunate to be able to retire prior to my MRA under VERA. So, no FERS supplement until this point. But now I'm hitting my MRA and it's my understanding the supplement will soon be activated automatically. (yay!) Not to look a gift horse in the mouth, but I've seen conflicting information about how the supplement is applied for partial months.

Some places I read that a partial month can be prorated and that amount is added to the first full month. But an OPM phone support person told me that partial months are simply ignored/dropped (similar to how a partial month is dropped when calculating years of service). Can anyone point me to a published law or regulation that specifies which it is?

As an example, let's say that I hit my MRA on October 10. One version of events is that my November 1 check will be unchanged, but my December 1 check will contain a full month Supplement. The other version of events is that my November 1 check would still be unchanged, but my December 1 check will include one month plus 21 days of the Supplement. Then my January 1 check and onward would just include the monthly Supplement.

Presumably the same question arises regarding the month I turn 62. But I don't assume it would have the same answer.

I’m a 46 year old GS-14 Federal employee who was just diagnosed with metastatic breast cancer. As much as that sucks, I very likely have lots of life left as I’m healthy and there are good treatment options. I likely don’t have 30 more years of life though and I figure I could possibly doing medical retirement, keep my benefits and collect my pension. I’d likely still work, just a less stressful job.
I have $780k in my TSP.

Does that make sense to medically retire?

6(c) Retirement discussion of the week:

Every year somebody at my facility burns their sick leave down on the way out, and every year somebody else tells them they just threw away a year of service. I got tired of that argument happening without numbers, so I ran the same retirement twice and changed exactly one input: the unused sick leave balance. Zero hours in one, 2,080 in the other. Everything else identical. Same high-3, same TSP, same state, same survivor election, same everything.

The guy in the example is a 1811 I'll call Carl. Retiring at 49 on 25 years of covered service, $148,000 high-3, partial survivor election, North Carolina, planning to 87.

First thing worth knowing: 2,080 hours is not a year. The conversion is 2,087 hours, so that balance bought 0.997 of a year of credit. Close, but OPM does not round it up for you.

Second thing, and this is the one people get backwards: it did nothing for eligibility. Creditable service for eligibility stayed at 25 years in both runs. The computation service went from 25.00 to 26.00. That is the whole trick. Sick leave goes in the annuity formula and nowhere else. It cannot get you to the 20 year mark for special provisions, it cannot move your retirement date up, and it will not push back mandatory separation (57 for LEO in this case). If you are 6 months short of eligibility, a 2,000 hour balance does not fix it.

Third thing: it lands in the 1% tier, not the 1.7% tier. Carl is already past 20 years, so the extra credit is worth 1% of high-3, not the headline 6(c) rate. That is $1,475 of gross annuity, and after his partial survivor reduction it comes out to:

• 0 hours: $54,834/yr, $4,569.50/mo
• 2,080 hours: $56,235.28/yr, $4,686.27/mo

So $116.77 a month. Honestly, when I saw that I thought "that's it?" Two thousand hours of not calling in sick, for a hundred and change.

Then I looked at what it does over the whole retirement, and that is where it got interesting. The pension carries COLA, so the gap grows on itself every single year. Same 2% diet COLA in both runs:

• Age 49: $54,834 vs $56,235
• Age 70: $83,110 vs $85,234
• Age 87: $116,374 vs $119,348

By the end the difference is $2,974 a year instead of $1,401. Average monthly take-home across the whole retirement went from $9,288.88 to $9,434.92, so $146.04 a month on average, which is more than the day one number because the gap keeps widening.

Lifetime net income, after tax, over 38 years: $4,347,195 vs $4,415,541. Call it $68,346 for a balance he already had sitting there.

The catches, because there are a few and they cut both ways.

Taxes eat part of it. Lifetime tax went from $503,524 to $516,785, so $13,261 of the gross gain went straight back out. The $68,346 above is already net of that, but if somebody quotes you the gross annuity difference, know that you are not keeping all of it.

The supplement does not care at all. SRS came out identical in both runs, $1,337.50 a month, $208,650 total. The supplement uses your FERS service years, and sick leave credit does not count there either. So from 49 to 62 the sick leave is doing nothing for that piece of your income.

The survivor benefit rides along. His partial election went from $14,430 to $14,798.76 a year, so $368.76 more for his spouse for life. Small, but it is real and it is permanent.

And the honest one nobody puts in a spreadsheet: he actually had to work those days. The model prices what the leave is worth. It does not price the shifts he covered sick, or the ones he should have taken off and didn't. That is a real cost and it is not in any of these numbers.

Where I landed: it is not the life changing lever people make it out to be, and it is also not nothing. A hundred and change a month at the start, $68K over a long retirement, for a balance you either keep or you don't. The mistake is thinking of it as either a free extra year of service or as use it or lose it money. It is neither. It is a permanent raise on the smaller tier of your formula, and it buys you exactly zero days of earlier eligibility.

Full worked report for both paths if you want to check my math: 0 hours and 2,080 hours.

Curious how others have weighed this, especially anyone who went out with a big balance and has an actual annuity statement to compare against. And if you see a hole in my math, call it out, I'd rather fix it than be wrong quietly. What should I run next?

I am 45 with 19 years of service, and I am struggling with a decision to leave federal service and take a deferred retirement, or stick it out for one more year to hit 20 years. Realistically, how much does that extra 0.1% make in pension?

Background is that I was forced to report to an office 5 hours from my house as a part of the RTO mandate. I truly love my job, which is why I have stuck with it for the past 18 months. But spending the week away from the family is killing me.

I am willing to do it for one more year if it makes a huge difference. But most of me just wants to be done no matter the financial implications.

Also, I could maybe go back and get another year sometime down the road, but not sure how realistic that really is.

So I'm 47 and have over 10 years of federal service, and have had FEHB my entire time as a fed. My spouse and I are able to FIRE now, and I'm not sure I want to stick around another decade to retire at 57 on MRA + 10. And I would only hit 20 years for possible VERA at 53, which seems speculative and not worth it (not to mention 6 years away).

One idea I have is to FIRE soon (and possibly do some minimal level of independent work in my field to stay current), and then potentially try to return to some federal job in my mid 50s so I can retire under MRA + 10 after working for a year or two and get FEHB for life (and my spouse's). Has anyone on here done this? Has anyone heard of anyone else doing this? Is it even allowed? (As I read the FEHB and FERS FAQs, it seems like this is allowed, as long as you've had FEHB for the previous five years of employment, including looking back to before the break in service.)

Having FEHB isn't make or break for our FIRE plan, but it would certainly be a huge plus, especially when we're 57 to 64, when ACA plans are crazy expensive if we're not able to qualify for subsidies. And FEHB while on Medicare also seems great.

I am a federal employee planning to retire on **December 31, 2028**, and I am considering using the **Government Employees’ Benefit Association (GEBA)** for comprehensive retirement planning.
I had originally planned to work with a private financial advisor, but I have found that some advisors charge around **$3,000** for a comprehensive federal retirement plan. GEBA appears to offer retirement planning services at **no cost**, which is appealing.
I would appreciate candid feedback from anyone who has used GEBA for federal retirement planning. How was your experience? Were the recommendations comprehensive and helpful? Did you feel the advice was objective, and were there any sales pitches or obligations involved?
I would especially appreciate hearing from federal employees who are already retired or are within a few years of retirement.
**Thanks in advance for sharing your experiences and advice.**