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Are You Saving Too Much for Your Retirement?

Save so I can retire on time

Air Traffic Control Specialist
FAA
Wed Aug 9, 2006 9:23 AM

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I am lucky to be under CSRS and I plan to retire when elgible (regular retirement not 'good time' as I am not one of the highly paid field controllers but GS-14 type). I put away the max in IRAs, Thrift and then some in stocks. I also have stockpiled my sick leave and kept 240 on the books by my 4th year of employment some twenty years ago-- all because a senior controller gave me the advise of saving my raises, stockpiling my annual until I have the lose or use requirement and taking annual instead of sick leave. I owe no one except my mortgage, have a home worth over $600k, a nice car and nice lifestyle. Just because we get more money doesn't mean we need to spend it. For the last 10 years I have had the philosophy of questioning whether I really need this or that and the answer is usually no -- but when it is yes, there is nothing like writing a check for $27, 000 car! I see too many getting the latest Ipod, cell phone, a library of DVDs that they watch once or twice, etc. The X generation or others are going to have a tough retirement -- deaf from the Ipods and cell phone yelling, no money from the impulse purchases and "I want that" syndrome -- save then spend in retirement!

Re: Save so I can retire on time

HR Spec.
USDA
Wed Aug 9, 2006 1:20 PM
I am also under CSRS and have done everything you have described (maxed out on TSP, an IRA; stockpile sick leave to the tune of 2,200 hours so far, carry forward 240 hours of annual leave every year, etc.). The only difference is that my $140K house is now only worth $400K (shucks), I don't ever buy new cars and don't even own a cell phone.

Upon retirement, I plan to move to a low-cost area and buy a nice house out in the country. Mansions go for a mere $200K out there. I think my "problem" will be to figure out what to do with all that I've saved over the years. But I figure, what the heck, I'll have the rest of my life to "work" on it.

Re: Save so I can retire on time

Examiner
FDIC
Thu Aug 10, 2006 9:01 AM
Congratulations on forming good habits early, reaping the benefits of those habits, and anticipating a comfortable retirement! Maybe those in lower paybands will make noises that they cannot "afford" to put aside money, sick leave, and annual leave, but my question is - "If you want to retire and enjoy the rest of your life someday, can you really afford NOT to be thrifty now?"

I started putting aside the maximum in my FERS and FDIC 401k's on the day I was eligible, maxed out annual leave, and had tons of sick leave. Unfortunately, due to chronic health issues, I've had to use some of the SL, but since I'm FERS, I get -0- at retirement for that anyway. You can't beat good habits practiced over a long period of time.

You have made many wise, well-thought-out choices and should be proud. Hope you have many years of retirement to enjoy the fruits of your labors!

Value Of Defined Benefit Pension

ER Spec pretending to be an accountant
DoD
Wed Aug 9, 2006 11:58 AM

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I've never seen it written this way and I hope I am explaining this clearly, but a Federal pension of 40,000 per year paid out at retirement beginning at age 60 until death at 85 is equivalent to having 1 million dollars in the bank. With COLA, that mil is also inflation protected. The only down side is that it can't be inherited the way a real million in the bank can.

Anyone disagree?

Re: Value Of Defined Benefit Pension

HR specialist
Interior
Wed Aug 9, 2006 2:22 PM
Thanks for doing the calculations for me - it's something I've always known in my gut, but had never done the math on. We CSRS employees are fortunate, and I appreciate that!

Re: Value Of Defined Benefit Pension

Retired manager
HHS
Wed Aug 9, 2006 3:49 PM
re: the comment that a $40,000 annual pension paid over 25 years is equivalent to $1,000,000 in the bank. If I had a million bucks, I would hope to get more than a 4% annual return on the funds, which is what $40,000 would be. (Of course, as the writer points out, the pension would increase with COLAs.)

Re: Value Of Defined Benefit Pension

Analyst
Dod
Wed Aug 9, 2006 5:35 PM
Considering all that was done to obtain that money was showing up to work (and hopefully being a hard-working employee) for a certain number of years without ever having to save anything, it's not a bad deal. I bet most people would take it along with the COLA. It's no wonder the country is in debt.

Retirement Expenditures

Project Engineer
DoD (Navy)
Wed Aug 9, 2006 1:37 PM

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Discretionary spending may well decease with age, BUT medical expenses and toys (beds, chairs, etc.) will increase in spite of insurance.

Retirement

Contract Specialist
DLA
Thu Aug 10, 2006 6:07 AM

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My Grandparents are healthy and in their 80's and inform me that old people do not like to sit around doing nothing and tend to go on trips if they can. They seem to think that you cannot have enough money. Also if you hit 85 and still drive your car insurance goes up. If we start living to be 100 driving at 85 could be a reality.

Value Of Defined Benefit Pension

IT Spec
SSA
Fri Aug 11, 2006 6:01 AM

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CSRS employees paid 7% of their salary for the retirement "benefit". It was part of the overall package upon accepting employment. Sick and annual leave, health insurance, retirement plan were all benefits then. What we didn't have was flextime, comptime, AWS, FERS, TSP (and when TSP was established, there was not match for CSRS employees), tuition reimbursement. Benefits may be different now than they were for us long-time employees, but I don't think that we are to blame for the country's debt.

Re: Value Of Defined Benefit Pension

engineering tech/cwo(ret)
vha
Tue Sep 12, 2006 10:08 AM
I am csrs also and have the benefit of being retired from the navy with another (cola-protected) defined benifit pension plan which our "good" politicians like to say we didn't "pay" for. However, I am old enough and blessed with an excellent memory and I remember the "huge" pay raise in 1962 and Navy Times ran many articles stating that "it would have been larger but our pay was "imputed" to include a 6% retirement contribution and to save money (a familiar term for politicos) we did not get a larger raise and the retirement deduction and then have a "civil service-like" paper trail and its attendant expenses. I am retiring Jan 3, 2007, and thanks to the republican congress, will receive well over %50000/year thanks to csrs and military(22yrs) plans.

Too much retirement savings

Civil Engineer
Reclamation
Fri Aug 11, 2006 7:21 PM

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If it turns out that I have saved too much, I'll just drink and gamble away half of it. The other half I'll waste.

Retirement

program assistant
u.s. department of HUD
Fri Sep 1, 2006 10:19 PM

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I really enjoy the content of your articles. They are very informative and educational. I appreciate the time and energy that you have put into your column. Thank you and continue giving, it is appreciated.

Total Comments: 13
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