FERS Ready
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Retirement scenario for the week:
The most expensive form a new ATC ever fills out isn't at the retirement seminar. It's the TSP election in week one.
Here's what I mean. Picture a 26 year old who just got hired, $68,000 salary, eligible to retire at 51 after 25 years of 6(c) service. I ran his retirement twice, changing exactly one thing: does he contribute 5% of his pay ($3,400 a year to start) or 15% ($10,200 a year to start)?
Everything else stays identical. Same 5% agency match in both runs. Same $4,170 a month pension. Same $1,181 a month supplement until 62. Same $2,700 Social Security at 67. One checkbox difference.
On the day he retires at 51, the 5% version has $589,170 in his TSP. The 15% version has $1,058,937. That's a $469,767 gap, and here's the wild part: only about $192,054 of it is extra money out of his own paychecks. The other $277,713 is 25 years of compounding.
In retirement it works out to $2,720 more take-home every single month, from 51 all the way out. Over his whole retirement that's $1,240,133 more.
The honest part: 15% means giving up around $6,800 a year of spendable pay to start, on a $68,000 salary. That's not nothing, especially with a young family. And a bigger traditional TSP means more taxes later ($513,051 vs $343,942 over retirement, already counted in those take-home numbers). This isn't free money. It's a trade, and the numbers say it's a very lopsided one. (I even gave him only 1% raises a year to keep it conservative.)
I ran this in FERS-Ready, the calculator built for 6(c) folks (ATCs, LEOs, firefighters), since OPM's own tool doesn't handle our rules. Estimates based on current law and the inputs shown, not financial advice. Run your own numbers and confirm with OPM/SSA before making a decision.
So here's my question for the group: if you could go back to your first week, what percentage would you tell yourself to put in? 👇
