do you know how much post tax money they take from every paycheck to contribute to FERS?
And, if you seperate from the VA with 10 years and return at 61 and retire there at 62 do you get the healhcare benefits?
Fers is not good anymore since Obama and the dems changed in after Dec 31 2012
4.4% post tax contributions for new employees compared to 0.8% post tax pre 2013.
The healthcare is more important if your want to game the system and start the Va later in ur career to maximize ur private practice income.
Yes. U only need to jump back into the Va for one year after being vested after 5 years to the the healthcare at age 62.
The Va pension payout is heavily taxed as well. And only a tiny portion of it is not taxed. (1986 tax law changed)
“How FERS Pensions Are Taxed Today
Since inception, FERS has required a pro-rata "cost recovery" method rather than a front-loaded tax-free recovery:
1. Pro-Rata Exclusion: Every single monthly FERS payment is split into a taxable portion and a tax-free portion from day one.
2. The Tax-Free Part: The Office of Personnel Management (OPM) calculates a small tax-free amount for each check based on your total lifetime after-tax contributions divided actuarially across your expected lifespan (using the IRS "Simplified Method").
3. The Taxable Part: The vast majority of your monthly FERS pension is taxed immediately as ordinary income because it represents government-funded contributions and investment earnings.
4. Full Taxation Later: Once you live long enough to collect the total sum of your original after-tax contributions, that small tax-free exclusion stops, and 100% of your pension becomes taxable.”