USFS firefighter retirement scenario

Explain and cover a reasonable USFS firefighter retirement scenario.

One of the people I love and care about is just starting out with the USFS, so I want to generate a reasonable retirement plan for them. Firefighters tend to retire younger than most because of the job hazards, etc.

tldr;

Planning 25 years into the future is not an exact science, if you want to be SURE you hit your target, I recommend starting @ 20% contribution to TSP and in 10 years, re-evaluate.

If you aren’t yet sure you want out @ 50, then 15% should be fine.

The absolute bare minimum would be a 10% contribution, and the chances of being able to retire @ age 50 with a similar standard of living is low.

Firefighter career trajectory:

Starting as forestry technician aide at GS3 , moving to GS 8 or 9 by retirement.

So @ retirement, what is a reasonable job and pay?

A GS8/9 “Fire Management Specialist” a GS 9-11 makes $54,727 - $86,074 per year. So assume the middle of that range about 70k/yr (in 2022 dollars).

Firefighters usually retire at 20-25 years in at age 50, so we don’t have a lot of time to generate income for retirement.

Pension:

Annuity calculation: https://www.opm.gov/retirement-services/fers-information/types-of-retirement/#url=Early-Retirement

Normal pension

1 percent of your high-3 average salary for each year of service. So for 25 yrs of service, if you made 100k/yr, you would get $25k/yr in an annuity. And you don’t get Social Security apparently, so that kind of sucks.

70k x 1%=$700 * 25 years = 17,500/yr in pension

So a pension is worth about 25% of salary, gross. After standard deductions(like FEHB health insurance), it’s more like 12% of final salary.

so it would be more like:

70k x 12% = $8.4k/yr

In retirement, we want to maintain the standard of living at time of retirement, so we need to generate say 50k/yr total, after pension that’s 42k/yr we have to generate ourselves.

Firefighter special pension

1.7% of your high-3 average salary multiplied by your years of service which do not exceed 20.

so assuming age 50 retirement:

70k x 1.7% x 20 = 23.8k/yr + 70k x 1% x 5 years = 3,500

total: $27,300 minus deductions of around 13% = $23.7k/yr

50k - 23.7k = 26.3k

26.3k x 25 = 657,500

So we need to generate like 700k.

TSP plan

Site is at tsp.gov

They match up to 5%, in what basically amounts to $ for $.

Saving 10%, plus their 5% should get you about most of the way there, per their calculator.

Saving 15% might be enough.

Saving 20% should definitely get you all the way there.