- 37 years old
- 130,000 salary, software developer
- Security clearance
- Live in low cost of living area
- 2.5yrs as a federal employee
- 4 yrs as a defense contractor
- 200k saved for retirement (2045 and 2050 Vanguard Target Retirement Funds)
- 401k with 6% match
- 1 spouse (SHM for now, but will return back to teaching position [position provides a pension])
- 1 baby
- $800/mo mortgage (started in 2014)
- Would like to retire at 60
Very hard to fill my position...many open positions (get about 3 calls a month from recruiters) and believe I can get 150k (i've been too chicken to accept 140k offers as I'd have to start over on my accrued leave) now.
Question: At what point does it make sense to go the federal employee route? I was saddened to hear that you now have to contribute 4.4% to annuity (I was not able to get grandfathered in to the earlier 0.8% contribution because I only had 2.5yrs invested).
According to the Vanguard Retirement Income calculator, if I want to retire at age 60, and I save 23% of my salary every year until then, and want to live a lifestyle at 68% of my current income, with 7.4% annual return from investments, I may have a monthly income of $7,756 in today's dollars, This puts me slightly ahead of what the calculator says I may need ($7,367).
However, assuming a salary of 110000, retirement age 60, with 25 years of civil service, and only save 14% of my salary (15k/yr) and with an income replacement of 80% in retirement, the calculator says I may have $7,925 in today's dollars in monthly retirement income.
The pension really does seem to trump the high contractor salary.
Thus, I wanted to double check this with you guys. It seems the federal annuity is really the key here. It doesn't matter how much I try to save towards retirement as a contractor (nor the salary quite matters) because at the end of the day the tortoise pension is going to come out ahead.
Am I wrong in my assessment?
Calculator link: https://retirementplans.vanguard.com/VG ... meCalc.jsf