The Federal Employees Retirement System, a.k.a. “FERS,” is the special retirement plan that all U.S. civilian employees (think: federal government workers, with the exception of military; they’ve got their own thing) are entitled to. If this is your first time hearing about it, that’s probably because you’ve been floating around in the private (rather than public) work sector.
So what's all the fuss about FERS? Want to know what your Congressmen and women are getting in retirement, even if they do a bad job at getting anything done? Federal workers have a fixed-amount pension plan, meaning the money they put into the system doesn’t determine what they get out of it later (which is how it is in the private sector).
So how is that amount of retirement benefits determined? The longer you’re “serving” the federal government, the more you’ll get, and the higher up you are, the more you’ll get. There’s something in the federal public sector called the “high-3,” which is the highest-ranking federal job you’ve had for three years. Since most people climb the public ladder (just as folks climb the corporate ladder), their high-3 is usually their last job before they retire (or move to the private sector).
The basic calculation for the Federal Employee Retirement System is: High-3 salary x Years on the job x Pension multiplier = Annual pension payout. That doesn’t include any bonuses, overtime, or other extras, but them's the basics of FERS.
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Finance: What is a Coverdell Education S...11 Views
Finance a la shmoop what is a Coverdell education savings account? Coverdell...[Man using a red umbrella]
nope not an umbrella for the farmer in the well what is a Dell anyway? uh no
different Dell remember farmer in the Dell? all right moving on
Coverdell was the senator who named this type of tax deferred savings account and
note it's tax deferred not tax free maybe that is you might put two grand a
year in this account and you don't pay tax on it this year it just gets
invested and it grows just like a 401k account and an IRA and a Roth more or
less but then when you withdraw the money you don't pay tax on it if you use [Cash withdrawn from ATM]
the dough for school that is for like private school fifth grade books and
uniforms or that no athletic scholarship in the Ivy League tuition at Princeton [Man walking towards college building and football hits his head]
Or the iPad app suite from shmoop yeah
you could spend it on us we'd appreciate it thank you if you don't spend the
money on education well then you get taxed in the normal way as if it's
ordinary income there are all kinds of restrictions in this plan like there's a [Restrictions appear]
max of two grand contributed per kid who benefits from it the dough has to be
distributed fully by the time the kid is thirty or go to others in the family for
education and if your family makes too much money like you work too hard you're
too successful well you might have to cover your own Dell yeah so yeah it's a [Man walking along with a Dell laptop]
great option for some and an excellent way to attend the school of your dreams
while temporarily staving off the taxes of your nightmares if you're really lost
or something to spend it on you know think of your friends here at shmoop...
we're happy to take your dough
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