Paul: What am I paying into my retirement? This is a chart that's actually showing you what you're paying into your retirement right now.
Most people that are at retirement age are under the first chart, where you're paying 1.45% – that's what you're paying into Medicare. You're also only paying .8% into your FERS monthly annuity, your pension. Social Security, you're paying 6.2% and if you're putting in 5% into TSP, a total of 13.45% of your income is actually going into your retirement system; and that's an annual out-of-pocket or right off the top of your income right now of $11,477.
If you are one of the FERS RAE, so you were hired after 2013 or even after 2014, the only difference is gonna be on the retirement, and those that were hired in 2013, theirs is 3.1%. Those hired after 2014, they're paying 4.4% into the retirement system, and you will see that they're paying anywhere from 15.75% of their gross salary up to 17.05% of the gross salary of those that were hired after 2014. So their annual cost is between $13,432 up to 14,537.
Now one reason this is important is when you get ready to retire and you're trying to get as close as you possibly can to what you're living off of right now. We wanna get to what your true replacement income will be. If you will notice, under your gross income as a FERS employee, your income was $85,000, but under the normal retirement cost right now for people that were hired before 2013, that retirement cost is $11,477.20, so that's subtracted right off of the $85,000.
So basically, this $73,522.80 is what you are living off of, not the $85,000. Now this $73,522.80 will still be taxable income, and your benefits will also come out of this. Things like your health insurance. So when we're doing your retirement paperwork to find out what you're gonna be making into retirement, these are the figures that we wanna get close to, to try to get you as close to possible to what you're living off of right now.
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