Federal employees make 27% less than their private sector counterparts, but experience poverty at lower rates. Knowing this, it would be foolish not to peek out and see what is out there, but to do so just for a higher paycheck before locking in a pension might be a mistake.
In this short article, we will:
- “Steel Man” the case for staying in the federal government
- Explore the right time to leave
- Consider a hybrid model for leaving
- ID the right time to exit
Why You Must Stay in Federal Service for Yourself, Not Your Country
This is going to be a benefits-driven argument, only. Before I “steel man” the argument, let’s define what steel manning is:
Steel manning is the practice of using facts to make someone’s argument stronger – the opposite of a straw man where you misrepresent an argument to make it weaker.
Example: If you think it may be better to sell your house and downsize, but don’t want to, find the reasons why selling may be better, and put forth the arguments in favor of what you don’t want. If what you want stands up to the strongest argument in support of the opposition, then you have steel manned the position. If it cannot face up to the scrutiny, it may be more like a tin man.
To me, staying in the federal government (Fed) is mostly about money and time.
I’ve made more in a non-supervisory government role than when I had an executive title in the private sector. My salary is higher than many business owners I know, and it’s very reliable. There’s a 5% match on my pension contributions. I get 13 sick days a year that can grow unlimited, allowing me to currently have about 8 weeks in the bank, and I accumulate 19.5 days of annual leave that will soon be 26! That’s over 5 weeks of vacation time per year, and it’s not impossible to take, nor is it discouraged.
Regarding sick time, if I need an operation, I can take a long convalescence to rehabilitate. If I have a stroke, my family will get paid my full salary potentially for months while my pension and TSP keep growing.
The other companies where I worked offered between 0 and 2 weeks off, no credit time, and no overtime.
Negative Experiences
As a federal employee, there are times when people get taken advantage of, which I’ll include in examples below, but my experience is that it’s much worse in the private sector.
Example 1 (Military)
Early in my time in the Marine Corps I wanted to take martial arts training up to the level of Black Belt Instructor. I’d been a martial arts instructor before joining and enjoyed it. However, two times when Green Belt classes were starting, I’d sign up and later find that “the roster got messed up.” The truth was that my squad leader took my name off the roster to prevent me from getting promoted to sergeant more quickly.
The loss of points to my cutting score delayed my promotion. Had there been a coordinated effort from higher-ups, they could have stopped me from getting promoted at all, and there would have been little I could do about it until negotiating for re-enlistment, which I wasn’t going to do.
Example 2 (Federal)
A Veterans Hospital employee I know was offered a temporary assignment to manage a department for 120 days. It should have included a pay increase, but didn’t.
When he sorted the matter out, he found out his boss didn’t officially promote him, and he was left in a very uncomfortable position – finish the work in an unofficial capacity, or simply stop fulfilling the role. A third option would be to take official action on the matter, likely winning the small difference in lost pay, but potentially causing a long-term problem in his employment trajectory.
He stuck with it while applying to other jobs. Today, he is a department manager in another area of the same hospital.
Example 3 (Private)
While at an accounting firm, I was working under the promise (it was in writing, not something I assumed) that I was on a partnership track, potentially to be the partner dealing with client-engagement. Despite being a very profitable employee who never took a day off, this was never the actual plan. In fact, the CEO of the firm even told me at one point he’d tried to remove me from larger clients, but they insisted I be the one they work with.
Unlike in the military or Fed, there was nowhere within the company for me to go, so I gave ample notice to ensure they weren’t short-staffed during tax season. After I left, the firm told some clients I’d been fired, and those who inquired further were told I didn’t work in the field of accounting any longer.
Example 4 (Private)
While working at a factory I brought in Wal-mart as a customer with the promise that I would receive 4% of all gross sales. We started getting paid, and I did not.
About this time, a couple of smaller relationships I’d been working on also came through, but there were also no commissions. I chose not to sue for the lost income, but instead completed my MBA during work hours, got a remote job writing ad copy for a company in San Francisco, then landed a contract to ghostwrite a book for a best-selling author. I took all meetings with the author during work hours, mostly wrote the book from my office, and also wrote ad copy for the company in San Francisco in much the same manner. My last two business trips were half-business, half-pleasure as I went to see old friends. I didn’t entertain business associates past 4:00, and didn’t take a redeye home but instead flew home the following day.
My negative private sector experiences are that the financial consequences are much harsher. Bosses will outright promise you that you can own something you’ll be able to give to your family, and then give you nothing while taking everything they can. They dangle a carrot at the end of a stick that – if you let them – they beat you with, and then act like you were crazy to ever think they’d just give you the carrot.
Federal Employment Benefits
In the Fed, you grow assets via the TSP that your family can easily inherit. There’s more mobility if you’re unhappy. The system is so big that you can ascend to your potential without even leaving your agency. If you climb too high, you can find your way back down.
My first Lead (GS-08) when I was a Tax Examiner did not like being in management. She took a promotion, but was absolutely miserable with the work she was doing. She could not return to the Lead position, so applied to be a GS-07 Tax Examiner. When I saw her later, she was like a different person. She was happy. Her pay potential was lower, but her stress was gone.
Talking about pay, Feds make less, right?
Many max out at GS-07. In New York, that’s over $70,000 a year, and some of these jobs are not very hard. Customer service operators at the IRS reach GS-08, which maxes out at about $80,000. That’s more than many IT technicians, which is another job field where Feds do better.
All of this pay then becomes a pension for the rest of your life.
You can have a pretty nice life working as a federal employee. People may want to argue some kind of hustle-culture mantra about how you’ll be capping yourself and that you’ll never be rich, but the reality is that pretty much no one will be rich.
One of my best friends owns a company with a paper-value of more than $15,000,000. My salary is higher than his, my home is nicer than his, and I get a lot more time off. He can sell his business for more than I plan to make in my lifetime, but he also holds a great deal more risk, and – this must be remembered – owning a company is a skillset all its own, and very few people can actually do it.
Having said all of this – the vacation and sick time, the good income, job security, investment matching, lifetime pension payments – there might be a right time to leave your government job.
I know I have one.
When to Leave Your Federal Job
I titled this article How to Calculate, but it’s more personal than an [x + y = z] type of formula.
For one, if you absolutely hate your job, you should put out one application per day for at least a month. I’m not recommending you give up your federal career, but with remote work opportunities, you can do well and stay where you are if you have the right skills. But relocating for the right opportunity can be right for you, too.
For those who do not absolutely hate your job, the right time to leave might require several factors. You need to figure out what those are beyond something as vague as winning the lottery.
For me, it’s the following:
- 20-years to lock in a deferred pension – see page 3 of this pamphlet
- Kids reaching certain milestones
- Full-time teaching offer
- No big changes in personal life
Now, these must all come together for this to work. Short of another variable, like if suddenly the world can’t live without my poetry, or I get a private sector offer exceeding $300,000 a year, it will only take a change in one of these for early retirement to go out of my favor.
If the 20-year pension option is suddenly not collectible at age 60, the math on my plans change.
My youngest will be college aged. While I’ve told all my kids since they were zygotes that they are going to community college, I’ve also told them that if they get into an Ivy League (or top 10 in their field of study) school, I’ll pay for it. My oldest two completed community college, and are currently in universities that cost less than a state school with dorming, but 2 more are coming up.
Outside of my children, I have 6 young nieces and nephews. If any of them have to live with me, I’ll probably work another 10 or more years as a Fed while only teaching as an adjunct because I’ll need the salary to support our household, and their education.
My goal is to move into teaching full-time. I absolutely love it and have twice-interviewed for full-time positions at local schools, one of which was the result of my alma mater asking if I’d be interested in applying. I recently met with the head of a college’s history department (what my Ph.D is in) and she said she’d be happy have me as an adjunct when I’m in ABD status, or can teach a daytime class, whichever comes sooner.
Big Scares: I addressed one scenario already – taking guardianship of my nieces and nephews. Rather than list other hypotheticals, I’ll talk about real things that happened in the last few years: In 2018, my house flooded in a hurricane. In 2019, I was almost killed in a highway accident. 2021: We provided hospice to a relative for about 2 months. Right now: We are supporting a relative who was homeless. These were all expensive and time-consuming, and may extend a very worthwhile career.
And that’s what a Fed career is: very worthwhile.
Consider a Hybrid Model for Leaving
I teach 1-2 classes a semester at a community college. This does not qualify as engaging in a hybrid model of transitioning from one career to another because my teaching income is too small a percentage of the total.
A better example was a marine with 19 years of service who started working as a real estate agent. After 3 months in a row of making as much or more than he did as an E-7, he knew he could retire. When his 20 years hit, he not only had the right income, but a little extra savings.
If not-working is the next phase, then there’s a way to do this, too, but it’s about more than money; it’s about if you can handle not-working.
Take 30 days of leave unrelated to the Fall or Winter holidays, and limit your spending ability to what it would be in retirement. Why outside of the holidays? Because holidays have planned social activities, and you might get fooled into thinking you’ll be just fine not seeing your work-friends because you just got your social fill over Christmas and New Year’s.
When you’ve done this, you need to determine:
- Can you afford it?
- Would you enjoy this lifestyle?
If 30 days is not enough, make it 90. This can be done if you need some kind of medical procedure, such as a knee replacement. Knee rehab is estimated to be “up to” 6 weeks, but if your doctor says you need extra time, the odds of it being denied are slim. Or you may be approaching burnout. If so, your doctor can provide a letter for mental health leave.
For those who are thinking I’m encouraging you to lie, or game the system, I’m not. The odds are very likely that after 20-40 years in a career without a true break, you likely need this time.
Additionally, if you’re the kind of employee that the office can’t live without, it would be a true service to give everyone a 3-month period of seeing what living without you will be like. Because at some point you’re going to leave, and you can either lead them into it, or you can leave them high and dry.
ID the Right Time to Exit
Some key questions are:
- Is staying the right choice?
- Are you running from a nightmare, or to the next adventure?
- Can you afford it?
These questions have mostly been covered, so the only one that will be discussed is the second one.
Running away from your current job could be solved by getting a detail, promotion, or lateral move. A co-worker of mine jumped into the Fed after retiring from a private sector career at age 60. When I met him 6 years later it was in a training class. He was a GS-07 who was bored with his current job, so he applied for another GS-07 position. At age 72, he became a GS-09, and recently interviewed for a GS-11. He’s very excited about doing something new and different.
Another co-worker left the Fed to be home with her children when she was a GS-12. 10 years later she returned as a GS-09. While her family’s financial wealth took a big hit, she said the investment into her kids and marriage was well worth it.
Recap
When planning to leave, objectively try to prove that staying is the better option. For me, staying will be more lucrative, but I’m generally unhappy when I’m not writing or teaching. If I need the money, it’s the right choice. If I don’t, it’s not.
There’s no catchall in this. Starting a business is right for a few people. Working until you collect your max Social Security payments is better for others and those are not even close to the only options.
There is no magic calculation to when you should leave the Fed for any particular opportunity. I’d take a private sector job for $300,000 or more. I’d also leave to teach full-time after securing 20 years of service, and may leave at 20 years to be an adjunct, if we can afford it.
Christopher Pascale is a federal employee currently serving with the IRS. His writing has been published in The Journal of Accountancy and Marine Corps Gazette. He is currently working on a biography about Vice President Charles Curtis, which is related to his Ph.D. studies at SUNY Stony Brook.
