ATC, 50 years old, eligible today. The full math on "two more years"
Here's my discussion scenario for the week. I'll call him Dave. ATC, 50 years old, 25 years of 6(c) service, married, Virginia. He can retire today. He keeps asking himself: is two more years worth it?
So I ran it. Both paths, same starting point. The only thing that changes: does he walk out at 50 or 52?
A few things move when retirement age shifts, and they're all linked to the same decision (not separate choices):
- Two more years of pension service: goes from 25 to 27 years under the 6(c) formula
- Two more years of SRS credit: same service-year count drives the supplement
- Two more years of TSP contributions at his current rate ($8,100/year) plus the agency match
- Two more years of growth on the existing $720,000 balance
Here's what that package adds up to:
Pension:
- Retire at 50: $4,592/month (net, after survivor benefit)
- Retire at 52: $4,824/month
That's $232/month more, for life. From 2 more years of service.
TSP at retirement:
- Retire at 50: $720,000
- Retire at 52: $857,862
The extra $137,000 comes from two years of 7% growth on $720K plus two years of contributions and match.
SRS (the supplement that bridges to Social Security):
- Retire at 50: $1,425/month for 12 years (to age 62)
- Retire at 52: $1,539/month for 10 years (to age 62)
This one's a tradeoff inside the SRS: higher monthly rate from more service years, but two fewer years to collect it. Net: Dave gets $20,520 less total SRS by waiting. Worth noting.
Average monthly take-home in retirement:
- Path A (retire at 50): $10,727/month
- Path B (retire at 52): $11,836/month
That's $1,109/month more for the rest of his life.
Total lifetime income to age 88:
- Path A: $5,020,015
- Path B: $5,255,078
Waiting adds $235,000 in total income across his retirement.
Now the honest catch.
Dave doesn't break even in cumulative income until age 75. He gives up two full years of retirement at 50 and 51 -- that's income he'll never get back. On a raw dollars-collected basis, he's behind until 75, then ahead for every year after.
So the real question isn't "does B win?" -- it does, if he reaches 75. The question is how he values 50 and 51 specifically. Being 50 and out of the tower isn't the same as being 52 and out of the tower. No calculation touches that.
One thing the break-even doesn't capture: Dave in path B isn't sitting idle at 50 and 51 -- he's still working, still earning his $162K salary. After federal and Virginia taxes, that's about $136K/year in take-home. Path A over the same two years is collecting about $84K/year in net retirement income. Count working income on both sides and path B is already ahead at the start of retirement -- the break-even at 75 is a retirement-income-only number, and a conservative one.
If Dave is healthy and reasonably expects to reach his mid-70s or beyond, the math makes a pretty clear case. An extra $232/month pension, a bigger TSP, and $235,000 more over a lifetime is hard to walk away from. But if there's a reason to go now, the numbers don't favor him until 75, and two retirement years at 50 have real value that doesn't show up in any spreadsheet.
Did others in 6(c) positions run this same calculation? Did the math change your decision, or did something else win? And if I've got a flaw in the setup, call it out. What should I run next Tuesday?