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Federal Employee Financial Planning: Sick & Annual Leave (EP52)

Going beyond the dollars and cents, retirement is a lifestyle shift, and it is essential to plan for it as such. In this episode, you'll discover the practicalities of planning for retirement as Michael, Tommy, and John discuss sick and annual leave, the value of proactive planning over reactive approaches, and how strategically using leave can impact not just your retirement, but also your current life. 

Listen in to hear the real reasons why many federal employees fail to tap into their sick leave benefits and how leveraging these benefits can be a game-changer for personal well-being. You will learn why annual leave isn't just downtime—it's an opportunity to recharge and show up as a better version of yourself at work.

Listen to the full episode here:

What you will learn:

  • The importance of planning versus reacting. (5:00)
  • Why it is essential to plan for how you’ll spend your time in retirement. (10:00)
  • Why so many federal employees don’t use their sick leave. (12:00)
  • Why the quality of life for federal employees seems to be deteriorating. (15:45)
  • How using your sick or annual leave can benefit your mental and physical well-being. (17:00)
  • The importance of knowing your score. (22:00)
  • How much leave you actually have. (28:00)
  • How sick leave works in retirement. (34:45)

Ideas worth sharing:

  • “It’s not just the money in retirement. It’s the lifestyle. It’s who you are, who you were at work, and who you’re going to be once you retire.” - Mason & Associates
  • “Use your benefits to recharge and give your mind and body a break. These things were designed so you could bring a better version of yourself to work.” - Mason & Associates
  • “You’re a millionaire in your pension, so why not plan like one?” - Mason & Associates

Resources from this episode:

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Read the Transcript Below:

Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.

Michael Mason: Welcome to the Federal Employee Financial Planning Podcast, hosted by Michael Mason, certified financial planner, John Mason, certified financial planner and Tommy Blackburn, certified financial planner and certified public accountant. Mason & Associates have over three decades of experience helping federal employees with their financial plans.

John Mason: Thank you to our audience for following and being a part of our podcast journey for over a year now. As we enter year two, we're really excited to continue releasing this content at a minimum of twice per month like we did last year, and potentially scaling and releasing more content in 2023.

If you're new here, we're Mason & Associates. We're a financial planning firm in Newport News, Virginia. We work with clients throughout the United States, helping federal employees not only in their retirement plan, but their tax planning, estate planning, and all aspects of financial planning.

If you're interested in becoming a client, we are accepting new client relationships this year, and that's standard for us. We hope to grow our client base at a reasonable rate over a period of time.

And this podcast gives us the ability to one, produce excellent content where you can learn and have some guidance and some insight into these complex benefits from certified financial planners who specialize. As well as potentially as a prospecting method is an ability to generate new clients for Mason & Associates.

So, we're really excited about this. If you think you're a good fit, you can listen to the new client process and experience, which is on our homepage at, and also available on all those major platforms where you're listening today.

Our phone number (757) 223-9898. And one other important note as we kick off this show is we're not sponsored. So, this content is produced by Mason & Associates for our audience. So, no direct sponsorship. This is just Mason & Associates content.

And my host Mike and Tommy. How are you all doing today? What's been new and any stories that you want to share before we get rolling?

Tommy Blackburn: What's been new? Well, this time of year, the Congress has been busy right at the end of the year. We don't even know if they've looked at what they've been signing. But we've got some new retirement tax laws of SECURE 2.0 for us to digest. We've begun digesting them. I don't think the president has signed it into law yet, but some changes there, pushing back RMD ages among one of them.

Other than that, it's just been fun. It's been really fun. Our firm as, a whole, we really celebrate this time of year. We take the week leading up to Christmas off, and it's been a great time to kind of rest just have time with the family.

John and Carter is three, Zoe's, two and a half. So, it's a pretty magical time with them and getting to spend time and see them around the holidays. I think that's what's been new. It's been a fun and relaxing time with family.

Michael Mason: I'm excited as we see it seems like every year, Uncle Sam makes our life easier as financial planners, should be making everyone's life easier as financial planners. But you actually have to be a financial planner for that to happen. And what do I mean by that?

There was times where you go 10, 15 years without any substantial change to the tax code, no changes to the retirement benefits. Seems like every year we're having something.

So, if you're a financial planner and you're not keeping up with this, then you're not a financial planner, if the people that are helping you don't understand how to capitalize on SECURE Act 1.0 and SECURE Act 2.0 and how about we don't even have all the details.

But if you made a mistake and we truly call it a mistake, and you were married and you left the military and you didn't take survivor benefits, well, there's a get out of jail free card again for that.

This will be the second get out of jail free card for military survivor benefits. So, many things that give us a reason to just stay excited in tune because we can take these laws and make a difference in your plan. Because we change the things we can change, not the things we can't, which is the direction the market goes.

John Mason: We would never be, I think the right word is disingenuous. Like we do this podcast hoping that we get new clients. We also do it because we know that all of these changes happen. All of these rules are changing every day, and we can only share it with so many people, so many clients, direct clients.

And it is fun to be able to use this podcast as a medium to share and hopefully empower other folks to learn from everything that's going on. So, I agree with everything you all are saying.

I think also kind of cool is the Mason & Associates equity transition. I was saying about that where Tommy and I have increased our ownership. Mike and Ken, you guys have reduced yours and just fully solidifying that succession plan. Ben Raikes is going to be a future partner here.

So, a lot of good things going on at the firm level that we hope for our audience, maybe you have a financial planner, what's their succession plan look like? Use us as an example of what one should look like.

And then for our clients who listen to this and folks who work with Mason & Associates, we hope that this is very exciting for you. That one, Mike and Ken are still here and very active in the business as Mike, you're on this podcast with us and serving clients.

But two, that there's a plan for when you don't want to be here anymore. I think all of that is really, really exciting. And for me, what I'm very excited about going into this year, and this ties into the episode of today, which is sick and annual leave episode. Sarah and I have planned some RV trips coming up this year.

So, we've been very thoughtful on how we're going to use our sick and annual leave at Mason & Associates to do some travel with the family. And I constantly think of planning versus reacting and putting things on the calendar because if we don't, they're just not going to happen.

So, for example, if we wanted to do an RV trip in February, for example, we can't just wake up in February and think we're going to do it. We need to put it on the calendar and be working towards that event.

So, planning versus reacting applies also to your leave, not just your tax plan and your retirement plan. It also applies to how you're going to use these benefits too.

Tommy Blackburn: Absolutely. Well, I guess I was thinking about what am I excited about going this year. You mentioned your trip. We've got St. Pete coming up in February down in Florida, so we are looking forward to some warmer weather, taking that trip as well.

I'm trying to do exactly what you're talking about. Think about throughout the year, when are we going to have some family trips. How are we going to take advantage of our sick and annual leave as you put it.

John Mason: And I think one of the things to think about here, Mike, is I know all three of us subscribed to this. I know I got it wrong the other day, but Tommy, you and a previous mentor had talked about renting your fun and renting VRBOs and things like that rather than having vacation houses. I think we all subscribe to that philosophy, don't we?

Michael Mason: Oh, yeah. I mean, I've looked and said, “Can I buy this house on the ocean? Can I?” The answer is probably yes. Should I? Or should I just rent somebody else's pain in the neck?

Tommy Blackburn: That's what John called it, which was great. He said that, “Tommy tells me you should rent your problems.” I was like, “I think it's renting your fund, but rent your problems. That sounds good too.”

John Mason: So, the rent the problems for me, as you guys probably know, is we have this travel trailer, this RV that for our RV listeners, we are in our weight capacity. We have not exceeded our gross combined vehicle weight rating or a GVWR on anything, but we're close.

So, I felt the need to go in search of a three-quarter ton or a one-ton truck for some of these longer trips. I found out at Enterprise, you can rent a one-ton diesel F-350 Chevy 3500 for like, I don't say it to be downplaying for like $1,200 for a month.

So, if you were to go on a month-long trip, you can rent your problem. My problem is I don't have a one-ton truck that maybe I would like to have to do that west trip, so I can rent my problem or rent away my problem which is a lot cheaper than going out and buying a brand-new three-quarter ton or one ton pickup right now.

So, Sara and I are very proud of that decision to rent the truck when we need it rather than one, see the property tax, the insurance, the monthly payment associated with something that we only need a couple times a year.

Michael Mason: Yeah. And the F-350 driving seven miles to the office. So, you can have a $800 truck payment for the next five years, or a $1,200 once a month, maybe three times a year rent. So, it makes a bunch of sense.

And I guess what we're coming down to because we haven't talked about sick or annual leave at all. I'll throw in one other thing. It's planning versus reacting. It's planning on everything. It's planning your vacation. If you just show up at Yellowstone National Park, you're probably not going to be real happy if you don't plan it out.

And if you just show up in retirement and think that one day you can come in here to work, go to NASA to work, go to Norfolk Naval Shipyard to work, and the next day you can stop that cold turkey and you don't have anything to replace it with.

So, it's not just the money in retirement, it's the lifestyle. It’s who you are, who you were at work, and who you're going to be once you've retired.

John Mason: It's very overlooked. And I think it's because so many people might spend, like we talked about in another episode, is we don't know the score of the game. We've been playing this round of golf. We have no idea if we're over par or under par. So, we just keep playing.

Well, if we know we're winning, then we can turn the page and say, “Now that we know we can do this, how are we going to fill our day?” And we've seen clients do it really, really well, we've seen them be able to enjoy their retirement and have a plan.

And we've also seen some clients who have kind of hidden under a rock and have gotten scared and don't do anything and have lost their identity. And it's unfortunately part of the financial plan, not given enough consideration, is how are we going to fill our day?

Michael Mason: So, here we are, and this episode is sick and annual leave. So, we want to talk about one, what it looks like. Two, how are you going to plan your sick and annual leave, not only today, but as you head towards retirement.

John Mason: The rules, the psychology behind how we use it or when we use it, how we're going to plan for those trips. So, I think we have a lot to cover during this episode. And Tommy, I don't know what you think about maybe kicking off with some of the psychology behind it.

Tommy Blackburn: Yeah, psychology, that's exactly what I was thinking we would start off with before we get into the rules. And I guess it's been interesting for me three years now specializing with federal employees and what do you see.

Well, you always see these gigantic sick leave balances that have been carried, and we usually carry them into retirement and it's going to affect our pension and how it's calculated. But that's the psychology of it is it seems to be pretty prevalent to not use it at all.

John Mason: I agree. I have a client who's retiring probably the end of this year that has more sick leave than I've ever seen. I think it's like 15 or 16 months of unused sick leave. And not only that, we have our 240 hours that have been carried over plus whatever he accrues throughout this year.

So, I don't know if it's the federal employee conservative mindset where they're worried what's going to happen. There's something going to happen where I need to have all of this.

But it's very rare unless somebody has gone through a cancer diagnosis or heart attack, a major health event, either themselves or a family member not to see gigantic leave balances.

Tommy Blackburn: Yeah. And I guess, is that the reason? Maybe that's the reason for some of them, is you think it's another reason that people are by and large doing this.

Michael Mason: There could be this fear of that major illness that could be around the corner. So, I'm going to stockpile my leave. Of course, the older you get the closer to retirement you get, you understand that if one of those things unfortunately comes your way, and we have an episode on it, the FERS disability retirement, CSRS disability retirement.

I think we need to do one in the future, guys on compassionate social security if you get one of those dread illnesses. So, I think maybe that might be part of it. I have a real world situation just to discuss. It's amazing if you paid attention to the news at all, and I know you guys did. The railroad unions were about to strike, they couldn't come to an agreement.

The big issue was sick leave. It got to Congress and members of Congress, of course, are federal employees who get at least 13 days of sick leave and because railroad can't strike, Congress passed a bill, forced a bill upon them that they got a pay raise.

But absolutely no sick leave for railroad employees. And federal employees have 13 days, at least 13 days of sick leave, 26 days of annual leave. And I'm not doing this to make you feel bad, but you have a whole lot of time that you don't have to go to work. You want to use it appropriately.

John Mason: As we think about the psychology behind it, and my experience guys, after 12 years, it seems that most people hoard it. The word that comes to mind is we hoard it. And I can't tell people how they feel or why they should feel the way they do. That's not our place.

But it seems like a hoarding mentality or the desire to have the maximize button. And in my experience over these 12 years, it's been hoard the sick leave and then guarantee or do everything in my power to retire with 400.

So, you get to carry 240, retire with 448 hours of annual leave because I need that lump sum to retire. And I just don't think that this is necessarily a healthy mindset. And I've noticed maybe you guys have too, that the quality of life for federal employees appears to be deteriorating.

And I've never set foot inside of a federal employment. I've never been a federal employee. But as we see clients come in and retire, they are not happy. Some of them have physical health issues because of the nasty environment.

Whether it be mold in the buildings, the ridiculous amounts of stress, it doesn't appear to be healthy. With all that being said, if the deterioration of the work environment's that bad and they have all these benefits, let's talk about that a little bit.

Tommy Blackburn: Right. And that's exactly what I was thinking. It seems like, I don't know if it's a hoarding mentality or maybe there's even a culture of you shouldn't take advantage of your benefits.

I'm not exactly sure what the driving force there is, but it seems detrimental to folks’ health. And it would be good to use these benefits to recharge, give your mind and your body a break as you would think these things were designed to, so that you can bring a better version of yourself.

And I know John, I at least I've heard it from you and we probably all have said it. But you could probably work a longer career if you actually took some mental days, some time to yourself, took some fun trips, went out with the family. If you did that versus you just grind it out constantly and refuse to take any time off, then retirement can't come quick enough when you're in that world.

John Mason: Absolutely. You think about if I could extend my career three more years, and all of a sudden those three years from when we got these monster inflation years, and now all of a sudden I'm getting that as a pension for the rest of my life, maybe it got me to age 62 and I got that 10% bonus.

So, sick and annual leave, relax, recharge, extend your career. Mike, I think you can hit on two stories here. One, I think the grandpa story of how he used his sick leave because not only was that good for his mental health, it may have saved his life too and so I think talking about that.

And then also I think about where you and Ken are in your career is you don't necessarily have sick and annual leave, but you have enough money to retire, but you still like what you're doing.

So, you're kind of enjoying this part of your career while you're half retired and half working. And our clients have that opportunity too. So, maybe you can touch on that a little bit.

Michael Mason: Yeah. And before I tell the dad story, guys, I just want to reiterate what you said. Saving up that 240, so you get a big check February of the year that you retire I guarantee you, five years down the road, that big check meant nothing to you. And if you needed that check, then that means you didn't have a financial planner.

But that trip you missed out on that two-week trip that you missed out on. That could have been the one that you've got pictures of that you tell your grandchildren's about forever, you'll remember that trip. You're not going to remember that check. So, think about that.

I was born and raised in Northern Virginia. Dad worked at the National Institutes of Health. We lived in Woodbridge. Back before it was crazy, he could get to NIH in about 45 minutes. Springfield, Virginia. It was about 15 minutes from the house. He got to the point in the last five years of his career that if he couldn't get past Springfield in 15 to 20 minutes, maybe it was 30, he was sick.

He'd turn around, come home and call in sick. He says, “It would take me forever to earn the same amount of money in retirement from that extra income from sick leave.” So, I'm just not going to stress myself out. Anybody that that drives in Northern Virginia knows that that's just not worth it.

John Mason: Yeah him using his sick leave, he lived a long life. And by doing that simple rule, if I can't get to Springfield in X minutes, I'm going home. How many accidents were on I-95? How many accidents were on 495 and 295? However he got to NIH that he avoided just because he used his leave.

Michael Mason: Right. And as we look at this, and we're fortunate enough, we haven't always been this way, but we've built a practice that all of us can be proud of. That's 2003 is when we started Mason & Associates.

Built a practice and I don't mind us talking about it, that we take as much leave as we want because we all get the job done. And guess what, when you give somebody as much leave as they want, they typically don't take as much as they would otherwise.

But I've got the ability to maybe work 10 more years, I hope, with my top clients because I can take the leave I want. It is part of my retirement because this is part of who Mike Mason is.

I love what I do. So, this is this is a half retirement for me because I'm not good enough to play golf every day. And even if I were, I probably wouldn't enjoy every day golfing.

John Mason: And our federal employee clients and private sector clients, a lot of them have similar opportunities, whether it's phased retirements or part-time work. Or even just using a little bit more of that leave and starting to do some of these “Honey one day when we can, we want to go to Yellowstone” or do a trip to Alaska.

Well, when you're a GSS 1415 SES and you're making great money and you have leave, maybe we can lower TSP contributions, start doing some more of these trips while you're still actively working. What's holding us back? If it's not financial and it's the job and it's the job we understand, maybe it's time to retire and move to that next chapter.

Tommy Blackburn: Well part of that though is the saying you got to know the score. So, just like Mike, take your personal example you just said there, where you're working these 10 years and enjoying every bit of what you do but you're doing it because you enjoy it, because it's structured in a way that you love what you do and you can keep doing it versus …

Because you know the score. I'm sure you could walk any day if you wanted to but you're doing it because you want to do it. So, just brings you back to that know you score. It's such a good phrase.

Michael Mason: It's tremendous. And we do have an episode on know the score. If not, just listen to all of them and you'll hear the story. But John, you guys both reminded me and you said it so clearly.

How much easier is it to get on the airplane and turn left when you're actively working as a ACS or a GS 15 and you're just taking leave? I know for me, when Bobbi says, “Hey, we're going to go out to Yellowstone and I'm working on the accommodations and the private tours. Do you think it's okay if we sit in business class?”

And I said, “No, it's not okay. I'm not going to sit on an airplane that long in anything other than first class.” Well, it's a whole lot easier to make that decision when yes, you're ready to retire and you're still working.

So, you should think the same way, you can afford this. Remember, you're a millionaire in your defined benefit pension, how about planning like one.

John Mason: It's easier to spend W-2 money, which is getting up and going to work money than it is 1099-R money, which is money that you scrimped and saved and put into TSP and lived through 2008 and lived through 2002 and lived through 2022.

It's a lot harder to spend 1099 money than it is W-2 money. And our clients and those listening to this podcast it's a good way to start doing these trips while you still have the W-2 income.

Michael Mason: I can tell you this, my dad, once he went into the vault, it just never came out and many of our clients, because you've been frugal your entire career. I will tell one great story, they are retired I won't get any closer to this, but are both retired federal. They just did this around the world trip around the world.

And this firm only takes like 25 or 30 couples. It's a private plane everywhere you go, private tours everywhere you go. I mean, they pulled some money out of the vault to do it, but when you know the score, Tommy, I mean, I've looked at this, I mean, it's six figures to get this done.

But think about that. It would've been maybe easier for them to do that with three or four months’ worth of leave when they were active. But I tip my hat to them because that's doing retirement the right way.

Tommy Blackburn: Well, and another thing you said though comes back to me, which is if you know the score, you're not going to notice that six-figure check. I mean, and we've all been trained that it's going to be a little painful writing that six-figure check for this trip.

But you're going to remember that trip for the rest of your life and maybe your family will as well. But that money, it's probably not. I mean, as long as it didn't create stress in your life to take that money out, which it shouldn't have and it wouldn't have, if it's our clients, we'd advise them otherwise. So, that resonates with me of you think about what you're going to remember here is the memories.

Michael Mason: Yeah. I might even suggest to you now, we're not telling you to just burn all your leave. But I would say in the home stretch, there is an episode of when you're in-

Tommy Blackburn: It’s our first episode.

Michael Mason: Yeah. When you're in the home stretch, which means maybe you're 60-years-old, the house is paid off, and why don't you travel from 60 to 65? Heck, you might find that you like your travel so much that when you thought you were going to retire at 64, you go from 60 to 67 because you're burning your leave while you're making the most money you can make. And you're in the home stretch and you're turning left when you get on the airplane.

John Mason: Well, I think we did a good job, guys, covering the psychology and the emotional side of this and using that leave and having the ability to enjoy it while you still have the W-2 income. We think makes all the sense in the world.

And one kind of like mental hack that I think the three of us do, and I know Ken and Ben do as well with clients, is when clients retire because this is sick and annual leave. And now it's also kind of dovetailing into vacation planning, is we will do a distribution from an IRA or TSP for their required living expenses.

So, let's say that they need an extra $2,000 a month for living expenses, but the plan supports another $30,000 withdrawal on top of that. What we typically advise our clients is take the $2000 a month necessary for your required living expenses.

Call me twice a year when you're ready to do those two $15,000 trips and we'll send you a distribution for those trips. Why do we do that? Because we create memories with those lump sum withdrawals. If we were to increase their monthly draw, chances are it's going to get spent more hot dogs, more hamburgers, more Starbucks coffee.

Tommy Blackburn: Mental accounting, it's either call me on demand when you're ready for — give us a heads up, give some courtesy to do our job here, but do it that way. Or we can schedule it, we can do it twice a year already. It's already been allocated.

Or we do it at the beginning of the year, we'll give you a lump sum drop in there. But it's just mental accounting where if it comes out in a monthly installment it's harder to account for some reason. Whereas you get that lump drop, that's your vacation money.

John Mason: So, just another way of saying let's be really thoughtful on how we want to do our vacations. Let's make sure that we're enjoying our money. It doesn't get lost in the shuffle. I think all of these things really kind of wraps up that psychological and emotional aspect around leave and vacation.

Let's talk a little bit about the rules. If you have over 15 years of service, how much leave are you accruing on a paycheck basis? And then maybe after we do that, we can talk about retirement and then close with any other action items.

Tommy Blackburn: Okay, so if we're over 15 years of service, we're getting one day of leave per our pay period. So, there's 26 pay periods in a year. So, 26 days of leave per year.

Michael Mason: And your sick leave after 15 years of service, you get half day a sick leave per pay period. So, that's 13 days of leave per year.

John Mason: And overwhelmingly, guys, and we see it, and we've thrown this number out multiple times. Most of our clients are federal employees and 9 out of 10 of them, or maybe even 10 out of 10, depending on the year you're looking carry over their 240 hours of annual leave from year to year, which basically results in 208 hours that we have use or lose.

So, we carry our 240, we've got 208 that we have to use, lose, burn, donate something before the end of the year. As we think about the W-2 travels and thinking about all of this, what if we change the rules of the game a bit?

So, what we do is we like to have all of our client meetings in April and May. How can we maybe enhance our client's quality of life as it relates to annual leave? Should they only use those 208 or should we somehow use those 240 hours? What do we think would be a better plan?

Tommy Blackburn: I think if your job will allow it, taking some of these lifetime trips I think is where you're going. Let’s say we built up our 240. Let's drain, let's take a couple week vacation or maybe a month trip somewhere. Is that where you're going with this?

John Mason: Yeah, I don't know if the government in various positions will allow it. But I'm thinking, okay, I have 208 hours that I have to use. What if once every five years instead of carrying forward 240, I carried forward 140.

Now all of a sudden, I've got 308 hours that I have to use that year, and then it builds back up to 240 and then I drain it again to 140. If the government allows you to do that, now we're having these awesome trips, these once in a lifetime, while we still have W-2 income, it just seems like it makes sense, but we're not seeing that happen in practice.

Michael Mason: I'm just wondering what are you carrying it forward for? What's going to happen? Because the most you're going to have is, what is it, 408? That's the most you're going to have. And what's the plan for it? If there's a plan and if the only plan is a big check, then I would hope that you reconsider that.

Because if that big check … I've said it earlier you're not going to remember that big check at retirement. Two years after retirement, you will remember using that 240 hours of leave every year.

John Mason: Well, to your point, Mike, and again, I've never been a federal employee, but I'm trying to think about the old rules or the old adages. We've done radio shows and podcast episodes, I think talking about how the old rules are not necessarily the same as the new rules.

For instance, if your mortgage dropped by 2%, you should refinance. That's almost true again, by the way. But now the last 10 years, it's like if your mortgage dropped by half a percent or a quarter of a percent, it made sense to refi.

What am I getting at? Well, in 1984, when you were hired with the federal government, you had zero leave. Everything was scary. You had no emergency fund, you couldn't retire and you were broke. So, we probably needed to not take a lot of vacations and do these things because what if there was an emergency?

So, now let's fast forward. You're 60-years-old, you have a million, 2 million, whatever you've saved in your TSPs and retirement plans. You're perfectly capable and ready to retire. If life throws you a curve ball, I'm out. Standard Form 3107, I think is the first retirement form. I just retire. I don't need that sick or annual leave because I can just retire.

So, you could almost make a case that once you've made the decision to retire, your need to carry leave is almost zero. But my need to carry leave when I'm 25 with a kid is much higher because I have a lot more uncertainty in my life. So, I just think maybe we've reached a point where leave is irrelevant once you kind of hit that MRA.

Michael Mason: Well now you're talking the psychology of a federal employee. We've said often that you're frugal. You're trained to be frugal early and around the coffee pot or the water cooler we talk about how we're over benefited and underpaid.

And then you listen to a podcast of Mason & Associates and you find out you're a secret millionaire, but you don't arrive at secret millionaire status the day you sign up for federal employment.

You arrive there over a career, really. And if you've spent that career training yourself one way, John, you make a great point, when you reach that status and back to Tommy, when you reach that status, you'd be good to know it.

And that's our episode of knowing the score. And once you know the score and a good financial planner is going to help you know that, then maybe that leave thing that you've ingrained the old rule of thumb you were thinking about, that you've ingrained in yourself it's changed. And you shouldn't be using the rule of thumb of a 25-year-old. You should be using the rules of the 55.

Tommy Blackburn: It's classic planning as I think about it, of what was a strength throughout your entire life being frugal. And it was good reason you laid it out, John. In the beginning of your career, it was good reason to do these things it was a strength. Save, prepare. It can become a weakness later on in life.

You wake up and you don't realize the score has changed. The game has changed. We're afraid to touch what we've saved for this day. And it can become a weakness. We continue to live frugally versus taking that six-figure trip or whatever it is you're having. So, that's a good astute point, I think.

John Mason: And one other rule that I think we want to cover one of you guys take it is sick leave. How does that work for retirement? How did that change a few years ago? And just specifically talking about how we need to be thoughtful as we get closer to retirement on those rules.

Tommy Blackburn: So, Mike, I think you've definitely had some good analogies on this.

Michael Mason: Yeah. And I'll jump in there. We'll make it real easy. Let's say, let's just make it a year. So, it makes life really easy. So, if you make $100,000 and you have an year of unused sick leave, well that's going to add one more year to your retirement calculation.

And if you’re FERS one more year will use 1%, for anybody that's being counting me, it's 1.1 if you are over 62, but it's 1%. So, 1% more of $100,000. My math tells me that's a thousand bucks. But if you use that sick leave while you were working, well, you get dollar for dollar.

So, you had a year's worth of sick leave that gets you $1,000 a year in retirement, or you used it up over a four- or five-year period leading up to retirement and Uncle Sam paid you $100,000 for it. So, it seems like you're not going to live long enough in retirement to recoup the unused full pay sick leave.

John Mason: And it was a few years ago now it feels like it was yesterday, but they changed it where it used to be for FERS only 50% of your sick leave counted towards your retirement.

And I think it was nurses were the only group of folks who it was 100% counted. So, that's changed. So, 100% of sick leave now counts towards the retirement calculation. But we need to be careful, Tommy, that we don't retire with 31 years, 11 months, and 29 days of service.

Tommy Blackburn: Right. So, we have to look at what is our total service going to be and how the sick leave adds into it. And so, only years and complete months count, days do not. But so it's not just like how many days of sick leave do we have?

We have to add it to the total service time to figure out where we are. And if we have days in that calculation, then we need to choose a different retirement date or use up some of that leave.

John Mason: That's right because if you have 29 days of sick leave, that does nothing for you, it doesn't add to your retirement, you don't get paid for it. It is truly just lost time. And we know you don't like that.

Tommy Blackburn: That’s exactly what I was thinking.

John Mason: We know you don't like that.

Tommy Blackburn: Yeah. We give you that information. We know exactly — you're going to take action. That scenario's not going to happen.

Michael Mason: Yeah. Well, 29 days might as well be a month. And that's 1/12th of $100,000 in my scenario. That's giving up a chunk of change.

John Mason: Well, another fun episode of the Federal Employee Financial Planning Podcast. Big shout out, Mike and Tommy for doing an excellent job tonight as we record this. And Ben and Ken, the other financial planners, you're going to see them or hear them on a future podcast episode. We don't do this enough.

Thank you to Mason support, which Bobbi Mason, Lynette, Kelsey, and everybody that we have helping not only the advisors but our clients. We've got a great team here at Mason and everybody deserves a shout out.

And you do too, our audience, thank you to our followers who tune in every two weeks to hear the new episodes. If you're new for tuning into this one, make sure you follow us. We'd love to see this podcast continue to grow.

And more importantly, we'd love to hear from you. Please leave us some comments. Send us an email to . That's mason foxtrot papa at

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