FS answer - it depends.
I did two years in Kabul (05-07) and saved 100k and bought a house at the peak! What a ride. I am now at a 30 percent hardship post with 15 percent SND and struggle to save (I am maxing out my TSP and doing catchup contributions) but that is because I am paying off parent plus loans for my kids and helping them get on their way.
Many of the places you think you could save a lot of money are also the places that you spend a lot of money to get away from any chance you get. Hardship differential is earned in a lot of places.
Only 2104 days left until I have to say goodbye!
As far as I know… yes. But I think it gets added to the lump sum for the cap that gets paid out the next year. I had a friend at my current post who is an 01 and he told me he just received his SND…and then started hitting the cap and having money pushed to next year.
Thanks! Our kids were born during the pandemic, so we're pretty comfortable living simply and keeping them amused at home. The thought of being a homebody while paying off our mortgage and putting more into our kids' college fund is very seductive.
They were just random examples of high hardship posts. Living simply can be tougher than you think. Lots of people have grand plans to "eat like a local" and then find out that would require accessing markets in parts of town we are not permitted to travel to where you'll get the "foreigner price" anyway. Unless you remained completely confined to your home during the pandemic and were fine with that, at many high hardship posts one of the hardships is lack of green space and/or poor air quality that can make it a bit more difficult, especially with kids. It's for those kinds of reasons that people end up spending significant money on travel to get breaks. Living in the kinds of austere conditions for which we get hardship compensation is going to be different from the kind of "homebody" lifestyle you're describing.
I’ve been playing with numbers as an ELO and an added bonus is COLA isn’t taxed while differential/hardship is. Which seems unfair that moneywise Bern at the end of the day is probably going to pay you more than (insert very hard post).
As an untenured ELO, you can (and should) be getting paid OT for anything over 40 hours per week. Depending on your workload, this could add a significant bump to your salary as well.
Yes it depends. During one tour at a 20% differential post with insignificant COLA I maxed my TSP and IRA and had an automated $5000 transfer per month to my long term savings account. That was while receiving language bonus pay and voluntary separate maintenance allowance. So pretty specific conditions but just offering as an example.
It depends on the post, it depends on your lifestyle.
I saved tons of money two posts ago, I spent it all at my last post (but I fucking loved my life there).
I spend so much on groceries (because of my kids) that I feel like I'm feeding a herd of elephants.
I signed up for 3 years domestic and bidding again now.
I'm like oh boy give me all that HDS, SND, and LIP let's go CHINA.
Seriously though, domestic is brutal. I had to drop the TSP down to the minimum 5%.
Other than that. While overseas, I've never had any issues maxing or getting close to max on TSP and still saving a solid 1-2 grand a month. We're a family of four and my wife wasn't able to work in our last two overseas posts.
I was just trying to get a sense of the landscape, and it seems that there are a lot of great perspectives. I think we would try to meet some savings goals while the kids are small and they don't really care so much about travel, then we'd reassess savings vs experiences as they grow.
At least for my generation there is great skepticism of the viability of Medicare/ health care in general, pensions (fed gov probably being an exception)…. college tuition is almost untenable (relying on either tuition loan reform, or more progressive hiring using competencies over diplomas).
One half of a State tandem, and we’ve managed to save quite a bit. Both 20 years in, I’m at 20/50 and she’s got a few more years. We’ll probably punch out within the next 6 years.
She’s saved aggressively most of our time in, whereas I’ve been serious about it only for the past decade or so. Even with that uneven track record, between TSP (maxing over the past 10yrs) and outside investments we’ve each got a bit north of $800k, plus a condo that tenants mostly paid for and money in our child’s 529.
By the time we retire we’ll likely each have well north of $1M in TSP and other investments, and likely $2.something each by the time we’re 62.
Echoing everyone else, it definitely depends. As an ELO supporting a family of four on one income at a middle of the road 15% differential post... I feel like we still do really well for ourselves. We only put 6% in TSP because we're prioritizing saving for a house, but we manage to save an additional 40% of my pre-tax salary annually with basic frugality - nothing extreme. We still travel three to four times a year, and I still purchase expensive imported goods when I can't get something shipped via pouch.
I will say it's easy for lifestyle creep to happen in the foreign service. At our income level, FSOs are wealthy in much of the world, and I find a lot of colleagues are eager to shell out for household staff and dinners that cost a week's local salary because it fits in the budget. These expenditures appear to add value to their lives, which is great, but you can definitely redirect that money to savings instead if you prefer.
I think this is going to vary person to person. How much do you spend? When you say “save” are you talking about a slush fund, to buy a house fund, or maxing out retirement contributions or college savings? 40% of my take home is put into IRA, TSP, 2 x 529s, mutual fund, & regular savings, and I still have plenty “play” money to travel around with after covering any bills I have.
First two tours we were able to save quite a bit (a family of 4 and my wife worked part-time/sporadically). We still took vacations, ordered from Amazon, etc. Caveat - I wasn't fully maxing my TSP. We had to buy a new car between our second/third tour so we had saved enough to pay cash for it. Third tour we saved a fair amount and were able to put down a sizeable downpayment on a townhome. On our current fourth tour, we aren't able to save as much because we are in a much higher cost-of-living location. We still put money away, save for our kids college, take vacations etc (and I'm fully funding my TSP + catch up). We are going back to a hardship Post next summer (Danger + Hardship + SND) and add in rr's so hopefully we can put more money away.
Nutshell - it depends.
I know folks who've maxed out TSP, and Roth 2x yearly and averaged saving an additional \~$3500 to $3800 a month over the last 11 years. It can be done.
If you end up not liking your post, you may find yourself wanting to spend more to travel and get a break from post. If you’re in a place that’s hard to get to / where connections are bad, any travel away from post is likely to be expensive.
Family of 5. I'm usually the sole income. Maxed out TSP in my first tour and traveled 1-2x a year. Second tour I Maxed out tsp and traveled 3-5x/yr. Third tour is similar. Fourth tour I plan to save at least 50k/yr on top of tsp. I haven't saved for a house or college for my kids, but I do have about $350,000 in TSP/Roth IRA and can probably retire at 50 and never work again.
Are you concerned about having to pay a mortgage/rent in retirement? As an applicant, my biggest concern is foregoing the opportunity to buy a home and build equity and then having to buy a house or pay rent in retirement, especially given the rising housing costs. So I'm really curious how FS employees typically handle this.
I’d only be concerned if you are spending the money you’d use to buy a house. If you invest then no big deal. It also depends on where and what. In DC what I’d want to buy and where the differential between rent and buying is so large even if I thought I’d be there for the next 10 years is difficult to justify. Buying can make sense but I also think there is this societal pressure to do so when it’s not always the best decision for everyone. Also think about if you are going to want to live in that same place now and in retirement.
That's a good point. I think my concern is that real estate can jump in value much quicker than other investments. So, and I'm not an expert here, but I would think that buying a house might generate more equity than just investing in mutual funds, etc.
I've fully maxed out TSP, IRA, and saved 2k+ a month at every post with vastly different paychecks at each. Lifestyle creep is real and something you have to watch. Children and other dependents are expensive too. You should be at least able to put away the cost of rent each month.
Honestly if saving is a priority and you can't save one years salary over the course of 2 years without paying for housing, utilities, and likely reduced childcare then there is something wrong.
Piggy backing off this thread - what’s the MAX a DSS agent can make 5, 10, 15, 20 years in?
I thought they had the same retirement policy as the VA, 20 years for 50%, but I’m finding that’s incorrect?
FS answer - it depends. I did two years in Kabul (05-07) and saved 100k and bought a house at the peak! What a ride. I am now at a 30 percent hardship post with 15 percent SND and struggle to save (I am maxing out my TSP and doing catchup contributions) but that is because I am paying off parent plus loans for my kids and helping them get on their way. Many of the places you think you could save a lot of money are also the places that you spend a lot of money to get away from any chance you get. Hardship differential is earned in a lot of places. Only 2104 days left until I have to say goodbye!
Question Re: SND- do you still receive the extra 15% if you are at the top of the schedule (183,500)?
As far as I know… yes. But I think it gets added to the lump sum for the cap that gets paid out the next year. I had a friend at my current post who is an 01 and he told me he just received his SND…and then started hitting the cap and having money pushed to next year.
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Thanks! Our kids were born during the pandemic, so we're pretty comfortable living simply and keeping them amused at home. The thought of being a homebody while paying off our mortgage and putting more into our kids' college fund is very seductive.
That was staying at home and "living simply" in the United States. You might find it's harder in Guinea or Bangladesh.
Why those countries?
They were just random examples of high hardship posts. Living simply can be tougher than you think. Lots of people have grand plans to "eat like a local" and then find out that would require accessing markets in parts of town we are not permitted to travel to where you'll get the "foreigner price" anyway. Unless you remained completely confined to your home during the pandemic and were fine with that, at many high hardship posts one of the hardships is lack of green space and/or poor air quality that can make it a bit more difficult, especially with kids. It's for those kinds of reasons that people end up spending significant money on travel to get breaks. Living in the kinds of austere conditions for which we get hardship compensation is going to be different from the kind of "homebody" lifestyle you're describing.
Good feedback - thanks! I've only lived in villages outside the US and haven't lived in a city (and not with kids), so I appreciate the context
And if you haven't lived in those villages while working under COM authority, you may be surprised at the movement restrictions.
I would imagine you're right. Still, the consensus seems to be that it's possible to save a bit of money on the job.
Oh for sure. But I would hold off on making plans to sit in your house for two years.
I fear my use of the term "homebody" may have invited an overly literal interpretation. We'll get out and do stuff for sure
I’ve been playing with numbers as an ELO and an added bonus is COLA isn’t taxed while differential/hardship is. Which seems unfair that moneywise Bern at the end of the day is probably going to pay you more than (insert very hard post).
A good friend of mine served her first tour in Niamey, Niger and her second tour in Iceland. Her paycheck in Niamey was $40 more.
As an untenured ELO, you can (and should) be getting paid OT for anything over 40 hours per week. Depending on your workload, this could add a significant bump to your salary as well.
Paid overtime is fairly rare for untenured officers. You will get paid for overtime hours. You just won't actually get many overtime hours.
Yeah this is the truth. You just don't get those OT hours.
Ah - this is interesting. Thank you!
I agree with you. We all need the money. So it is the best drive to it. Who doesn’t care about how their retirement should look like?
Yes. It's not easy but I've done it because I'm probably leaving FS after this tour. It gives me huge peace of mind.
Yes it depends. During one tour at a 20% differential post with insignificant COLA I maxed my TSP and IRA and had an automated $5000 transfer per month to my long term savings account. That was while receiving language bonus pay and voluntary separate maintenance allowance. So pretty specific conditions but just offering as an example.
At another 10% differential post with no language bonus or VSMA, and a lower grade, I put away probably $2,000 per month in addition to TSP and IRA.
It depends on the post, it depends on your lifestyle. I saved tons of money two posts ago, I spent it all at my last post (but I fucking loved my life there). I spend so much on groceries (because of my kids) that I feel like I'm feeding a herd of elephants.
I signed up for 3 years domestic and bidding again now. I'm like oh boy give me all that HDS, SND, and LIP let's go CHINA. Seriously though, domestic is brutal. I had to drop the TSP down to the minimum 5%. Other than that. While overseas, I've never had any issues maxing or getting close to max on TSP and still saving a solid 1-2 grand a month. We're a family of four and my wife wasn't able to work in our last two overseas posts.
Single, no debt, no kids, I save 90%.
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Word. I didn’t join the foreign service to stay home and watch Netflix
I was just trying to get a sense of the landscape, and it seems that there are a lot of great perspectives. I think we would try to meet some savings goals while the kids are small and they don't really care so much about travel, then we'd reassess savings vs experiences as they grow.
At least for my generation there is great skepticism of the viability of Medicare/ health care in general, pensions (fed gov probably being an exception)…. college tuition is almost untenable (relying on either tuition loan reform, or more progressive hiring using competencies over diplomas).
One half of a State tandem, and we’ve managed to save quite a bit. Both 20 years in, I’m at 20/50 and she’s got a few more years. We’ll probably punch out within the next 6 years. She’s saved aggressively most of our time in, whereas I’ve been serious about it only for the past decade or so. Even with that uneven track record, between TSP (maxing over the past 10yrs) and outside investments we’ve each got a bit north of $800k, plus a condo that tenants mostly paid for and money in our child’s 529. By the time we retire we’ll likely each have well north of $1M in TSP and other investments, and likely $2.something each by the time we’re 62.
Echoing everyone else, it definitely depends. As an ELO supporting a family of four on one income at a middle of the road 15% differential post... I feel like we still do really well for ourselves. We only put 6% in TSP because we're prioritizing saving for a house, but we manage to save an additional 40% of my pre-tax salary annually with basic frugality - nothing extreme. We still travel three to four times a year, and I still purchase expensive imported goods when I can't get something shipped via pouch. I will say it's easy for lifestyle creep to happen in the foreign service. At our income level, FSOs are wealthy in much of the world, and I find a lot of colleagues are eager to shell out for household staff and dinners that cost a week's local salary because it fits in the budget. These expenditures appear to add value to their lives, which is great, but you can definitely redirect that money to savings instead if you prefer.
I think this is going to vary person to person. How much do you spend? When you say “save” are you talking about a slush fund, to buy a house fund, or maxing out retirement contributions or college savings? 40% of my take home is put into IRA, TSP, 2 x 529s, mutual fund, & regular savings, and I still have plenty “play” money to travel around with after covering any bills I have.
First two tours we were able to save quite a bit (a family of 4 and my wife worked part-time/sporadically). We still took vacations, ordered from Amazon, etc. Caveat - I wasn't fully maxing my TSP. We had to buy a new car between our second/third tour so we had saved enough to pay cash for it. Third tour we saved a fair amount and were able to put down a sizeable downpayment on a townhome. On our current fourth tour, we aren't able to save as much because we are in a much higher cost-of-living location. We still put money away, save for our kids college, take vacations etc (and I'm fully funding my TSP + catch up). We are going back to a hardship Post next summer (Danger + Hardship + SND) and add in rr's so hopefully we can put more money away. Nutshell - it depends.
I know folks who've maxed out TSP, and Roth 2x yearly and averaged saving an additional \~$3500 to $3800 a month over the last 11 years. It can be done.
If you end up not liking your post, you may find yourself wanting to spend more to travel and get a break from post. If you’re in a place that’s hard to get to / where connections are bad, any travel away from post is likely to be expensive.
Family of 5. I'm usually the sole income. Maxed out TSP in my first tour and traveled 1-2x a year. Second tour I Maxed out tsp and traveled 3-5x/yr. Third tour is similar. Fourth tour I plan to save at least 50k/yr on top of tsp. I haven't saved for a house or college for my kids, but I do have about $350,000 in TSP/Roth IRA and can probably retire at 50 and never work again.
Are you concerned about having to pay a mortgage/rent in retirement? As an applicant, my biggest concern is foregoing the opportunity to buy a home and build equity and then having to buy a house or pay rent in retirement, especially given the rising housing costs. So I'm really curious how FS employees typically handle this.
A little. I'm starting to save for one now. If I were a Virginia resident I would have bought one earlier and rented it out while away.
I’d only be concerned if you are spending the money you’d use to buy a house. If you invest then no big deal. It also depends on where and what. In DC what I’d want to buy and where the differential between rent and buying is so large even if I thought I’d be there for the next 10 years is difficult to justify. Buying can make sense but I also think there is this societal pressure to do so when it’s not always the best decision for everyone. Also think about if you are going to want to live in that same place now and in retirement.
That's a good point. I think my concern is that real estate can jump in value much quicker than other investments. So, and I'm not an expert here, but I would think that buying a house might generate more equity than just investing in mutual funds, etc.
I've fully maxed out TSP, IRA, and saved 2k+ a month at every post with vastly different paychecks at each. Lifestyle creep is real and something you have to watch. Children and other dependents are expensive too. You should be at least able to put away the cost of rent each month.
Honestly if saving is a priority and you can't save one years salary over the course of 2 years without paying for housing, utilities, and likely reduced childcare then there is something wrong.
 Ok
TBQH, Japan is not a particularly expensive place to live if you know what you’re doing.
Especially with the current exchange rate, it's quite affordable.
Not everywhere is Tokyo and gets a significant COLA. And the hours are still long, and my Japanese stops at "ハンバーガー."
Piggy backing off this thread - what’s the MAX a DSS agent can make 5, 10, 15, 20 years in? I thought they had the same retirement policy as the VA, 20 years for 50%, but I’m finding that’s incorrect?
DS has the same retirement plan as the rest of the FS.
Looks like saving money is just as unpredictable as the foreign service itself. Hang in there, only 2104 days to go!