Dan delves into the FERS 62 Factor, starting with a review of the basic FERS formula. He highlights the advantages of waiting until age 62 to retire, emphasizing how this decision can significantly boost pension benefits. Additionally, he explains how the FERS pension is calculated based on an employee’s high-3 earnings and briefly touches on the possibility of gaining an extra year of service credit through unused sick and annual leave without the need for extended employment.
Next, Katelyn examines the belief that the S&P 500 index is overvalued, referencing Nobel Prize winner Robert Shiller’s research on market bubbles and stock price predictability. She dispels myths about C funds, explores Shiller’s CAPE ratio for predicting 10-year stock market returns, and discusses the risks of market timing. Katelyn also highlights the historical peaks of the Shiller PE and emphasizes the importance of diversification in investment strategies.
