5:27 am, May 24, 2015

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  • 28

  • Does It Pay to Work
    Tim's Reaction
    A recent article by Robert F. Benson @ Fedsmith.com provides a lot more food for thought. Based SOLELY on the last 13 years leading up to today, it compared 3 individuals who started out at the same identical income: Current federal employee, CSRS annuitant, and a FERS annuitant. Guess who comes out ahead?? While the past is no guarantee of future results, I can only say: "Case closed. Bye!"
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • The article
    I remember reading the article. I also remember that there were items that I disagree with, but do not remember what they were. One example is that a FERS annuitant will not start at the same retirement level for the defined benefit plan as a CSRS annuitant unless the FERS annuitant is at a much higher grade level. Note also that the TSP is a variable based on contributions, how they are invested, what happened to the investments, and whether you are CSRS or FERS. I am not happy with that cite, but that is only my opinion. Others could and should have different opinions.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Does it pay to work?
    I believe that working for no pay raise but getting an additional 2% in future annuity (at least for CSRS) is, well, I won't say. But retiring and, possibly, getting a 3%+ COLA in 2013 sounds like the better deal. After 38+ years, I figure that's good enough. See ya!
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • COLA vs raises
    If one's annuity was going to be 100% of their current pay, then a 3%+ COLA would be better than an equal or lesser pay raise. But no one gets an annuity equal to 100% of their current pay (the theoretical max is about 82%?), so the COLA is worth proportionally less than a pay raise of equal %. (Equal %s, but unequal %s.) To someone earning $100K and eligible for a $50K annuity, a 3%+ pay raise would mean >$3K of annual income, while a 3%+ COLA would mean >$1.5K of annual income.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • retire now or later
    Your correspondent is mistakenly assuming she can retire in December 2011 and get the full COLA immediately added to her annuity. Wrong -- the COLA is pro-rated in the year you retire by the number of months you were retired in that year. You do not get the full COLA for the previous year, just because you retired in that year.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • retire now or later
    Shelley also mistakenly refers to the possible comparability pay increase in January 2013 as a COLA-based increase, which would not be the case. The suspended comparability pay increase process is not directly linked to the BLS-calculated COLA process. Instead, the comparability system is based on a different BLS measure, the Employment Cost Index, which essentially is based on average salaries paid by non-Federal governmental and private sector employers. While the ECI can be indirectly influenced by increases in the cost of living, it is at bottom a very different metric.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • I did the math
    Larry in MD
    The situation is complicated and varies by CSRS, FERS and years of service. For me with 36 year in I'm gone at the end of the year. Simple math. I look at my pension 2013 and beyond. Next year is fixed. If I stay another year my pension goes up by the 2% points - that translates into a 3.3% increase in the pension. If I retire this January my pension in 2013 will got up by 11/12 of the next year's COLO. Bottom line is that if inflation is 3.6% or higher next year then my staying around and working for another year I am likely to find that my pension in 2013 is lower than it would have been if I retired in Jan. 2012. And if it is lower in 2013 it is lower forever. With pay freezes beyond next year the situation only gets worst.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • I confirm the math
    I agree with Larry. I did this calculation about 6 months ago and came up with the same 3.3% figure.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Let's ask Tammy
    I know about the 2% for each additional year, but would like to hear from Tammy Flanigan on the should I stay or should I go question. Assuming you are at or past retirement eligibility and we assume no cola for at least 3 years for Feds??
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • "...hear from Tammy Flanigan on the should I stay or should I go question"?
    FERS Fed
    I think Tammy would say that if you're asking whether it's better to get a 3.6% COLA or a 2% 'bump up' in your pension by working another year, you might be asking the wrong question(s) about retiring. Better know the answers to what you want/can/need to do in retirement first, then do the math.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }