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Big Jump in COLA Calculation for Federal Retirees

Pay

Analyst
DOD
Wed Jan 2, 2008 9:35 AM

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The entire pay issue for civilians is a joke compared to the pay i made while on active duty. I brought home more (net) as a tech Sgt in the Air Force than I do now as a GS12. Little did I know that civilians make so little compared to the active duty.

So what difference does the COLA make in the bigger picture of things?

Re: Pay

Salior
DON
Wed Jan 2, 2008 1:00 PM
The CPI minus one for FERS retirees when inflation is 3% or greater is a HUGE problem for future civilian FERS retirees. Since most experts expect inflation to be 3% annually or greater that means that FERS retirees will lose purchasing power at the rate of at of 1% per year on their basic annuity. After 30 years in retirement that will hurt. Yes, we are better off than most traditional pensioners in that we get some COLA but if you are planning on your basic annuity keeping up with inflation you are wrong. What can you do? Max out your TSP. Pray that equities return their traditional growth rate of 8 - 12 % per year and keep at least 60% in stock--even throughout your retirement. My recommendation for retirement allocation is 20% in each of the five TSP funds (that's 40% bonds, 60% stock). That allocation is also excellent non-overlaping diversification. Good luck--we all need it!

Re: Pay

Analyst
DOD
Wed Feb 6, 2008 9:30 AM
We just keep voting those "good old boys" back into office so what do we expect? Feds have not had a decent cost of living increase since the 80's I believe that was Nixon, but it's been so long I really can't remember.

Your Statement needs to be balanced.

Retired Special Agent CID
Treasury - IRs
Wed Jan 2, 2008 5:20 PM

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The article stated, "Federal retirees have an advantage over many in the private sector in that their annual retirement income goes up each year." True, but the statement is not balanced.

As I recall from when I was hired in 1962, the Government stated they would "match" my retirement contributions. Of course that never happened or I'd have a larger pension. I also paid 7.5% of my gross AND Federal, State and Local income taxes on that amount. 401Ks etc & employer paid retirement in private industry were / are tax free when earned. In essence, I paid 13.5% of my gross salary for a pension that expires when I do without any residual as in the "private" sector's 401Ks etc.

The Social Security I earned was reduced by 60%, which is not done in private industry. My Medicare, 1.3% of my gross pay, was unneeded based on my medical. Of course the insurance company, for the same premium, later reduced available benefits necessitating medicare. In summary we subsidize the private sector

Re: Your Statement needs to be balanced.

hr specialist
dod agency
Wed Jan 2, 2008 5:43 PM
Since you are in CSRS, the government has more than matched your payments into the system--or it will have by the time you expire. For most people under the CSRS system, the retirement plan equaled about 33% of your total compensation. Very few private sector retirement plans matched that. Also, you did not pay into social security. IN short, you are griping about a great deal that very few other retirees outside of federal service will ever have and can only dream about. The glass is not half empty. YOu are very fortunate to be in your financial position with a federal retirement under CSRS.

COLA FOR Retirees

Current Employee
DoD
Thu Jan 3, 2008 12:16 PM

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So sad to see the complaints concerning the 2.3% COLA for Federal Retirees. My Dad retired from private industry and had great bennies. When he passed away my mom received 50% of his pension and never had a raise. Several years later, the wonderful Health, Eye, Vision and Dental was completely discontinued. She was left with only Medicare and had to purchase supplemental health insurance. It was sad and she was scared to death that what little funds she had socked away would be eaten away by high premiums and residual medical bills. I think we feds one and all should be grateful that we are blessed with great retirement and benefits packages. There are folks in much worse situations than us out there in the USA. Just talk to a few folk who've lost it all....

Thank You!

Account Analyst (retired)
USDA -- Forest Service
Thu Jan 3, 2008 3:14 PM

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Just a note to thank you for keeping this news email free to everyone! I retired in April 2007 and switched my subscription over to my home address and it is a big help in keeping me up to date on what is going on in the Federal Worker arena. I have several friends who will be retiring in a couple of years and I have added your email address to messages I have sent them. I hope that they have subscribed. Knowledge is power...and it's so very important to have as much knowledge over what happens to you before retiring, during the retirement process and the first 6 months after you retire. When something doesn't happen like it should a person knows where to go for help.

Thank you and keep up the good work!
Rosalie McCreary

COLA's

Retired
USPS
Thu Jan 10, 2008 9:11 AM

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Don't know why so many FERS retiree's complain about their diet COLA's, as CSRS is a full retirement annuity and FERS has three components. FERS at 1/3rd with smaller COLA, Soc Sec at 1/3 with full COLA and matching TSP 1/3 of their retirement package. Not much to complain about!

Re: COLA's

Aviation Safety Inspector
FAA
Thu Jan 10, 2008 3:42 PM
It's not a complaint. It's a statement of fact. The fact is that 1/3 of FERS retirement looses 1% every year,CSRS does not. If the full COLA that CSRS receives is not enough to keep up with inflation, imagine having 1/3 of your retirement income guaranteed to loose purchasing power every year. No try to convince me that you wouldn't be unhappy about that situation.

Re: COLA's

Nameless, Faceless Nobody
DOD
Wed Jan 30, 2008 10:19 AM
And of course when the government changed the retirement system to FERS they were definitely thinking of improving each employee's retirement.

Just as NSPS will improve the employees's overall pay and personnel status.

Sorry, but I seriously do not think that any changes made these days are intended to improve life for the employees or retirees.

COLA

Retired Federal Employee
DLA Battle Creek Michigan
Mon Feb 4, 2008 1:42 PM

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I was offered a VERA and took the option to retire early. The problem that I am seeing is that if a Federal Employee takes an early out without being 62 we are punished by not getting the full COLA that is due to us.

Congress really needs to take another look at this, after all they are trying to get rid of the older Federal employees. Why should we be punished when we take the opportunity for a VERA or VISP.

I worked for DLA in Michigan and the only employees that were even offered the VISP were the GS 15's and 14's. They certainly did not need the extra money but it was given as hush money for the wrong that they did.

So now the lower grades have to suffer for it.

Re: COLA

Analyst
DOD
Wed Feb 6, 2008 9:34 AM
And we need to take another look at Congress.

CSRS vs FERS

GS-2210
IRS
Tue Feb 5, 2008 5:09 AM

Post Reply

Back when FERS came out, mid-80s?, IRS pushed real hard for us in CSRS to switch to FERS.

In talking to friends we couldn't see any benefits to switching. Finally decided that with them pushing so hard it sure wasn't meant to be for our benefit.

It wasn't.

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