The Long Ranger Rides Again

In the metro Washington area (parts of 3 states plus DC) a daily commute of 200-miles is the norm for a growing number of feds. And government contractors too. People who do a 50 mile round-trip don’t even think it’s worth mentioning anymore.

The same thing is true for many, many feds in Los Angeles and San Francisco , Cincinnati and Atlanta, and for those who live in New Jersey or Connecticut and work in New York City. Or Boston-based feds whose spouses, kids and pets live in New Hampshire.

I spoke with two local long ranger commuters. One lives in Pennsylvania and works in D.C. The other lives on Maryland’s Eastern Shore and works at the Pentagon which just a couple of air miles from my office. Both originally moved way beyond the Beltway because of housing costs. It was cheaper there than here. That, of course, was before oil hit $100 a barrel.

Both commuters wish they didn’t have all that driving, but that’s life. One found a bright side to the situation. She’s making a DC salary which is higher than if she worked where she lives. And most importantly, that pay differential will be used to compute her annuity when she is ready to retire. Those benefits are based on salary and service, and are computed on the highest 3-year average salary. Most private retirement plans (if they still exist) use the high 5-formula.

The fed who votes in Pennsylvania but works in DC says if she worked for Uncle Sam in her hometown she would be paid $80,558 but, because she does her thing here, her salary is $86,046. The just approved pay raise was worth 2.99 percent to feds in her area, but by virtue of her commute she got a 4.49 percent raise.

So is it worth it? Does the higher salary and bigger potential pension make it a plus? We’d like to hear your story, and especially from people with very long commutes. How to you maintain your sanity? Do you listen to CDs, (or WFED AM 1050)? Do you talk with carpoolers or sing Broadway show tunes. Let us know.

Uncle Sam’s CD

Thousands of long-time feds are participating in the Voluntary Contrbutions program. It allows them – people under the CSRS and CSRS Offset programs – to invest after-tax money into an account that will pay a guaranteed 4.875 percent through December 31, 2008. Last year the VC’s guaranteed 12-month rate was 4.95 percent.

Many feds don’t know about the VC program and others confuse it with the Thrift Savings Plan. Most of the 600,000 workers still under CSRS (or the CSRS Offset) are eligible but only about 13,000 actually participate. Once they’ve established an account with OPM, they can contribute money by personal check, in increments of $25. They can contribute as often, or infrequently, as they like. And they can put in up to 10 percent of their total lifetime federal earnings. Upon retirement they can withdraw the money (paying taxes only on the interest earned), use it to boost (slightly) their CSRS annuity, or rolling the money over into an IRA and then, under certain circumstances, roll it over into a Roth IRA.

For details click here.

Breaking the Useless Factoid Format

It was 65 years ago today that the highest-capacity office building in the world was dedicated. According to wikipedia, the Pentagon boasts a five-acre central plaza, the world’s largest “no-salute, no-cover” area (an area exempt from the normal rule that, when out of doors, U.S. military personnel must wear hats and salute superior officers) outside of a combat zone. Construction began on September 11, 1941. Happy Birthday, Puzzle Palace!

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