How much longer can you afford to work?

Facing pay freezes, cost of living increases and hikes in retirement payments, some feds may wonder if its worth going to work these days, says Senior Correspondent...

The way some people figure it, long-time federal workers often have more take-home spending money in retirement than they now have working every day?

So why not stop fighting traffic and pull the plug?

Long-time workers under the CSRS retirement system can get anywhere from 56 to 80 percent of their salary in retirement. And then their are those annual cost of living adjustments that, in recent years, have been bigger than pay raises for retirees. In addition, deductions for the TSP and retirement contributions would end and taxes (in most cases) would be lower.

Now a numbers crunching Internal Revenue Service worker has come up with a hard-math reason that ranks retirement over work. Here’s how she sees it:

“Hmm. Why are so many feds either unhappy, quitting or retiring?

Social Security/CSRS COLAs:

  • January 2009 — 5.8%
  • January 2010 — 0.0%
  • January 2011 — 0.0%
  • January 2012 — 3.6%
  • January 2013 — 1.7%
  • January 2014 — 1.5%
  • January 2015 – 1.7%
    TOTAL: 14.3% over 7 years — Cola increases SS citation

Raises for federal employees:

  • January 2009 – 3.9%
  • January 2010 — 2.0%
  • January 2011 — 0.0%
  • January 2012 – 0.0%
  • January 2013 – 0.0%
  • January 2014 — 1.0%
  • January 2015– 1.0% (proposed)
    TOTAL: 7.9% over 7 years

Without getting into increasing health care costs, which both retirees, employees and seniors face, the employee raise column does not include an approximate 3 percent additional that new employees must pay for their FERS retirement benefit: Yes, the “generous” FERS retirement benefit of 1 percent per year. The benefit is, for example, you retire making $100,000 a year, and work for 30 years, the FERS benefit is $30,000 per year. AFTER of course you’ve paid in 4 percent a year for the new hires. For simplicity’s sake, let’s assume you earned $50,000 for 15 years, then $100,000 for the next 15 years. The amount you would have to pay into FERS under that scenario is $90,000. Plus you’ve paid Social Security at approximately 6 percent a year. So before you feed and clothe yourself, you’ve paid 10 percent of your salary in FICA taxes and the mandatory FERS benefit. And after working for 30 years and giving the government your $90,000 you will get $30,000 a year for life, less if you request a spousal benefit or health insurance. And when you qualify, after giving the IRS $180,000 in FICA payments, you’ll get whatever you get from Social security. The scenario is less dire for FERS employees who pay less for their FERS benefit at approximately 1 percent, but it is still not a generous benefit, as many think it is. The bottom line is that the financial problems of federal employees being underpaid is what is driving dissatisfaction.

“I am in charge of my elderly parents’ finances. I see the automatic Social Security COLAs and the automatic FERS COLA increases as my Dad is a federal retiree. I see the expensive Medicare treatment bills that come with the “charge to you: $0″, when my medical and other bills keep going up with NO RAISE. If this situation does not change SOON things will get even worse. People are leaving in droves, and of course who can blame them — next year they’ll get a raise (COLA) retired!!” — LA at the IRS


NEARLY USELESS FACTOID:

By Michael O’Connell

On the top of the Empire State Building, the static electricity is so strong that couples on the observatory level can see sparks when they kiss.

Source: CNN


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