When you bought your last new car, did you take the one on the showroom floor, or did you order one with all the newest add-ons and gadgets?

A couple of weeks back, we asked feds what they’d do if Congress approved a long-shot Defense Department request to upgrade the 1990s $25,000, low-horsepower buyout up to a $40,000, 21st-century model to get more bang for the buck.

It’s not surprising that the vast majority of feds said would love it, and take it, if they got the higher horsepower new model buyout.

Loraine L. said, “Heeeelllll yes. I’m outta here if it comes to my agency.”

Leonard L. said a $40,000 bonus offer “would be like winning the lottery to me. I am making up some temp time that I had from years ago or I would be gone now. That would be icing on the cake.”

A rural letter carrier wrote, “There were many in the Postal Service who would have taken the $25K buyout if it was offered. The proposed $40K I’m sure would be directed toward management, again, and not for the average person that actually handles the mail.”

What is surprising is how many — maybe 20 percent of all the comments we got — found the buyout upgrade Defense is seeking from Congress to be lacking. In fact, some said it was actually insulting. Even when you think you’ve seen it all (or nearly all) is surprising that so many would say $40,000 wasn’t nearly enough.

One reader said she’d pull the plug, if the buyout was $45,000. Given the timeline and Congress’ political preoccupation, a $40K buyout would be a minor miracle. Upgrading it by another $5,000 definitely isn’t in the cards.

Half a dozen people said they wouldn’t even consider a $40,000 buyout unless it was tax-free. And not subject to any other deductions. While $40,000 free of taxes and other pesky deductions, like FICA and state taxes, would be a pure $40,000, it is likely as airborne penguins.

Margie L. said she’d “consider a $40K buyout if the rules allowed me to receive the FERS supplement which I’m entitled to when I retire at MRS-30 until I reach age 62.” Her stipulation points to a major difference in the buyout (of any amount) between FERS employees and those under the CSRS plan. CSRS workers get larger annuities and are eligible for COLAs at any age. FERS retirees get smaller annuities and their partial inflation protection doesn’t begin until they are age 62. For most CSRS employees (which most retirees were in the 1990s), the $25K buyout was found money. For FERS workers, it is much more important, and the reason so many are wary of any buyout.

Mark F. said, “I wouldn’t even consider a buyout unless it was both tax-free and not subject to other deductions.” He said $25K is not enough and only “the full $40K would do it for me.”

Edith J. from Jacksonville said, “If they crunch the numbers, a buyout, be it $25,000 or even $40,000, is never a wise financial move. The buyout is a lump sum and it’s gone. Then you are on retirement level income. Working longer means a check every two weeks, plus the value of pay raises, within-grades and any promotion. It is especially true that if you desperately need a large lump sum of cash the worst thing you can do is to quit your daytime job. As your column pointed out the other day leaving the federal fold is not a good move.”

Rafael F. said the timing of any buyout is a major factor: “I would accept it in January, due to the fact that if you accept this year it will increase your percentage in the income tax. … Will it come or not?”

Nearly Useless Factoid

By Michael O’Connell

In 1740, Paulo Adami of Venice, Italy, was granted a license to open the first pasta factory.

Source: International Pasta Organisation

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