sequester whining

[sdduuuude]

dup

[Anonymous]

BG, just please stop opining about topics of which you have no knowledge. FERS retirment is even worse as it relies mostly on TSP (401K) and SS vs. guaranteed annuity.

But that is still irrelevant to the argument. The point is, why do you assume defense workers who will be “let go” will be eligible for retirement? That is a complete non-sensical conclusion. And even if that was the case, even in the best scenario they would take a minimum of 40% pay dump as I have already said.

But in the more realistic scenario, the majority of folks layed off will NOT be eligible for retirment and the majority will NOT be federal workers in the first place. These folks will then rely on unemployment checks for income, taking a MASSIVE hit. WHen that runs out, they will have to start withdrawing from their 401K, or sell their cars, house, etc. It is a downward spiral. There is no scneario where this isn’t bad.

Please lay off the crack pipe because I can’t believe I’m debating someone about whether defense industry layoffs will hurt the economy or not.

[EconProf]

OK, you guys have each had your say and more or less exhausted the debate about the sequester’s impact on local, San Diego employment. Let’s get back to the bigger philosophical question: how big is the dollar impact of this cut in total government spending, and what should our take on that be?
At $85 billion, it represents less than one-tenth of this year’s DEFICIT spending. It is under 3% of government outlays. IOW, about 40% of current government outlays this year are borrowed from our children. Isn’t this a bit, uh, immoral? Shouldn’t we be looking for ways to cut a lot more? Shouldn’t congress and the President have been identifying the many egregious examples of waste, overspending, and over-promised entitlements in recent months? Neither side has had the courage to name specific cuts because that gives the other side the chance to rail against their heartlessness. This is a game that has been played most effectively by the Democrats, and now the Republicans are understandably standing down and saying if the only cuts we can get are blunderbuss, accross the board ones, we’ll take them. It is better than nothing.
Incidentally, the “cuts” are in reality only a cut in the rate of growth. Actual government outlays, with the sequester, will still go up this year in absolute terms, from $3.538 to $3.538 trillion. Some hardship.

[bearishgurl]

CAR and deadzone, are you forgetting about the TSP “Agency Match?”

[img_assist|nid=17174|title=TSP Agency Contribution Chart|desc=|link=node|align=left|width=463|height=320]

https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml

I stand by my assertion that a FERS employee CAN approach 100% if they contribute the maximum for Agency Match (5%).

Even though the CSRS (which had more generous formulas for employer match) converted to FERS in 1986, IIRC, a large majority of existing Federal employees at the time converted to FERS (or were automatically converted if they made no election). As I recall, there was some kind of incentive offered to do so.

In any case, any remaining active CSRS employees are in the process of retiring or are soon to do so.

Are there any current or retired Federal-worker Piggs here who can shed some light on how they made out (%-wise) or will make out in retirement?

Besides all the “rumor-and-innuendo hoopla,” I don’t see where you’re getting the idea that defense contractors will be affected by the Federal sequester. I checked around this morning and this is the only piece I could find which mentions this “long-term concern” published by a Washington “think tank” who seems to be fueling this panic.

. . . The cuts are scheduled to take effect March 1, but they wouldn’t come all at once. For the current fiscal year, the cuts would total $44 billion, which sounds like a ton of money but represents just 1.2 percent of planned federal outlays. Defense contractors likely would be among the individual industries hardest hit by the cuts, but even there layoffs remain “speculative and unforeseeable,” Assistant Secretary of Labor Jane Oates said. But the Pew Center on the States said cuts in discretionary defense spending could cost more than 400,000 jobs over the next 10 years in Florida, Maryland, Texas, California, and Virginia — the top five states for defense contracting.

http://usnews.nbcnews.com/_news/2013/02/21/17042974-sequester-madness-what-it-is-why-it-matters?lite

Does any Pigg have any concrete evidence from a reliable source, (preferably someone close to the “horses mouth”) that Defense contracting is going to be cut or decimated after the “Federal sequester” takes effect March 1?

I’m not going to buy into the sheeple panic until I see otherwise. I’ve heard all this kind of talk from multiple levels of government before and all it ends up amounting to is that eligible workers are incentivized to sign up for retirement NOW and the remaining workers are “furloughed” a set amount or hours or days per month. After all the eligible workers have finally retired (6-9 mos later), it all blows over because the furloughs are extended.

I see non-critical Federal Agency workers furloughed 1-2 days per month until October 1, 2014. And then it will be back to “business as usual” for their now “skeleton crew.” They will eliminate non-essential functions and thus will “make do” and all will be well.

Sometimes I think people on this board who were unsuccessful at purchasing real property in SD while the getting was good are now grasping at straws to buy into the belief that the CA coastal-county RE market is poised for another deep crash tomorrow. deadzone, could this possibly be you?

This too, shall pass :=0

[ltsddd]

[quote=bearishgurl]
I stand by my assertion that a FERS employee CAN approach 100% if they contribute the maximum for Agency Match (5%).
[/quote]

BG,
It’s basic math. Assuming someone who had worked for 30 years and is qualified for retirement. That individual, under FERS, would get about 30% (1% for each year of service) in replacement income from the “pension”. Do you really believe that an individual’s 401K/TSP account could replace or generate the other 70% of the “loss” income when someone retired? For how long?

[ltsddd]

[quote=bearishgurl]

They still work for a number of reasons:

-Their bosses have begged them to hold out for a few years because their intellectual property is still needed by the organization (this is common);
[/quote]

Bull. Really, you stick around b/c your boss begged you? Even when it makes absolutely no sense at all by not retiring? Why work when you could stay home and still get the same $$ (according to you). Or why not double-dip – collect the retirement benefits while getting another job.

[quote=bearishgurl]
-They still owe a small amount of mortgage or auto loan and are endeavoring to pay it off before retirement; and
[/quote]

More bull. Again, if your claim is true that there is no “loss” of income when they retired then what difference does it make whether they’re paying their mortgage with their paychecks or with their retirement income.

[quote=bearishgurl]
-they don’t know what they would do with themselves if they didn’t have a place to go to at 7:00 a.m. five days a week 🙂
[/quote]
You’re reaching here.

[quote=bearishgurl]
Actually deadzone, when you take out the gas, lunch and other expenses of going to work every day, many “retirees” with pensions are actually money ahead AFTER retirement![/quote]

Bull. I don’t think there’s any truth to this. Mathematically, the numbers don’t add up. If you truly believe in this last assertion then why on earth did you make all the previous crazy assertions why they should not want to retire?

[SD Realtor]

Econprof very good points. What is astounding to me is that if all of the “sky is going to fall” predictions due to the sequester are even remotely true, and that the sequester is such a miniscule fractional amount of the overall budget, then we are TOTALLY screwed and in no way will we ever, ever, ever be able to balance a budget again.

[bearishgurl]

[quote=ltsdd][quote=bearishgurl]
I stand by my assertion that a FERS employee CAN approach 100% if they contribute the maximum for Agency Match (5%).
[/quote]

BG,
It’s basic math. Assuming someone who had worked for 30 years and is qualified for retirement. That individual, under FERS, would get about 30% (1% for each year of service) in replacement income from the “pension”. Do you really believe that an individual’s 401K/TSP account could replace or generate the other 70% of the “loss” income when someone retired? For how long?[/quote]

It’s NOT “basic math,” ltsdd. We would have to know what the employee made each and every year to learn what the agency contribution for that year was and how much a 5% withholding for TSP represented (assuming they always had 5% withheld). We would also need to know what year they started working in, learn if they may have had “broken service” and if so and for how long, learn if they ever paid FERS back for that broken service, learn how much sick leave they left on the books at the time of retirement, learn if they ever paid back any loans they may have taken out on their TSP account and learn how they allocated their TSP over the years and studied that performance.

It would not be uncommon for a GS-9/step 10 today for have started their Federal “career” out in 1983 as a GS-5 (making just under $20K annually).

See: https://www.tsp.gov/planparticipation/eligibility/typesOfContributions.shtml

Transferred to the Federal Employees Retirement System (FERS)

At time of transfer, had at least 5 years of creditable civilian service covered by either:

Civil Service Retirement System (CSRS)
Social Security

(but not both-excludes service during which partial CSRS deductions were withheld)

Annuity will have 2 components:

FERS Component
CSRS Component

Computation of FERS Component Age Formula
Under Age 62 at Separation for Retirement, OR–
Age 62 or Older With Less Than 20 Years of Service 1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service 1.1 percent of your high-3 average salary for each year of service

and for CSRS computations, see: http://www.opm.gov/retirement-services/csrs-information/computation/

Computation

Here is how the CSRS annuity formula is calculated:
CSRS Annuity Formula
Years of Service

What You Receive
First 5 years of service 1.5 percent of your high-3 average salary for each year
Second 5 years of service Plus

1.75 percent of your high-3 average salary for each year
For all years of service over 10 Plus

2 percent of your high-3 average salary for each year.

…

Maximum Payable

The maximum benefit you can receive from CSRS is 80 percent of your high-3 average salary, plus credit for your sick leave. This limit generally affects only those who have more than 41 years 11 months of service when they retire.

An employee with 41 years of creditable service could feasibly be as young as 62 years old today.

If an employee with 30+ years service retired today, they could still be covered until CSRS or a combination of CSRS/FERS. CSRS retirees did not receive an Agency Funds match from TSP as this was part of the incentive in ’86/’87 to convert to FERS. But they still contributed to TSP.

If you’re a CSRS employee or a member of the uniformed services, you have to make a TSP contribution election through your agency or service to establish a TSP account. You do not receive agency contributions.

See numbered page 2 of this publication (wait to load):

https://www.tsp.gov/PDF/formspubs/tspbk08.pdf

So, yes, it is entirely possible today with the combination of CSRS/TSP, CSRS/FERS/TSP (w/partial agency match) or FERS/TSP (w/full agency match) to retire at or close to 100% of one’s full highest of average 3 years salary.

[ltsddd]

[quote=bearishgurl]
Maximum Payable

The maximum benefit you can receive from CSRS is 80 percent of your high-3 average salary, plus credit for your sick leave. This limit generally affects only those who have more than 41 years 11 months of service when they retire.
[/quote]
80% is not 100%

[quote=bearishgurl]
So, yes, it is entirely possible today with the combination of CSRS/TSP, CSRS/FERS/TSP (w/partial agency match) or FERS/TSP (w/full agency match) to retire at or close to 100% of one’s full highest of average 3 years salary.[/quote]

Read the information from the links you provided again, carefully. CSRS retirees get a big chunk of their retirement income from the “pension” – up to 80% of their salary according to you – and very little else. What they can contribute to TSP isn’t much. FERS will get an even smaller “pension” and better hope that they MAXED out their TSP contribution and the performance of the stock market over the years to even get close to what CSRS retirees get at 80%.

Here’s news for you. A quick search on the internet will tell you that these people are contributing an average of $4900/year to their TSP with an average balance of about $65K. Maybe the financial security of the baby boomers you were talking about is just all fancy fantasies.

[bearishgurl]

ltsdd, it is clear here that you have no experience in government.

My kids had SEVERAL elementary-school teachers who didn’t retire until their 36th-38th year. One teacher didn’t retire until he had taught 40 consecutive 4th grade classes in two district schools. He had their class pics posted on one his classroom walls in chronological order. Yes, showing him standing next to his class sporting every variation of sideburns, full beard, horn-rimmed glasses and Angel Flight pants :=0

A LOT of my kids’ classmates parents were in those photos!

He and his colleagues stayed on for their love of teaching and the kids. CA public school teachers can retire with 30 yrs svc with full pay but many don’t.

They LOVE getting up in the morning and going to school.

The same applies to longtime DOD workers who worked most of their “careers” in one agency. They have a boss they work directly for whom they like and respect and they will wait for their boss to retire before they do. When a new boss comes in who is ranked O-5 and up, this new boss will frequently bring their own assistants with them that they like and trust if they are local, or help them transfer-in if they wish to do so. The displaced assistants of the old boss will either retire or transfer to another dept/division.

[bearishgurl]

ltsdd, you didn’t do the math right so there is no sense in arguing with you.

I happen to know retirees at ALL levels of government who had an excess of $300K in their TSP or 457 plans at the time of retirement.

Even assuming arguendo a 41-yr Federal worker retires at ~80% today and never contributed to TSP or a 30-yr Federal worker retires at ~70% who DID contribute to TSP, why do you think they need MORE to have the same standard of living?

Their income-tax bracket might be lower in retirement. Their primary home might be paid off (or have ~$400 mo payments) and their property taxes could very well be $500 – $1000 year.

The majority of these longtime gubment worker-bees (incl teachers) have been living in the same house for decades. Teachers and policemen have been notorious rental-property investors (within their longtime school or beat assignment) often have rental income to supplement their pensions.

You assume because the “masses” (Gen X/Y and probably representative of most Piggs) choose to live in more expensive areas and have to have new everything constantly that the “soon-to-be-retired” gubment-worker crowd prefers the same.

Nothing could be further from the truth.

It doesn’t take a “fortune” for these workers to survive in retirement. I’ve been saying this here for a few weeks now. It’s just not all “gloom and doom” for boomers as some are claiming it will be. I just don’t see that constellation from where I sit.

…. yawn. It’s a “non-issue.”

ltsdd, instead of worrying about how the Federal sequester is going to affect the household finances of retiring DOD workers transitioning to a pension and investments, you might do better in life to apply yourself for one of these jobs and see if you can last long enough to become vested in FERS and receive a 5% TSP funds match :=0

Boomers are on a “downhill slide” now and we have “earned it.”

Now, go back to work and finish raising your own family (if you have one) so YOU can eventually “retire.”

[Anonymous]

BG, if you can’t understand how the sequester will cause job loss in the civilian defense contractor business and beyond then you are clearly too ignorant to be having this discussion.

Regarding federal retirement, again, you are in a fantasy world. Give me one exameple of a current federal employee who is guranteed to make close to 100% of his salary in retirement? Doesn’t exist. I work in the business. You clearly only have experience with folks who worked in govenemtn service many many years ago if at all.

And again, you assume most of those folks who will be laid off will also be retirement eligible. That is one of most ignoratn speculations I have ever heard.

[bearishgurl]

[quote=deadzone]BG, if you can’t understand how the sequester will cause job loss in the civilian defense contractor business and beyond then you are clearly too ignorant to be having this discussion.

Regarding federal retirement, again, you are in a fantasy world. Give me one exameple of a current federal employee who is guranteed to make close to 100% of his salary in retirement? Doesn’t exist. I work in the business. You clearly only have experience with folks who worked in govenemtn service many many years ago if at all.

And again, you assume most of those folks who will be laid off will also be retirement eligible. That is one of most ignoratn speculations I have ever heard.[/quote]

If you work in the “business,” I’m sorry if you feel “insecure” right now, deadzone. Perhaps you’re overreacting to all the “rumor-and-innuendo” mills.

I actually have several current neighbors who are Federal retirees (some fairly recent) and they are ALL doing just fine.

I can’t give an “example” of a Federal worker’s exact pension calculation and neither can you without the answers to many variables.

Yes, the “retirement eligible” government employees (on EVERY govm’t level) have ALWAYS been the “low-hanging fruit” when cutbacks were announced. These employees ARE the FIRST to be pandered to in order to accept their “golden handshake” and move on.

The next “lowest-hanging fruit” for layoff is the unvested *new* employee (typically with under five years svc). They will go if there are not enough workers to retire and the furloughs won’t cut into the budget deep enough.

These “relatively new” employees will be given reinstatement privileges at the time of layoff in case their agency finds it necessary to hire that particular classification again.

[paramount]

[quote=bearishgurl]

I actually have several current neighbors who are Federal retirees (some fairly recent) and they are ALL doing just fine.

[/quote]

Of course they are…I wouldn’t expect anything less.

[bearishgurl]

[quote=paramount][quote=bearishgurl]

I actually have several current neighbors who are Federal retirees (some fairly recent) and they are ALL doing just fine.

[/quote]

Of course they are…I wouldn’t expect anything less.[/quote]

If you only owed ~$22K on your primary residence (currently worth ~$350K), or owned it “free and clear,” you would be “doing fine,” as well, paramount 🙂

[Author]

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