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bearishgurl
Participant[quote=Jazzman]CA Renter, your comments much appreciated, and your reasons or buying are solid. It’s encouraging to see buyers (myself included) have retained a healthy dose of skepticism. I drop in from time to time as I still think this forum is good.
BG I just paid my property tax bill from Feb to Aug 2013 of $187.55. I wish I knew how to post a copy of the bill on the forum. PM me and I’ll send a copy. Crazy isn’t it? My retired next door neighbor pays even less. It’s a hard life out here in Hawaii :)[/quote]
$750 yr taxes … not bad, Jazzman. How big did you say your condo in HI was again?
And can you keep the Piggs apprised of your search for a house in France? Inquiring minds want to know if you found something there that you will be able to “retire” in 🙂
Participantltsdd, 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.”
Participantltsdd, 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.
Participant[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 ComponentComputation 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 serviceand 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 ServiceWhat You Receive
First 5 years of service 1.5 percent of your high-3 average salary for each year
Second 5 years of service Plus1.75 percent of your high-3 average salary for each year
For all years of service over 10 Plus2 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.
ParticipantCAR 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
Participant[quote=deadzone]By the way, for federal workers, the annuity plan you are referring to (CSRS) was discontinued in 1987, so t only applies to workers who began federal service prior to 87. In this system, a retiree with 30 years service would get 60% of their salary. Also, these folks do not get social security. If you can do simple math, that is a 40% loss of income when they retire.
Now, back to sequestration, you are making a ridiculous assumption that the only workers who will be “let go” are federal workers that coincidently are also eligible to retire under CSRS. Of course that is complete non-sense. But even in this best case fantasy scenario, we are talking about a 40% loss of income.[/quote]
deadzone, YOU’RE living in a time warp. The Federal workers that will be let go will retire under FERS.
http://www.opm.gov/retirement-services/fers-information/
In addition, the vast majority of them also contributed to TSP.
https://www.tsp.gov/planparticipation/about/purposeAndHistory.shtml
With both of these plans combined, there should be NO loss of income for today’s Federal retirees.
Participant[quote=deadzone]BG, may I ask how old you are? It seems you are still living in a bygone era. Professional workers of today, defense or private industry, do not have pensions.
The days of people making as much or more money in retirment than working (e.g. San Diego firefighters) are over.
And anyway, you have a narrow and incorrect perspective of the defense industry. To you it is all federal workers (GS types). The majority of defense spending goes to defense contractors. When those companies lose contracts, thousands of people will be laid off. The income of those folks will therfore be decimated.[/quote]
I just looked at the article and watched the newsclip again. It only talks about possibly losing “Civilian DOD positions” in SD as well as Port District jobs (which are also Civil Service with some departments funded with Federal monies). The DOD positions are comprised of General Schedule (GS), General Management (GM) and Wage Grade (WG) positions. In SD, these positions work directly for the Navy and Marine Corps. The SD Port District is its own public entity and manages the port operations of SD Bay and Lindbergh Field.
The only jobs discussed in the newsclip were civil-service positions.
I haven’t seen the listing of the mandatory cuts for each region so don’t know anything about proposed defense contractor cuts for SD County.
It is typical for Federal workers and CA State and local government workers to receive a 100% pension (or very close to it in some local govm’ts) of their highest year’s pay (or avg of highest three years pay) as a monthly pension after 30 years of creditable service.
Any recent changes to those pension calculations were made for new hires in the last few years, NOT to active employees nearing retirement.
Participant[quote=earlyretirement]…BG, I wouldn’t take too much offense at what someone anonymous says on a message board…[/quote]
ER, you may have already come to the conclusion here that I have overly-thick skin where even raindrops pool over my shoulder :=]
Participant[quote=deadzone]Who are they going to fill it with? And what does that have to do with anything? THe point is the aggregate number of people employed directly or incireclty by the military industrial complex will go down. That is a net drain on spending and the local economy.[/quote]
It’s only a “net drain on the economy” if those employees who are no longer working do not have a sufficient income to be the “SD consumer” they once were or if these displaced workers leave the county in droves with their families in tow.
I don’t see the latter happening because the employees who will be “let go” will be the voluntary (and possibly incentivized) “retirees.”
It’s not going to be the younger, cheaper employee who may be raising a family.
The new Federal “retirees” won’t be going anywhere, IMHO (except to their homes to fill out their direct-deposit form for FERS).
Participant[quote=deadzone]The days of cush pension plans for federal workers are in the past. Plus, if said workers were eligible to retire with these great plans, then why are they still working? Obviously they need the money! Your examples don’t make sense. The assumption that someone’s income (and thus spending power) will not go down dramatically if they lose their job is idiotic.[/quote]
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);
-their employer pays most or all of their spouse’s healthcare premium and they would have to pay most or all their spouse’s premium out of their pension or seek an individual policy for a spouse who has a “preexisting condition”;
-They still owe a small amount of mortgage or auto loan and are endeavoring to pay it off before retirement; and
-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 🙂
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!
ParticipantAnd for every “transferred-out” military family (due to lack of funding for their particular mission), the Navy’s property mgrs will fill their vacated housing unit with another family … in very short order.
Participant[quote=deadzone]…That said, if there actually were to be major defense cuts, those of you who belive it will have no affect on local real estate are incredibly naive. You clearly don’t realize how many local jobs are reliant directly or indirectly on defense spending. It’s not just active duty troops or Spawar or viasat employees. for every lost job, there is a multiplier affect when that person moves out of the area or spends less due to loss of income.
…TO suggest defense cuts won’t affect real estate because “most defense workers own their home outright” is non-sense. YOu have no evidence to prove that most defense workers own their homes outright, you pulled that out of your ass. Even if 100% of defense workers who lost their jobs did own their home outright, the fact is that their income stream would go down considerably. That will affect how much they spend in the local economy, affecting local business.[/quote]
deadzone, as usual, you skimmed over my post and didn’t read it correctly. I never said any of those things. I stated that those able to “retire” would do so and go home to their homes in SD that they’ve owned for many years.
Whether or not they still have a mortgage is immaterial.
I don’t know about the Port District pension plans, but after 30 years on the job as a Federal worker, their monthly pensions will equal or nearly equal the DOD paychecks they will be leaving behind. And even the 20 to 30-year Federal employee who is at least 59.5 years old can withdraw from their Thrift Savings Plan to supplement their Federal pensions.
I’ve known LOTS of these workers in my lifetime and am currently living around a few and can safely say that they’re ALL doing fine and are still SD consumers and are not going anywhere.
Participant[quote=earlyretirement]…But I have no respect for someone that calls a bubble, sees prices crash tremendously and then try to say prices will fall forever and end up being a life long perpetual renter.
That just doesn’t make sense to me.[/quote]
I’ve seen a couple of handfuls of posters on this board that fall into this category, ER. Here, a few actually believed that SD County properties in prime coastal zip codes would eventually be “half off” if they just waited long enough, lol.
If you try to knock some sense into them, you are accused of being a “permabull,” a “pollyanna,” a “realtard,” or worse, a “NAR lackey.”
What these wishful-would-be buyers never took into account was that:
-the most desirable properties in the most desirable “coastal enclaves” in CA are frequently held by “the best hands;”
-those “best hands” will only sell when it suits them (and no family member has shown an interest in owning it), not a day sooner, and, maybe never;
-there wasn’t that much of a “run-up” in prices in these areas during the millenium boom as their were in other, lesser-expensive areas because a much higher “price floor” was in existence there BEFORE the millenium boom began;
-the “best hands” who owned properties in these prime areas had no need to “cash out” repeatedly in order to travel, buy vehicles and bling and pay their monthly bills, thus they were never “underwater”;
-there is a high incidence of free-and-clear property owners in these areas;
-there is a low incidence of “underwater property owners” in these areas, and, in any case, a lender would likely have foreclosed on a defaulted property in these locations early on before allowing the trustors to squat too long. (After all, they’re not completely stupid) :=0
-and, a “best hands” owner can afford to list just to “test the market.”
A few Piggs seemed “shocked” when what they thought was a “great offer” they submitted was turned down flat without a counter offer :=0
We haven’t heard from some of these Piggs in awhile who were waiting for bargain-basement prices on the coast. It’s very possible that some decided to suspend their search or ended up moving away.
Participant[quote=livinincali]Looks like sequestration would cut about 30,000 jobs in San Diego County. That’s about 2.5% of the total jobs.
http://www.cbs8.com/story/21232555/federal-sequester-to-impact-local-families
I figure it will initially effect rents/vacancy and then eventually cool off the investor demand. I figure home prices will be a bright spot for a while as we enter a recession. Housing will likely follow the recession rather than lead it this time around.[/quote]
I watched the video. A large portion of the DOD jobs and Port Authority jobs in SD which are funded with Federal money are occupied by persons who can retire today with a pension. I’m going to go out on a limb and say these workers will be asked to retire or perhaps be given small incentives to do so before October 1 (when the Federal govm’t’s new fiscal year begins). The affected departments just won’t fill those positions left vacant by the new retirees.
Those new DOD and Port Authority retirees will be a “zero sum game.” They will start collecting their pensions in their SD County homes which they have owned for many years and life will go on.
If any of the ($46B??) in military cutbacks has to do with weaponry and the active-duty members who operate it, the affected servicemembers with 15 years in service will be transferred or offered an “early out” incentive with educational benefits thrown in, and of course, paid relocation to a new duty stn, back home or to the US locale of their choice.
These active-duty members and their families will simply move from Navy-owned housing (or a local rental) to another county or state at the Navy’s expense.
I just don’t see the results of a “Federal sequester” having any effect whatsoever on the housing market in SD.
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