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Old 10-17-2008, 06:03 AM   #21
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And TRICARE for Life cost is also not changing for 2009! Hope my local Doctor does not ask for $350 annual to be a patient.
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Old 10-17-2008, 06:05 AM   #22
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Wonder if they will budge off that 0.00% fixed rate in November..If they would do 1% or so the new I-Bonds might look good unless you think we have entered a delation zone.
It would be expensive for the government to increase the fixed rate. I-Bonds can be sold without a fee if they've been held for 5 years, and after only one year if you are willing to give up 3 months of interest. So, there's a huge chunk of pent-up I-Bond money that investors will quickly re-invest at the higher rate if the fixed rate goes up. I think this is a big problem with the I-bond construct, effectively a ratcheting mechanism that results in the fixed component only going down, because going up costs the government a lot of $$. In my opinion, that's how we got to the present zero% fixed component, and we'll stay near this point for a long time.
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Old 10-17-2008, 09:14 AM   #23
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The Medicare premium is not increasing for 2009.
At my w*rk, the 2009 HDHP/HSA option is going *down* 5%, and they are increasing the HSA employer contribution by $500 or more. The more traditional PPO plan's cost is rising 11%.
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Old 10-17-2008, 09:32 AM   #24
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Ziggy, as most of those concerned with the SS Cola, or at or near Medicare, it would appear the Medicare Part B increase, or in this case lack of, would be more important.

To an early retiree, with a COLA pension and no medical, I not sure who that might be, then rising health care may offset the COLA.
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Old 10-17-2008, 09:37 AM   #25
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Ziggy, as most of those concerned with the SS Cola, or at or near Medicare, it would appear the Medicare Part B increase, or in this case lack of, would be more important.
I'm just providing a general point about where other medical plans are going in price next year for comparative purposes.
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Old 10-17-2008, 10:01 AM   #26
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And the return on I-bonds and TIPS can never be negative, either.
In the case of TIPS, the inflation premium, which is added to par, can be reduced (but not below 100) if there is deflation. Theoretically, this could result in a negative return during a period in which deflation exceeded the coupon.
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Old 10-17-2008, 11:17 AM   #27
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That is a blessing since husband and I pay Medicare A, and B plus Fed Blue Cross family coverage. When DH commented on the increase in SS and my small CSRS I told him not to plan on any gain.
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Old 10-17-2008, 08:09 PM   #28
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Not work and get 5.8% or work and (in my case) get 2%. Hmmm....
I am not sure how this is fair at all. I don't know of anyone working who will get a 5.8% increase. Flame away...
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Old 10-18-2008, 06:30 AM   #29
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How is it not fair midpack - it is, in effect, a contractual obligation. Take, for example, a military retiree. He or she made a commitment to serve the US 20+ years at pay rates far below private sector and with tough working conditions. One of the compensations he was promised in return was a lifetime pension with COLA. Should the government renege on that promise now? If so, how about they renege on paying back the principle on your treasury bonds?
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Old 10-18-2008, 07:30 AM   #30
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As a military retiree, I agree one hundred percent with Heff.

Yeah, and I bought about $25,000 in I Bonds back in the early 2000s when the fixed rate portion of the bond was high. I stopped buying I Bond in about 2004 as the fixed rate portion dropped.

I am curious though, can someone explain why an I-bond with a fixed rate of 1% might still be attractive, but that (as I have seen elsewhere on this board) that a TIPS with a real rate of return of two percent or less is not so attractive? Is it only because of the tax deferral aspect of the I Bond?

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Old 10-18-2008, 07:38 AM   #31
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How is it not fair midpack - it is, in effect, a contractual obligation. Take, for example, a military retiree. He or she made a commitment to serve the US 20+ years at pay rates far below private sector and with tough working conditions. One of the compensations he was promised in return was a lifetime pension with COLA.
I am not saying this is easy. But if SS remains as is, the demographics (ratio of workers to retirees) are working against us to begin with, ie, active workers will most likely have to pay more into SS to support retirees in the decades ahead. This is only one year, but if the real wages of active workers have not kept up with COL and aren't expected to in the decades ahead - doesn't that make it even more onerous for active workers to support retirees going forward? My 86 year old father, also a military retiree, now admits/realizes that he probably lived during the golden age of pensions/retirement. If anything, his standard of living has improved during the 26 years he (and Mom) have been retired...

And how many of us were promised lifetime pensions and health care in the Corp world, who have now lost them years into our careers? I am one of millions who fall in that camp. 14 years ago, at 17 years into my career, it was all taken away. My pension was frozen (no more company contributions) which means the cash value at 65 will be about equal to a car payment - and health care was summarily taken away. And I can't access it early to invest myself.

I am only suggesting we're going to have to share the burden across all. Is it fair for one generation to take a 'you owe me no matter what happens' POV while other generations can't?

Again, this is not easy...
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Old 10-18-2008, 08:21 AM   #32
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MidPack - The government and the military are very different animals than the private business sector (& why I favor mixing them as little as possible).

I noticed in quoting donheff you failed to include his last two sentences:.

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Should the government renege on that promise now? If so, how about they renege on paying back the principle on your treasury bonds?
Care to address the last question?
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Old 10-18-2008, 08:30 AM   #33
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MidPack - The government and the military are very different animals than the private business sector (& why I favor mixing them as little as possible).

I noticed in quoting donheff you failed to include his last two sentences:.



Care to address the last question?
That's a very convenient POV, but no reason. Why should federal employees be immune to what everyone else has been subjected to for decades economically? I am not advocating they suffer more, only that we all share the burden.

I have never owned treasury bonds and it's not something I know a lot about, that's why I didn't answer.
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Old 10-18-2008, 08:32 AM   #34
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And while we are contemplating breaking implicit government contracts with the people since: "we're going to have to share the burden across all. Is it fair for one generation to take a 'you owe me no matter what happens' POV while other generations can't?"

Let's start taxing IRA's & 401k's (retroactively even) & change banking regulations so that if a bank is in trouble they can just change the terms of CD's to suit them. Let's allow lenders to increase the interest rate on loans as necessary.
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Old 10-18-2008, 08:40 AM   #35
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And while we are contemplating breaking implicit government contracts with the people since: "we're going to have to share the burden across all. Is it fair for one generation to take a 'you owe me no matter what happens' POV while other generations can't?"

Let's start taxing IRA's & 401k's (retroactively even) & change banking regulations so that if a bank is in trouble they can just change the terms of CD's to suit them.
Before we move on to IRA's, 401k's and CD's, please tell me why federal employees should me immune from what I posted:
Quote:
And how many of us were promised lifetime pensions and health care in the Corp world, who have now lost them years into our careers? I am one of millions who fall in that camp. 14 years ago, at 17 years into my career, it was all taken away. My pension was frozen (no more company contributions) which means the cash value at 65 will be about equal to a car payment - and health care was summarily taken away. And I can't access it early to invest myself.
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Old 10-18-2008, 08:50 AM   #36
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Employees vs Retirees

Do you make a difference? An employees wages may be cut. His cola may not be the same as inflation.

I worked for a county. We got a 3% cola every two years sometimes 3. No way that kept up with inflation. I had a choice. Retirees on the other hand are dealing with a promise to pay.

The fact that a Studebaker may no longer keep it promises is bad. If the U.S. Government does not keep it's, would be catastrophic.

As is, the government has played with the 'Inflation Index' to the point that the COLA does not accurately reflect inflation and retirees have been taking it in the shorts for years. Where is your anger?
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Old 10-18-2008, 08:51 AM   #37
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My point is that the US Government needs to be viewed as stable & trustworthy and a fair enforcer and arbitror of contracts (for many reasons) - and therefore cannot go around changing the terms of it's own contracts (or perceived contracts) willy-nilly in mid-stream. This would not be good for the country or the world.

Now I am not opposed at all to consideration of reducing federal spending on new commitments made by both the government & the military. Reducing the federal workforce. Reducing the size of the military (hey, how 'bout that non-interventionist foreign policy some candidate suggested! That'd save a lot of federal bucks) Changing the terms of employment for new hires, etc, etc Reagan already did that once in the 80's when he created the new "improved" federal retirement system called FERS. One example of the "improvement" is that COLA for fed gov. retirees under FERS is CPI minus 1% now. The reduced Pension folks get under FERS (1% per year of employment) only accounts for 1/3 of the retirement benefit for FERS retirees nowadays - the other two thirds is TSP (essentially a 401k invested in either T-Bills or the private sector) and , gasp, Social Security. I personally know folks close to retirement who have taken it in the shorts lately in the value of their TSP (some to the tune of X00-K) - just like folks in the private sector with their 401k's, imagine that!

Were I not eligible for the special law enforcement retirement provisions (that Congressmen & Senators get) I would have quit the feds a long, long time ago. I don't think the current federal retirement provisions are worth it (no offense to regular FERS folks - that's just me)
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Old 10-18-2008, 08:56 AM   #38
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My point is that the US Government needs to be viewed as stable & trustworthy and a fair enforcer and arbitror of contracts (for many reasons) - and therefore cannot go around changing the terms of it's own contracts (or perceived contracts) willy-nilly in mid-stream. This would not be good for the country or the world.
With all due respect (really), I still don't see where you're answering the "immunity" question. Is it OK for active and retired MegaCorp employees to have the same promises taken away? It's been going on for decades...
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Old 10-18-2008, 09:02 AM   #39
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As is, the government has played with the 'Inflation Index' to the point that the COLA does not accurately reflect inflation and retirees have been taking it in the shorts for years. Where is your anger?
I'll get flamed as I've seen posts on this before, but it's not been obvious to me that CPI-U is not accurate. And I've never seen anyone show data to prove it. Most attempts I've read seem to skirt the change in quality, substitution, new variables.
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Old 10-18-2008, 09:04 AM   #40
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I never said it was "OK" for MegaCorp employees to have their promises taken away. Are you suggesting that it's "OK".

But because that has happened to some that makes it "OK" to do so to federal & military retirees in your book?

I heard of a guy in Afghanistan who killed his sister over a matter of "honor" - so it's "OK" for me to kill my sister then?
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