|
|
Stability of Federal Pension/SS
02-17-2009, 08:52 AM
|
#1
|
Thinks s/he gets paid by the post
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,204
|
Stability of Federal Pension/SS
I have two federal gov pensions. Mil and SS. For me those two pensions represent just about all of ours, and I suspect others benefit from SS.
So, what type of financial disaster would have to take place to put this type of retirement situation in jeopardy. Now I know you could say the gov could cancel these pensions, but the probability of this is extremely low, so if you choose to discuss this how about some idea of how likely you thing your scenario is likely.
Hyper inflation with the governments once a year catch up may be one. However, I think if this were to happen gov might step in with some sort of leveling device. However, I think it would still be after the fact and some standard of living would be lost.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
02-17-2009, 09:16 AM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
|
I think the changes will come around the edges, they won't be favorable for retirees, and they will have more important long-term impacts than short-term ones. Understating the inflation amount by 1-2% per year will make a huge difference in quality of life for many government retirees.
Military retirement: Look for ideas to base the COLA on something that doesn't track real inflation. Also, looked fr a "stepped" inflation adjustment: full COLA for the first XX dollars per month, modified COLA above that.
SS: Means testing. Especially when the government controls more than one check you receive every month, there will be a desire to total the amount and decide if it is fair. Also, perhaps means-testing based not on income, but on wealth. We saw a glimpse of this with the Clinton administration's exploration of the "imputed rent" concept.
This is a gut feeling only, not based on any hard info. I think as time goes on, there will be a growing political constituency for elected leaders who blur the distinction between "earned benefits that are part of a contract" and "government payments to the less fortunate that are part of our unwritten but vital social contract". I hope I'm wrong.
|
|
|
02-17-2009, 09:20 AM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
|
Quote:
Originally Posted by Rustic23
I have two federal gov pensions. Mil and SS. For me those two pensions represent just about all of ours, and I suspect others benefit from SS.
So, what type of financial disaster would have to take place to put this type of retirement situation in jeopardy. Now I know you could say the gov could cancel these pensions, but the probability of this is extremely low, so if you choose to discuss this how about some idea of how likely you thing your scenario is likely.
Hyper inflation with the governments once a year catch up may be one. However, I think if this were to happen gov might step in with some sort of leveling device. However, I think it would still be after the fact and some standard of living would be lost.
|
For those already in the system, I suspect the threat might be a termination of COLA's and greater taxation of benefits.
Obama froze a few salaries, congress held off on their raise, so gosh, can't the rest of you give up something too?? You know, for the greater good.
The greater threat is to those approaching retirement. You can let your imagination run wild here..Almost anything is fair game I would think..
|
|
|
02-17-2009, 09:22 AM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by samclem
This is a gut feeling only, not based on any hard info. I think as time goes on, there will be a growing political constituency for elected leaders who blur the distinction between "earned benefits that are part of a contract" and "government payments to the less fortunate that are part of our unwritten but vital social contract". I hope I'm wrong.
|
I believe earned benefits are (and should be) part of a contract for all who are already implicit signatories to the "contract." But given potential huge taxpayer liability for shoring up struggling pension funds -- especially given how many taxpayers won't have their own retirements propped up by it -- I think in some cases the contract needs to be changed for those who enter into them in the future. That might also help us honor the existing "contracts" more easily, too.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
02-17-2009, 09:27 AM
|
#5
|
Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
|
I believe several things are going to (or could) happen:
1: COLA Light - something like COLA -1% for starters.
2: SS will be pushed to age 65 (slowly like over 5 years) for Early Benefits.
3: SS full will go to 68-70, again slowly like over 5 years or so.
4: Except for the COLA Light I doubt any other changes for Military.
5: Some other adjustments, as already, mentioned may also occur.
I was not aware that Congress had held off on any pay raise for themselves in history. I also doubt anyone currently retired will be immune - too much of the "we all have to help or share" comments going around.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
|
|
|
02-17-2009, 10:01 AM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
|
Quote:
Originally Posted by OAG
I was not aware that Congress had held off on any pay raise for themselves in history.
|
Congress to skip pay raise next year
By Matt Canham
The Salt Lake Tribune
Posted: 02/10/2009 06:31:00 PM MST
Washington » Members of Congress won't receive their annual pay raises next year, House Speaker Nancy Pelosi said Tuesday "because of the condition of our economy and the financial crisis our country is in."
The move would most likely cost each member of Congress more than $4,000 in a cost of living adjustment, known as a COLA.
Congress to skip pay raise next year - Salt Lake Tribune
|
|
|
02-17-2009, 10:12 AM
|
#7
|
Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
|
Federal pensions are an issue and double dippers may find themselves at risk. My FIL gets a military pension, private pension and SS. He gets enough to cover his memory care unit costs at a nicer than usual facility.
The real fiscal issue with pensions is so much larger with state and municipal pensions. There have been all sorts of tricks devised to up the base pay used to calculate the pension and most come with full COLA and medical benefits. When states and cities start going broke there's going to be a great reckoning.
Texas "protects" municipal pensions in their constitution. If a major city like Houston or Dallas folds, that protection won't mean much.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
|
|
|
02-17-2009, 10:14 AM
|
#8
|
Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
|
Wonder what they did to the "expense allocation" for each member for 2009? But, I stand corrected on the annual pay raise to "base" pay. What about the Senate, the rest of the "congress"?
__________________
Vietnam Veteran, CW4 USA, Retired 1979
|
|
|
02-17-2009, 12:05 PM
|
#9
|
Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 1,645
|
I've been worring about this lately. I'm 42 and won't start collecting my small reserve component pension until age 60. That's a long time to wait and I am afraid of changes.
Same goes for my FERS pension. I'm still 14 years away from minimum retirement age and a lot can change in that time. FERS does diet COLAs already if you early retire.
I'm afraid that the rules of the game will be changed sometime between now and when I start collecting. That could be very damaging to my retirement plans...
|
|
|
02-17-2009, 12:54 PM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Feb 2008
Posts: 1,281
|
Quote:
Originally Posted by Bimmerbill
Same goes for my FERS pension. I'm still 14 years away from minimum retirement age and a lot can change in that time. FERS does diet COLAs already if you early retire.
I'm afraid that the rules of the game will be changed sometime between now and when I start collecting. That could be very damaging to my retirement plans...
|
One "rule of the game" that may change is a hi-5 annuity calculation instead of hi-3.
Sick Leave above XXX hours may become use or lose on an annual basis instead of unlimited accrual.
Perhaps also no more Annual Leave payouts at retirement.
etc
__________________
Retired 2009!
|
|
|
02-17-2009, 02:40 PM
|
#11
|
Recycles dryer sheets
Join Date: Mar 2008
Posts: 410
|
History shows that changes in SS or military retirement, have never been fully implemented on a generation expecting certain benefits. There has always been grandfathering, with incremental changes, spread over several generations.
The most draconian of the republican private SS plans, still grandfathered everyone over 55.
With all this TARP, bail-outs, stimulus, etc. It would take some pretty big balls to shut off all SS and federal pensions.
|
|
|
02-17-2009, 03:13 PM
|
#12
|
Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
|
Maybe all those things will change this time. BTW the SS changes did not take a generation to be implemented (65 to 67 in what 10 years?). 50% to 85% taxation of SS Benefits "happened" in 1994 and it was immediate. I expect any new changes will be gradual but who knows?
__________________
Vietnam Veteran, CW4 USA, Retired 1979
|
|
|
02-17-2009, 03:25 PM
|
#13
|
Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
|
Quote:
Originally Posted by samclem
I think the changes will come around the edges, they won't be favorable for retirees, and they will have more important long-term impacts than short-term ones. Understating the inflation amount by 1-2% per year will make a huge difference in quality of life for many government retirees.
Military retirement: Look for ideas to base the COLA on something that doesn't track real inflation. Also, looked fr a "stepped" inflation adjustment: full COLA for the first XX dollars per month, modified COLA above that.
SS: Means testing. Especially when the government controls more than one check you receive every month, there will be a desire to total the amount and decide if it is fair. Also, perhaps means-testing based not on income, but on wealth. We saw a glimpse of this with the Clinton administration's exploration of the "imputed rent" concept.
This is a gut feeling only, not based on any hard info. I think as time goes on, there will be a growing political constituency for elected leaders who blur the distinction between "earned benefits that are part of a contract" and "government payments to the less fortunate that are part of our unwritten but vital social contract". I hope I'm wrong.
|
I could see this along with say you are worth maybe 3M or more maybe no SS. If the new rich is making 250k a year. What is the average net worth of someone that makes that much might be the cut off for recieving SS.
|
|
|
02-17-2009, 03:31 PM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by rec7
I could see this along with say you are worth maybe 3M or more maybe no SS.
|
Fine. I'm not nearly as worried about that now as I was a couple years ago. At this point I'd be perfectly fine with that if I miraculously recovered to get to 3M... or even 2M...
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
02-17-2009, 03:33 PM
|
#15
|
Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
|
I hear you ziggy I am just a poor boy too, but just putting some ideas on the table.
|
|
|
02-17-2009, 05:00 PM
|
#16
|
Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
|
Quote:
Originally Posted by ziggy29
Fine. I'm not nearly as worried about that now as I was a couple years ago. At this point I'd be perfectly fine with that if I miraculously recovered to get to 3M... or even 2M...
|
What's an "M?" I seem to remember them but can't quite put my finger on it.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
|
|
|
02-17-2009, 05:09 PM
|
#17
|
Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
|
Short for million .
|
|
|
02-17-2009, 05:50 PM
|
#18
|
Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 1,645
|
High-5 computations and NSPS could be a killer... I expect my earnings to be eroded by NSPS in the 14-18 years I have left to work.
|
|
|
02-17-2009, 09:17 PM
|
#19
|
Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
|
Quote:
Originally Posted by Rustic23
I have two federal gov pensions. Mil and SS. For me those two pensions represent just about all of ours, and I suspect others benefit from SS.
So, what type of financial disaster would have to take place to put this type of retirement situation in jeopardy. Now I know you could say the gov could cancel these pensions, but the probability of this is extremely low, so if you choose to discuss this how about some idea of how likely you thing your scenario is likely.
Hyper inflation with the governments once a year catch up may be one. However, I think if this were to happen gov might step in with some sort of leveling device. However, I think it would still be after the fact and some standard of living would be lost.
|
I would say worst case (I do not expect this to happen but you asked) would be a total collapse of the current government and a military type coup. In that case certain groups would be targeted and would be the sacrificial lambs for the good of the country. The key here is not to be one of those groups. Unfortunately, the targeted groups usually are the ones that have assets that would benefit the new government.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
|
|
|
02-18-2009, 12:41 AM
|
#20
|
Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 1,012
|
Quote:
Originally Posted by JPatrick
Congress to skip pay raise next year
Washington » Members of Congress won't receive their annual pay raises next year, House Speaker Nancy Pelosi said Tuesday "because of the condition of our economy and the financial crisis our country is in."
The move would most likely cost each member of Congress more than $4,000 in a cost of living adjustment, known as a COLA.
Congress to skip pay raise next year - Salt Lake Tribune
|
since the cpi (which is what the cola is often is based, that or less) has fallen since the beginning of the fiscal they arent really giving up anything.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|