It’s a Dog’s Life After You Retire

A few years back, a friend retired from federal service after a long, successful career. He made the usual noises that he wanted to travel, pursue other interests, spend more time with the family, etc. But what he really wanted to know, he confided, was what his dog did all day long!

Turns out, he said, not much.

So what does your dog do while you are at work? Short answer: Not much! Dogs sleep. A lot.

Now that former fed (whose name rhymes with John Elliott) conducts pre-retirement seminars. He says feds who plan for retirement are often very pleasantly suprised with the real thing.

But there are some things that many feds don’t realize until they become ex-feds. One of the hidden icebergs in retirement is called Premium Conversion.

What happens is this: After they transition from worker bee to retiree, their income often drops. Yet, at the same time, they lose a tax break (Premium Conversion) that many of them didn’t even know they had. Until they lose it.

Premium Conversion is the ability to pay your share of health premiums in pre-tax dollars. That reduces your taxable income. Depending on your tax bracket and your plan’s premiums, the PC perk can save you $250 to $850 per year in federal taxes. That can be a substantial amount to a retiree.

Depending on the plan you select and your tax bracket, Premium Conversion can save you anywhere from $250 to $800 per year in federal taxes.

President Clinton extended the PC option to federal and postal workers. But he couldn’t give it to retirees because of the tax implications, and because Congress sets tax law.

Groups anxious to extend PC to retirees have been working to force a vote on the issue.

Many members of the House and Senate have said they will vote to extend PC to retirees if it comes up for a vote. But each year, under Republican and Democratic control, the PC vote has been blocked by the Senate Finance Committee and the House Ways and Means Committee.

Committee leaders worry about the tremendous loss of tax revenue that would take place if retirees could pay health premiums in pre-tax dollars.

The National Active and Retired Federal Employees has, for obvious reasons, been leading the charge to round up cosponsors to the PC expansion bill.

To see where it’s at, click here and then go to legislative hotline.

Federal Employees Almanac

Why do federal benefits specialists seem to know everything?

Well, in many cases, they simply look it up at a one-stop resource instead of combing through federal regulations files.

The oldest of the sources is the Federal Employees Almanac which has data on federal and postal benefits, regulations and the always popular pay tables. To order or check it out click here.

Gas Pains

Feds who use PV (personal vehicles) on official business should be reimbursed 50.5 cents per mile. That’s what the IRS allows for taxpayers who deduct their business mileage.

The National Federation of Federal Employees says the General Services Administration (which controls per diem and mileage reimbursement rates) should get with the 50.5 cents per mile program. Currently feds who drive for Uncle Sam get 48.5 cents per mile.

Tax Rebates

Yesterday’s column dealt with the confusing and controversial tax rebate proposal. I almost got it right, but not quite, according to this tip from Mike A. of the IRS.

He says: “Dude! Leave the tax advice to the professionals! Adjusted Gross Income (AGI) is not, “generally the amount on which you pay taxes”. In fact, you never pay taxes on AGI. You pay taxes on taxable income, not AGI. AGI is always reduced by the amount of your total exemptions and the greater of your standard deduction or itemized deductions, which gives you taxable income. This frequently makes a big difference. Keep up the good work (but stick to journalism)!”

Done and done!

Nearly Useless Factoid

The most popular name for a pooch in North America is Sam, Sammie or Samantha, followed by Max, Maxie etc.; then Lady, Bear, Maggie, Buddy, Tasha, Chelsea and so on. Other popular dog names are Holly, Shasta, Brandy, Ginger and Taffy.

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