Can’t get a buyout? Build your own

Although buyouts are out there, the odds that you personally will get a $25,000-to-$40,000 payment to leave are slim to none. You can wait, and hope and maybe, just maybe, get lucky. But the deck is stacked against you.

But it is possible for many long-service, retirement-eligible feds to create their own buyout: A big chunk of change, in the tens of thousands of dollars, if they are careful with their vacation (annual leave time) and if they retire on the best date. Usually in late December or the first three days in January, depending on whether they are FERS, CSRS or under the CSRS Offset retirement program. They can do it by retiring in the December-January sweet spot, when they can carry over the maximum amount of unused annual leave, be paid for most, if not all of it, and be eligible for the 1.9 percent pay raise that goes into effect in January. And another plus — that bloc of higher-pay annual leave may be taxed at a lower rate because your income is likely to drop in 2018.

However, it works out, if the timing is right for you — and you have or can accumulate the maximum amount of annual leave — it is food for thought.

Folks who cover the federal beat say that the two most-asked job-related questions are:

1. When eligible, should I take Medicare Part B?
2. What is the best date (or dates) to retire?

The answer is, like most simple questions, it depends.

Fortunately, we’ve got the person who knows the answers. Our guest today on our 10 a.m. EDT Your Turn radio show is Tammy Flanagan. She’s a long-time, been-there-done-that federal benefits expert and columnist for Government Executive. When Tammy speaks, everybody listens. Or should.

On today’s show, she’s going to be talking about a number of important things.

• What are the benefit threats facing federal workers and retirees? What will they “save” the government, meaning what will they cost you both on the job and after you retire?
• How likely is it that Congress will charge FERS workers more money — anywhere from 4.4 percent to 6 percent more — for their share of the retirement plan costs?
• What happens to you, active or retired, if Congress reduces future cost-of-living adjustments for CSRS retirees and eliminates them completely for people under FERS? Can you imagine the financial impact of going 20 or 30 years in retirement without any protection from inflation?
• How do I maximize the amount of annual leave I can carry over, and get paid for, at a higher rate by picking the best date to retire? And get a tax break at the same time?

This one is a must-listen. Even if you are years away from retirement, the information, with some rare exceptions, is the same for 2017, 2018 and in years to follow. Once you understand how it works, and how you can set the timer to make it work, it should give you some satisfaction. And a chunk of money right after you retire, buyout or no buyout.

You can listen today on 1500 AM in the Washington metro area or stream on the internet at FederalNewsRadio.com. Because all of the Your Turn shows are archived, you can click on and listen to any of them anytime. This is a particularly good one to tell friends and coworkers about. There’s a good chance your boss will be listening, too.

Don’t miss an episode by subscribing to Your Turn on iTunes or on PodcastOne.

Nearly Useless Factoid

By Michael O’Connell

The word “galoshes” comes through French (galoche)  and Latin, with its origin in the Greek word meaning “shoemaker’s last.”

Source: Wikipedia

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