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Any Retired Federal CSRS or FERS employees on CL?

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Any Retired Federal CSRS or FERS employees on CL?

 
Old 12-15-18, 07:54 AM
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mmarshall
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Default Any Retired Federal CSRS or FERS employees on CL?

For you retired Federal civilian employees, for 2019, OPM has announced a 2.8% annuity-increase for those of you under the older CSRS plan, and a 2.0% increase for the newer FERS plan. Those of you starting service after 1984 (or having willingly converted from the old CSRS plan) will automatically be under the new plan. Older people, like me, who did not convert, will be CSRS. OPM did not give a formal reason for the 0.8% difference between the two, but it would (presumably)? be because the CSRS plan, with a higher annuity, does not include Social Security and the newer FERS plan does. Under CSRS, unless you already have a minimum of 40 quarters of SS-covered service, you will not get any SS monthly payments, because you never paid into the SS system, and the only thing you will get from SS is Medicare Part A....if you sign up for it. FERS will get SS payments each month, but the trade-off is a lower OPM pension and having to work a few more years for minimum benefits. FERS also does not give you as much credit for things like unused annual/sick leave as CSRS does.

Of course, with either plan, for the first time, we will be dealing with new tax laws this coming April....so how much of this actually stays in (or leaves) one's pocket will be anyone's guess. The loss of the $4000+ Personal Exemption that everyone, under the previous law, was entitled to is gone.....that may hurt a lot of people, including me. Also working against some folks (primarily with valuable homes and property) will be the new $10,000 imitation on state/local income and real estate/property taxes that can be deducted on Schedule A. But there will also be some major changes in a positive direction, too, such as a huge increase in the Standard Deduction, which would essentially double if the $4000 Personal Exemption were not being taken away. (there was some double-talk in Congress about that, with the proponents of that big increase in the Standard Deduction failing to point out that the loss of the Personal Exemption would take away a significant portion of that gain). There will also be changes in the Child Care and Dependent Credits and EIC (Earned-Income Credit), not to mention (possible) changes in the general tax (rate) tables and rates. And, of course, corporations and businesses will be paying lower rates...but that is another whole subject. So, for most people (including Fed retirees).....it's probably not going to be easy to predict just what the new net-result for us will be this April. We'll just have to wait a few more months, deal with all the new laws, and see how it affects the tax-owed or tax-refund status for each one of us. In my case (though, at this moment, it's still just a guess), I will probably continue to get a refund...but a somewhat smaller one.

Last edited by mmarshall; 12-15-18 at 08:02 AM.
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