Cost of living adjustment (2014, house, income)

[Old Guard]

I just found out that there is a budget proposal to do away with the cost of living adjustment for federal employees, retirees and SSN?

I really do not know the particulars but will this affect the housing market in Northern VA? Will my house lose a lot of value? How else would it affect us?

[ChristineVA]

I doubt it would affect the housing market.

This was proposed several weeks ago along with a 6% increase to your FERS contribution if you are under FERS. That's the one that's hard to deal with.

[Old Guard]

Originally Posted by ChristineVA

I doubt it would affect the housing market.

This was proposed several weeks ago along with a 6% increase to your FERS contribution if you are under FERS. That's the one that's hard to deal with.

Thank you Christine. I am more concerned with the housing as that is where my investment is. I appreciate it.

[WittyUserName]

I feel like home prices around here have long been disconnected from any federal employee compensation. I'm not sure who is scooping up the $800k homes after 2 days on the market, but it would certainly be a stretch on a GS salary.

[Carlingtonian]

To clarify, I believe the OP is referring to the Adminstration's proposal to (among other things) nix COLA for retiree pay (FERS or CSRS), versus locality pay (or COLA for current employees in the few locations that offer it instead of locality pay, such as Hawaii).

[Old Guard]

Originally Posted by Carlingtonian

To clarify, I believe the OP is referring to the Adminstration's proposal to (among other things) nix COLA for retiree pay (FERS or CSRS), versus locality pay (or COLA for current employees in the few locations that offer it instead of locality pay, such as Hawaii).

YES! This. Thank you for explaining.

[johnsonkk]

Originally Posted by ChristineVA

I doubt it would affect the housing market.

This was proposed several weeks ago along with a 6% increase to your FERS contribution if you are under FERS. That's the one that's hard to deal with.

Even if FERS contributions increase for new federal workers by 1%, the local impact may be minimal.

The continued increase in FERS contributions is one way to stave off millennial workers from the federal workforce The Obama administration approved the current 5% FERS contribution rate for new federal workers starting in 2013. An additionally 1% is not going to dissuade the older workers who already have one pension from moving into this area or into federal government.

The concern across the federal workforce is the continued lack of federal workers under 30; which is still well under 10%. Historically the federal workforce had 25% under 30 but those days are long gone.

[ChristineVA]

Originally Posted by johnsonkk

Even if FERS contributions increase for new federal workers by 1%, the local impact may be minimal.

The continued increase in FERS contributions is one way to stave off millennial workers from the federal workforce The Obama administration approved the current 5% FERS contribution rate for new federal workers starting in 2013. An additionally 1% is not going to dissuade the older workers who already have one pension from moving into this area or into federal government.

The concern across the federal workforce is the continued lack of federal workers under 30; which is still well under 10%. Historically the federal workforce had 25% under 30 but those days are long gone.

Actually, the rate for 2013 was 3.1%. Hires after 2014 will pay in 4.4%.

The 6% proposal would be over time and it is proposed to affect ALL government workers. So, I currently pay in about 1% now (it might be a little less than than that). By year 6, I would be paying in 6%. Honestly, the FERS payout is pretty piddly. I'd like to take that 6% and invest it on my own rather than have that pension. I don't have 20-30 years in the government though so maybe I would feel differently if I did.

I can tell you that a 6% hit on my income at this point would definitely be felt.

I think if I was a milennial applying for the government and facing a 6% FERS contribution along with needing to do TSP; I wouldn't do it. An additional 6% off the income at that young age along with trying to do the 401K/TSP is a LOT of money for someone not making much.

[lchoro]

Originally Posted by Old Guard

I just found out that there is a budget proposal to do away with the cost of living adjustment for federal employees, retirees and SSN?

I really do not know the particulars but will this affect the housing market in Northern VA? Will my house lose a lot of value? How else would it affect us?

It usually means that Congress will bump the average pay by a legislated amount and ignore the cost-of-living adjustment.

[lchoro]

3.2 percent

Bill Would Give Federal Employees a 3.2 Percent Pay Raise in 2018 - Pay & Benefits - GovExec.com