CANFORGEN on Pay and PIL

[dapaterson]

EITS:  You aren't losing severance - you're just not accumulating any more.  As the CANFORGEN says, you'll be able to choose to take it now, take it when you retire, or take some now and some when you retire.

(And if you're medically released or, sometime in the future, retired because of some future FRP, you'll still get severance (less what you've already taken, of course).

And they're also cashing it out for you at the maximum rate (7 days per year).

 

[Eye In The Sky]

Roger that.  Poorly worded in my post.

 

[Remius]

In regards to the severance, a lot of people screwed themselves in the PS.  Seeing the fast cash.  I know a lot of people who just took it right away without looking at what they were losing in the long run had they rolled into an RRSP or waited until they retired to cash out at a higher rate.

 

[fraserdw]

In regards to the severance, a lot of people screwed themselves in the PS.  Seeing the fast cash.  I know a lot of people who just took it right away without looking at what they were losing in the long run had they rolled into an RRSP or waited until they retired to cash out at a higher rate.

Most in the PS who vote are already at max severance.  They screwed the guys coming behind them, as is the Baby Boomer way!  ANd now me! :crybaby:

 

[ttlbmg]

Small question: has anyone heard anything else in regards to LDA? Just wondering, although it probably wouldn't show up in the CANFORGEN for pay increases. Just wondering if someone knew.

 

[SupersonicMax]

Thank you. I understand the theory of heartache; my experience is actually a bit more than RMC and a first engagement in Cold Lake.

Thanks for discrediting my experience.  For absolutely no reason.  FWIW, I'm not in Cold Lake.

The reality is, the CF isn't hurting near as much as some other elements of society. The fact that some hypothetical Cpl has decided to have a houseful of kids that he apparently can't support is simple whininess.

I understand, and strongly condone, the principle of personal responsibility.  All I am saying is that it will have an effect on some people, not necessarily because of bad planning, but net pay decrease.  People that could afford the life they wanted last year, may not be able to afford it next year.

EITS:

I meant a net pay cut.  Paying more into your pension plan will decrease your net pay for no added benefits. I'm sure you know this, but every year that your yearly relative salary increase is less than the inflation rate, you are essentially taking a pay cut.

 

[blacktriangle]

Uh oh, did someone say Net pay cut? Percentage please?

(No I am not a whiner with lots of kids...I just want to see how much less I will spend on coffee and fast food, thanks!)

 

[Halifax Tar]

Not to be an echo, but it is called "Paying Attention to Detail".



In military writing, it is proper to always write out the long form of something first, followed by the abbreviation in brackets; as in the example above.

Thank you George.

 

[SupersonicMax]

Uh oh, did someone say Net pay cut? Percentage please?

(No I am not a whiner with lots of kids...I just want to see how much less I will spend on coffee and fast food, thanks!)

Again, this will be for someone that maxed out his incentive.  Taking a Cpl 4, No Spec Pay, in 2011, in Ontario, he would have made 2856$ a month net.  Now, add the increases from 2011 and 2012 and factor in the assumed pension payment increase, a Cpl 4 No Spec Pay, in 2012, would make (assuming 2011 tax rates): 2708$ a month net.  That's a 5.2% decrease in net pay, NOT considering inflation and likely increase in income tax for 2012.

 

[FSTO]

Small question: has anyone heard anything else in regards to LDA? Just wondering, although it probably wouldn't show up in the CANFORGEN for pay increases. Just wondering if someone knew.

I took a boo at the CANFORGEN this am and I think that all the environmental allowances (Sea Pay etc) are seeing an increase.

 

[TangoTwoBravo]

In regards to the severance, a lot of people screwed themselves in the PS.  Seeing the fast cash.  I know a lot of people who just took it right away without looking at what they were losing in the long run had they rolled into an RRSP or waited until they retired to cash out at a higher rate.

ATV/boat  today or a little more money in twenty years to spend on Association dues and hearing aids...Can't decide...

 

[Eye In The Sky]

Small question: has anyone heard anything else in regards to LDA? Just wondering, although it probably wouldn't show up in the CANFORGEN for pay increases. Just wondering if someone knew.

Actually if you read the CANFORGEN its there.  1.5% increase for '11, '12 and '13.

 

[Infanteer]

I'll worry about finances at 60 after I hit 45.  For now, its's going to pay down some debt!

 

[dogger1936]

I'll worry about finances at 60 after I hit 45.  For now, its's going to pay down some debt!

This will be the first lump sum I haven't already spent in my head long before it came!

Maybe some fancy hardwood flooring...

 

[agc]

I'll worry about finances at 60 after I hit 45.  For now, its's going to pay down some debt!

I think everyone would be wise to think about this.  The severance pay is a really bad savings account.

 

[Remius]

That's the thing.  A girl I work with got 9000$ in severance from the PS at the current level she is at.  She was giddy she was getting 9gs and was blind to the fact that the union screwed her over.  9 years instead of the max se could have gotten.  To make matters worse, she could have gotten more money at retirement based on the fact that she would retire at a higher level.  People are going to spend this money or piss it away.  The smart ones will lock it away or wait.

 

[The_Dictat]

I was thinking about it... I am a Sgt with 15 years of service reservist with 11 years of full time service currently on a Cl BA. I elected to buy all my pensionable time in 2007... so I have a decent pension fund thus far...I also have an RRSP running (have to think of a plan B pension fund if I can't complete 25 years of full time pensionable service ).

I would take my 16000ish$ right away... Severance pay is taxable income. I would transfer all of it into my RRSP (I have the room) and get about 6500$ in tax return.  I would then put 5000$ in my TFSA and use the rest to buy a great gift from me to me.

OR I could wait until I retire lets say as a MWO at 25 years: that would be above 19000$ but It would still be below an estimated 3% revenue in an RRSP after 10 years...

Therefore I will most certainly choose to take it right away and invest into my RRSP

Remember : IT IS TAXABLE INCOME.

Dictat

 

[Harris]

Someone please correct me if I'm wrong, but as long as you transfer your gratuity into an RRSP right away (assuming you have the room) you do not pay any taxes.  On the flip side you also do not get to claim it on taxes as you never paid any on it.

 

[Pat in Halifax]

BTW-Still not on my BB...

 

[Occam]

Someone please correct me if I'm wrong, but as long as you transfer your gratuity into an RRSP right away (assuming you have the room) you do not pay any interest taxes on the amount deposited.  On the flip side you also do not get to claim it on taxes as you never paid any on it.

Made a slight correction for you.  And yes, dumping that large amount into a RRSP would not result in a refund.  It just means you wouldn't have a huge tax liability on it.