Observations on life

Oh crap, we don’t have savings‼️

“Both my kids’ birthdays are com­ing up and it is re­ally stress­ful,” she said. “You want to make their birth­days spe­cial but you’re not sure if you should spend the money be­cause we don’t know when my hus­band will be back to work.”

NOT SURE? You explain the situation and tell the children their presents are delayed, but you will celebrate and do something fun that doesn’t cost extra, bake a cake. If you don’t have an emergency fund, you shouldn’t be spending the money even without the shutdown.

Mr. Nye, who has worked for the FAA for 15 years main­tain­ing air-traf­fic-con­trol sys­tems, said he had never be­fore con­sid­ered ap­ply­ing for un­em­ploy­ment ben­e­fits, nor go­ing into debt to pay for ne­ces­si­ties. “It’s an eye opener to be like, ‘Oh crap, we don’t have our sav­ings in the place that we should.’ That’s been a re­al­ity check for sure,” his wife, Jes­sica Nye, said as the fam­i­ly’s four chil­dren and dog Gin­ger wres­tled in the liv­ing room. Source: Wall Street Journal 1-24-19

Right, oh, crap.

A recent online column from Time relates “horror stories” about health care and furloughed government workers. One had selected a $10,000 deductible option and couldn’t pay for health care up to the deductible, a condition likely unrelated to temporarily not being paid.

Another was delaying lung cancer surgery because she the did not have the $1,500 up front money the surgeon wanted. The same person was delaying weekly blood transfusions because she didn’t have the $40 co-pay. Both of these people were in two income families.

Clearly such stories are intended to shock and stir emotion. Clearly they could be resolved with minimal effort. Clearly the health care providers are aware of the situation.

For many years I dealt with workers and their health benefits, I helped them negotiate with their providers, I got fees lowered, I arranged payment schedules when necessary, etc. I also learned many times that the stories and problems related by employees were incomplete, misleading or simply not true.

In the case of that $1,500 maybe it’s time to find a new doctor if that is more important to the surgeon than your life.

Same for the $40 copays. Despite the signs in the office, I have yet to have any doctor refuse treatment unless the co-pays was paid before a claim was processed.

It’s a crummy situation, no doubt stressful, but you have not lost your job, you know the money is coming. Time to exercise some common sense …. and start working on that emergency fund for the next time.

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Categories: Observations on life

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2 replies »

  1. So, I was going to pile on – noting that most federal employees are eligible for and participating in the Thrift Savings Plan – a 401(k) style, individual account, retirement savings plan with up to a 5% match funded by taxpayers. The TSP has hardship withdrawal provisions. The TSP also has a loan program. That is, they should have access to liquidity.

    My real focus was going to highlight the fact that some people have injured their retirement preparation by taking hardship withdrawals. My point was going to be that the Office of Personnel Management should have responded by eliminating the hardship withdrawal program (which some have accessed) in favor of adding electronic banking which would enable individuals to repay loans from their checking accounts. Still seems like a better idea than the recent trend to liberalize hardship withdrawals – as generally permitted in 401(k) plans with less impediments and penalties, starting 1/1/19.

    Some (many?) federal employees may be in the 40% of Americans who could not come up with $400 in an emergency (according to the New York Fed – that is down from 44% two years ago when the Trump Administration took office). And, as a result, it is possible that some of those workers are underbanked and/or have very poor (or no) credit ratings.

    If so, the OPM should also be working on ensuring every individual is getting the full taxpayer financial support in the form of TSP matching contributions. In that way, the individual has resources, and liquidity to use along the way to retirement, using loans (which must be repaid, with interest) to meet short term and/or emergency needs, or to potentially finance larger purchases along the way to retirement.

    As workers return to their jobs, what shouldn’t happen is maintenance of a status quo where very well paid federal workers (where the median wage is well above the median for private sector employers) who have excellent benefits (where benefits for federal employees are well above the median in the private sector) are in a position where a temporary interruption in their income (or some other financial emergency) is deemed to create (expose?) a “horror story”.

    From my lowly position and location, the fact that well paid workers with significant benefits are having difficulty coping with a five week interruption of income is a “horror story” all its own.

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  2. .

    The media intentionally dramatized their financial situation for political reasons. During the 2013 Obama shutdown, the media reported federal employees having fun taking holidays and vacations.

    .

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