Federal Retirement and Financial Freedom–Understand the Risks and Opportunities

By on June 6, 2005 in Current Events, Retirement with 0 Comments

Do you know what you want to do when you retire?

How much money do you have to have in order to be happy in retirement?

How do you know what will make you happy when you are no longer working for someone else?

Comedian/commentator/pundit Andy Rooney once said: "Making duplicate copies and computer print outs of things no one wanted even one of in the first place is giving America a new sense of purpose."

If you work in a federal agency where you have a job such as that described by Andy Rooney, chances are it won’t take much to make you happy when you retire. If your purpose during your working life has been going to work in a job where your purpose is to make copies of large documents no one wanted in the first place, chances are it won’t take much stimulation to keep you happy when you retire. With one major difference: There won’t be an employer giving you direction or tasks to occupy your day. Having a purpose in retirement will require you to think and act on your own.

Most of us need a purpose. Having a lot of money won’t give you that purpose. And, in modern Western society, we are bombarded with ads telling us what we need to make us happy–usually a new product with a high price tag.

Discovering your purpose in retirement will have to come from within you. A Madison Avenue advertising agency doesn’t know what you need or want and you don’t have to spend a great deal of money to be happy. Unfortunately, many of us don’t know either and continue working just because it is something to do or something with which we are comfortable. Facing retirement will force you to question what will make you happy without the structured environment to which you may have been accustomed in your federal career.

There is no one right answer to being happy. Sitting at home and waiting for people to show up or going to the mall and spending money isn’t likely to work. And an enjoyable retirement doesn’t mean you can’t work.

I have been fortunate to meet a number of people in the past several years who are retired and have very happy, productive lives. Most of these people have had successful careers either in government or with private companies. They retired by selling their companies, leaving government knowing that a retirement check will be assured for the rest of their lives, or having some source of income that will enable them to enjoy life. Many of them have enough financial security they could do anything one could reasonably want to do.

Some of these people had a rough time making the transition from being a very productive, successful career person. They thought that hitting the golf course most days would make them happy. But, after a short time, the drive and motivation that made them successful was not extinguished. Once learning that Tiger Woods was a successful golfer based in part on natural talent and youth, as well as spending long hours on the golf course, some of these new retirees decided to seek new outlets for their energy.

Some have started new careers–but on their own terms.

Why would selling real estate make a retiree happy? For some of us, it would be hell on earth. But, on the other hand, a good real estate sales person can make a lot of money, he can make many people happy by finding their ideal house. He can play golf with potential clients and write off the expense. He can socialize with interesting people on a regular basis. And selling real estate doesn’t require setting up an expensive office with a lot of capital investment.

In other words, selling real estate can create a purpose–but with a lot of "vacation time" available for traveling.

Another person decided to buy a farm and he now runs the farm–and is probably working harder than most of us worked during our careers. He works outdoors, grows crops and employes a staff of people to bring in crops. The farm has increased in value and he actually makes money and is having fun in "retirement" because he is doing what he wants to do with no supervisor or board of directors looking over his shoulder.

On the other hand, being retired doesn’t protect you from the perils of being in business. One federal retiree saw the opportunity of a lifetime after moving to Florida. He decided to take his federal retirement (CSRS) in one lump sum, moved to Florida and built condos. He discovered that being successful as an engineer in government did not make him a successful business man and, after spending his retirement funds and encountering various unexpected costs and regulations, ended up losing his business with no retirement funds available despite a long, successful career in government. Without a doubt, he went from living his dream of being a 65-year old successful builder to being disillusioned, unhappy and broke.

No one can tell you what to do in retirement–you may be happy playing bingo at the local senior center or rocking on your front porch or you may find starting your own business with the inherest stress and satisfaction is what you need to be happy.

That is the joy and the danger of retirement. It gives you a chance to effectively start your life over in ways that you find interesting and enjoyable without having to worry about what other people think of your choices. As a successful federal employee, you have built a cushion of security most Americans will never have and will envy throughout the rest of your life as you get a steady retirement check with a cost of living increase built in. But this security doesn’t remove all risk.  Common sense and good judgment are more important than ever–don’t overestimate your own ability or think that you can do what someone else has accomplished during a full career without understanding your own limitations.

And, most importantly, honestly ask yourself what you need to make you happy and then seize the opportunity available to you.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.