The stereotypical view of retirement is that a person leaves work, travels for awhile and then takes it easy until our demise.
The reality is probably much different for most people, especially for those under a federal retirement system where retirement may be possible while still in your 50’s. A person who retires at 55 is apt to be healthy, physicially active and have a number of interests other than sitting in a rocking chair on a front porch watching traffic go by.
Each person is different but, as SmartMoney magazine pointed out in a recent article, there are often three separate phases of retirement. A person who is planning to retire would do well to consider these three retirement phases.
A number of current federal employees will want to continue working after they retire. A "working retirement" sounds like an oxymoron. But continuing to work may be what many readers would like to do for a variety of reasons. Some people like going to work where they have friends, social contacts, a sense of accomplishment–as well as an income. Our desire for these does not go away at a specific age. Working part-time is a good way to continue to keep active as well as maintaining an income. Working 20 hours a week still gives a person an extra 20 hours of time to engage in other things and to ease into a full retirement later.
With some agencies expecting a tsunami of retirements as the baby boomers near retirement age, working part-time may also fulfill the needs of your current employer. Having an agency’s expertise leaving at about the same time is not going to help the agency. In fact, the director of the Office of Personnel Management is supporting the ability of employees to continue working after retirement and wants to remove penalties for civil service employees who do this.
Some current federal employees may also fantasize about going into a new line of work. That is possible but remember to view your expertise from the perspective of a new employer. Do you have expertise in a field or will you be starting over just as if you are a new college graduate? A company is less likely to want to hire a new employee who is about 60 and spend several years training them to learn a new career.
Of course, you may be able to parlay your expertise from a government career into a completely different line of work. For example, this former IRS employee left government service as a relatively young man to cruise around the world on luxury cruise ships. He gets to spend time in exotic ports while living a luxurious lifestyle and provides his fellow cruisers with advice on taxes and how to avoid problems with the Internal Revenue Service–probably much as he did as an IRS district director.
Many current federal employees will find themselves entering a second phase of retirement within a few years: hitting the road. Former feds with a guaranteed income will, no doubt, want to see sights and visit friends and relatives around the country and the world while still healthy enough to enjoy the experience. With people living longer and enjoying good health, many will want to take advantage of the time to see and so as much as possible before entering the third retirement phase.
This third phase, which SmartMoney calls "Watching the Sunset" can be scary–how will you be able to live independently while facing the infirmities that often accompany old age?
Long term care insurance is obviously one part of the equation for many people. Planning living arrangements with increasing need for health care and help in getting by with accomplishing everyday tasks can become a problem.
Underlying all three phases of retirement is the question of money. Will your money last as long as you do? If you retire at a young age, will you have enough to last another 30 or 40 years?
Answering that question will no doubt drive the decison of many current federal employees to delay retirement by a few years or to extend their working life by working part-time as they build up their financial reserves.
In short, remember when planning for your retirement to look into the rest of your future. Retirement starts when you walk out the door of your federal building having filed your retirement papers. That should be the beginning of your initial plan for retirement–you may have a long way to go after you leave.