Will Boomers Retire Like Their Parents?

Will boomers retire as their parents did? Will there be a retirement tsunami as predicted by OPM? No one knows but here are a few predictions about how boomer mentality, changing technology and the need for qualified employees may come together to create a much different retirement scenario.

Will there be a "retirement Tsunami" from the federal government as predicted by the Office of Personnel Management?

No one really knows. OPM estimates 60 percent of the federal work force will be eligible to retire in the next decade, and about 40 percent will actually retire. That seems like a logical expectation and the agency is acting responsibly by assuming that this will actually occur. The agency has has launched a national recruitment effort to bring in new people to the federal workforce.

As you can see from comments on this site, some federal workers would like to retire but have not done so. They apparently view OPM’s recruitment effort as a sign that the agency wants older workers to leave. As one reader said in response to an article on the pending retirements, "[I]f the Government really wants to have a retirement tsunami, they could offer early-outs with no penalties, and I would be more than willing to go home."

In reality, OPM is probably more interested in planning for the future and stemming retirements rather than encouraging talented employees in the existing workforce to leave.

In all likelihood, the recruitment effort will be successful. If it is not, the core problem is likely to be the inability of the federal government to follow through on the hiring process. Most people do not want to wait weeks or months for an answer. If they are willing to wait that long, it may not be because the federal government is the most promising employer; it is more likely that no other company wanted that person as an employee. Hiring new employees that no company wants is certainly not a good way to bring in qualified people to handle the ever expanding authority of the federal government over our daily lives.

There is little doubt that the employment market will be heating up. It’s not just the feds that are going to have a problem hiring new people. With the first of 78 million baby boomers turning 60, America is looking at a shortage in skilled workers that promises to accelerate.

While we may have cut our employment shortage by allowing illegal immigrants to march into the country through Mexico if they are willing to work in low-paying jobs cutting lawns or working in our fields, that is not a good way to get new engineers and scientists and other highly skilled professionals to come to America to meet our employment needs.

Another possibility is that those eligible to retire may not do so. Most of us think of retirement as something everyone does at 60 or at least by 65. But we are living longer. We are generally healthier. With healthy people living longer, many of the current boomers will want to work longer. And, with many people of an age when we think of retirement, some will not be able to retire.

Federal employees who are under the CSRS system are fortunate. Some may not have enough money to retire but Uncle Sam did your thinking for you. Investing in your retirement future was not an option. When you got your paycheck, the money to go toward your retirement program was taken out of your check and you were given a promise of a future retirement payment. It may not be enough to support the lifestyle you would like, but it will probably provide food and shelter as long as you live even if you cannot hop on a plane to Europe or to the beach every year.

Boomers have changed society. Not necessarily by design but by large numbers. The crush in elementary school continued through college. The real estate market boomed and prices exploded as boomers reached an age for getting married and buying a house. Unemployment was relatively high for a number of years and getting a job was a challenge with the competition from the multiple millions of the same age.

Why should retirement be different?

One of the biggest markets in real estate now is the second home market. Anyone who reads any news knows there is currently a real estate slump. Chances are, it won’t last and areas which are highly desirable for retirees are likely to find growing crowds as more of the boomers head for retirement.

Boomers are already buying second homes at a younger age than their parents did and they visit the second homes more frequently than their parents. According to the National Association of Realtors, 7 percent of baby boomers already own a vacation home. That number may go as high as 20 percent in a decade. With real estate prices currently lower than they have been, watch for the explosion as the boomer mentality suddenly leads to a lemming-like conclusion that now is the time to pick up that retirement home because the prices are as low as they are likely to be.

The trend toward a second home is likely to be accelerated by the shortage of skilled employees and the changing technology. Many companies and agencies have doubts about telecommuting. Those doubts can be overcome by the need to hire qualified people. And, throw into the mix the availability of the internet, cell phones, Federal Express service and the ever present Blackberry, and there may be a marriage of convenience for everyone. It may be that a good engineer, consultant, writer or analyst may be able to stare out at the ocean from a beach front condo while continuing to work part-time and bring in some extra money.

And, with a large concentration of federal employees in metropolitan areas like Washington, DC, Houston, San Francisco and Atlanta, many federal employees have accumulated a large nest egg in a home that has become very expensive. Why not sell it and move to the mountains or the beach or a small town with a house you can buy for cash with more amenities and lower property taxes?

Many boomers will opt for these alternatives because they can do it and because employers will need their services.

In short, OPM may be right that a "retirement tsunami" is coming. But it may not be as sudden or as bad as many fear. We are living in a time of cultural and technological change that opens new alternatives. The generation that saw the rise of communes and the crowning of the VW Beetle as the "hot car" of a decade, may not be adverse to spending a few months–or the rest of their lives–surrounded by the sounds of ocean waves or wind in the pine trees. Of course, having lived through the boomer tsunami, we can also reasonably expect the sounds of nature will also be punctuated by the sounds of millions of people all havng the same idea at about the same time.

New challenges bring new opportunities. My prediction: The "ho-hum" generation will do fine as federal employees, perhaps even better than the World War II or the baby boomer generations. The federal government will make enough changes in its hiring system to bring in good people. Current federal employees who want to continue to work will probably be able to do so and to live a lifestyle that they want. And, while readers who wish to do so may ponder their options, I am headed for the beach for a walk along the ocean after sending out today’s newsletter through the high speed internet connection on a fast laptop computer that did not exist as little as five years ago.

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. Follow Ralph on Twitter: @RalphSmith47