Ready to Retire? Readers Offer Advice to Their Federal Colleagues

Are you ready to retire? Some readers are looking ahead in eager anticipation. Others regret switching to FERS instead of having stayed in CSRS. And some HR advisors tell readers that if they plan ahead, a good retirement is possible but don’t blame the system for your misfortune if you don’t have enough money.

Any federal employee who reads news articles pertaining to the federal community has read about the impending "retirement tsunami" as the event is being described by the Office of Personnel Management.

Some readers will recall a public relations push by OPM in the decade of the 80’s to encourage people to switch from CSRS to FERS. Some federal employees did that while others resisted the siren call to a newer, more glorious retirement system. Some readers thinks the switch was a good idea. Others have a much more negative view of their retirement as a result.

With so many members of the federal workforce becoming eligible for retirement in the near future, where do our readers stand in terms of retirement planning and when do they plan to retire?

We asked our readers these questions recently.

Most readers are planning to retire at a relatively young age. 69% of readers responding indicate they plan to retire before they are 62 years old. 12% say they have not done any systematic planning for retirement (hopefully, these are not the same people planning to retire before they are 62) but 52% say they are "about where I thought I would be to meet my retirement goals."

And, if you are one of the readers planning to retire at a relatively young age, do you know how much money you will need? 36% of those responding have not done any calculations to determine how much they will actually need.

Here is a quick summary of the results:
At what age do you plan to retire from your federal job?

  • 65 or older: 12%
  • 62-64: 18%
  • 58-61: 29%
  • 55-57: 30%
  • Younger than 55: 10%
  • undecided: 1%
  • Where do you stand in your retirement planning and saving?

  • I am about where I thought I would be to meet my retirement goals: 52%
  • I am behind where I need to be in meeting my retirement goals: 22%
  • I am ahead of where I need to be to meet my retirement goals: 10%
  • I have not done any systemic planning: 12%
  • undecided: 4%
  • Have you calculated how much money you will need in retirement?

  • yes: 64%
  • no: 36%
  • Here are comments from readers regarding their preparation for retirement.

    An HR specialist from the Air Force in San Antonio says: "Talk the talk but don’t walk the walk. I used to counsel employees as part of my job, but didn’t take the advice myself."

    An industrial specialist with DCMA in Fredericksburg, VA writes: "I am within 4.5 years of retirement and watch the market regularly. I also actively manage my accounts and balance them when they get out of balance. I use what is stated in the L2010 fund as a basis of how my moneys are allocated and activiely participate outside of the TSP in investing in other areas to gain diversification within my overall retirement funds. Being an active participant and staying informed is key for success."

    An IT specialist with the Army in Portland, OR has this advice: "The most important step is determining realisticly how much money you will need after you retire; you need an accurate retirement budget. Don’t retire until you are certain your retirement income will exceed your retirement budget by a safe margin of 10% or more."

    An analyst with the Forest Service in Ketchikan, Alaska has some regrets: "I should have stayed in the CSRS!"

    An engineer with USDA in Durango, Colorado has a similar thought: "I should have stayed in the CSRS!"

    An HR administrator with DoD in Washington, DC has a different view: "As a former CSRS employee who transferred to FERS, I feel I am in good shape with a TSP account of more than $175,000 and an annuity based on 21 years of CSRS service."

    And an HR specialist with the Navy in Silverdale, WA has this advice for those in the FERS system: "FERS employees have the advantage of up to 5% contributions to their TSP funds and should be able to build a healthy nest egg by the time they retire at age 57 through 62, no matter when they started. It is no one’s fault but your own, if you are not ready to retire with your nest egg you want. Perserverance and dedication to your future should mean more than that shiny new material item that is more a want than a need. Learn to live within your means and plan for your retirement. 10% saved from the beginning is better than trying to cram 25 or 30% at the end."

    An attorney with the IRS in Washington, DC writes: "I can retire only because I stayed in the CSRS and did NOT switch to FERS. An indexed defined pension plan beats any annuity anyday."

    A budget analyst with the Air Force in San Antonio has this observation: "I am under the FERS system and started my federal career late in life. I have almost 20 years and am 58 years old. I max out my TSP and also contribute outside to a ROTH IRA. I have done well, but not as well as if I had been in CSRS. I cannot imagine the financial state of others who have not contributed to the TSP."

    A rural development specialist from Puerto Rico has this advice for his colleagues: "If you wait to be debt free, you will never leave. As long as you can meet you [sic] needs and obligations, go."

    A public affairs officer with the Forest Service in California has a plan: "I changed to a 15 year mortage sometime back, and don’t plan to retire until my house is paid for so that I can afford the cut in pay. I won’t be retiring at 55, but I will be able to afford my retirement."

    A management analyst with the Department of State in Rosslyn, VA has a word of warning for future retirees: "I’m actually a reemployed annuitant. I took a buy out at the age of 46, and found I was to young to retire, so I’m back. I didn’t do the proper planning as to what I would do after I retired, and therefore wasn’t prepared."

    A project director with DoD in Pennsylvania is looking forward to a very enjoyable retirement: "The motto ‘save early and often’ is a lesson applied that will pay off well. The benefits of tax deferred, employer-matching retriement accounts (TSP, in this case), combined with balanced investments and periodic re-adjustments, was [sic] allowed me to push my portfolio to over $500,000. At age 45 with 24+ years of service, savings covering the total estimated cost of two college tuitions for my kids and a mortgage that will be paid in 10 years, all my wife (a school teacher) and I need to do now is not change our savings pattern for 10 more years and life will be good, as long as we live it. "

    An HR assistant with the Social Security Administration in Baltimore is not anticipating an enjoyable retirement: "I must use nearly all that I make to live for today. How can one think about saving money for tomorrow when one barely makes through today. It is almost necessary to make daily cutbacks to keep abreast of debts!"

    A future federal retiree who works for NOAA in Boulder, Colorado is headed for another country to retire: "I’m retiring to my home country of Panamá where the cost of living will make it a breeze. No need for all the extra planning besides carrying over health benefits, LTC policy and solid investment in TSP. Some folks from the retired Federal sector have a day maid and gardener on their annuities. Leaves more time for golf, fishing and the beaches."

    And an engineer with the Department of Interior in Sacramento, CA says: "With all the financial web calculators out there, theres no excuse to not be knowlegable and bout retirement expenses and income."

    Thanks to all of our readers who took the time to participate in our latest survey. A special thanks to those who also sent in their opinions or observations on the survey topic.