The good news was that I was retiring from the Federal government and would be free to do anything that I wanted to do, subject to some new financial constraints; that was also the bad news, since I had spent the last 26+ years working for the Federal government and was about to take a leap of faith at the end of which my parachute, whatever its color, might not open.
My agency was offering a buyout, with a two-year extension, and I was eligible for early retirement, though subject to a substantial age (49) penalty, so I ended my Federal career. I did so, however, with very mixed feelings. In fact, I did not sign my retirement papers until the last hour of the last day of the buyout, which I think says that I was a bit uncertain if I was really ready to leave.
Most of you are probably familiar with “Newman’s Own” salad dressing and the many other food products the company produces, with all net profits ($175+ million at last count) going to charity. The company’s famous co-founder, actor Paul Newman, has a widely-quoted approach to planning: “If we ever have a plan, we’re screwed!”
I didn’t intentionally follow Mr. Newman’s advice, but you could easily be excused for thinking that I had. Few if any Federal employees could have been less prepared – financially or emotionally – than I was to depart the government.
The “plan,” to the extent I had one, was to do human resources (HR) and equal employment opportunity (EEO) training and consulting work with my closest friend, who was taking early retirement the same day. And I did learn before leaving that my agency was interested in bringing me back as an environmental consultant (I had been doing double duty, with both HR and natural resources responsibilities, for several years), giving me a financial and emotional “cushion” that many retirees don’t have.
The advice I heard from many Federal retirees was to take at least six months after retiring before making any decisions related to going back to work in some capacity. I think that was very good advice. Not that I followed it, of course; I didn’t take much more than the weekend off before beginning my “new career” as a full-time environmental consultant.
This is another area where I hope you don’t follow my example. I did not even have a benefits specialist give me an estimate of my annuity, perhaps because I was afraid that the actual number would be low enough to scare me out of retiring, or perhaps just because of my natural gift for procrastination. If you are contemplating retirement, I would strongly encourage you to get a very good estimate of your annuity and to figure out, perhaps with help from a certified financial planner, how much you need to live and, if there is a gap between income and expenditures after retirement, how you plan to fill it.
Many Federal employees participate in the Thrift Savings Plan (TSP), and I was one of them. There was a fair amount of money in my account by the time I retired, but it grew at an even faster pace without my contributions, benefiting from the “go-go” stock market of the late 1990s. Some friends who were also Federal retirees had done very well by withdrawing their TSP funds and investing in the stock market on their own. I allowed myself to be convinced that I could do it, too. I was like a kid in a candy store, buying dozens of individual stocks, mostly of the high-tech variety, in late-1999.
For the first few months my new stock acquisitions were doing so well that I couldn’t wait to get into my electronic accounts each morning. That lasted about three months, after which I watched in horror as the stock market crash of 2000 – 2002 decimated my investment portfolio; I figure that I will have to live to be at least 125 just to get back to even.
Based on my experience, I would advise anyone who retires and is considering withdrawing their funds from their TSP accounts to seek financial counseling from a carefully checked out investment advisor before doing so.
Several of my major objectives in taking early retirement have been accomplished. For example, I have gotten to spend more time with family and friends, which has been great. I have also had the opportunity to spend lots more time traveling for pleasure; I’ve spent an average of at least eight weeks per year on vacation for the last 10 years. During that time, my wife and I have traveled with friends to many fascinating and beautiful parts of the world, including trips to Europe, Australia & New Zealand, French Polynesia (Tahiti), the Caribbean, Hawaii, Canada and Mexico.
I have also had plenty of time to enjoy participating in sports, from football to tennis and from running in 5K races (and the exhausting, exhilarating 10K Bolder Boulder) to mid-week skiing, when the traffic is light and the lift lines are short. I have time to work out at the “Y,” typically four days a week, and all of that exercise seems to be keeping me healthy, in that I haven’t missed a full day of work due to illness in the 10 years that I have been retired.
Working from Home
Most “normal” people undoubtedly have far less trouble adapting to working at home than I did. As a consultant, I was still working from an office at my former agency, although management officials were urging me to vacate. I resisted, primarily because going to an office is what I had done every day for more than 26 years; it may well have been my security blanket. After almost a full year, agency officials had despaired of me ever leaving of my own volition, so they dropped a hint that even I couldn’t ignore. It was “Get out!” So, I reluctantly went home. One of my other major concerns had been that I might not have the self-discipline to work at home. As it turned out, that was no problem, and since my home-office had a computer with an Internet connection and e-mail, multi-function printer, phones and a fax line, I had the ability to work 24/7 if necessary, and on more than a few occasions I almost literally did so.
The self-discipline issue did arise, but only in terms of my inability to resist dark chocolate and other junk food, which was now readily available within steps of my study. Working at home did eliminate a number of distractions, such as chatting with co-workers (recognizing the value of such conversations, kept to a reasonable length, in building camaraderie at the office) and, at least in my case, allowed me to focus completely on the work at hand. Recent studies have shown that some people suffer from “social withdrawal” when working at home, but I typically had meetings to attend at my old office at least once a month and I represented the agency at numerous sites around the country, so I felt that I had all of the social contact that I needed.
While it took me far too long to appreciate the virtues of working from home, I eventually came to understand how fortunate I was. After all, how many people working in an office get to take naps in the afternoon or to watch “Days of Our Lives?” And my daily “commute” consists of climbing a dozen stairs up to my den. By now, I am so well adapted to working from home that the thought of working in an office ever again makes me a bit queasy.
In future articles, I’ll address some of the other pleasures and potential pitfalls involved in retiring from the Federal government, including such questions as whether agencies in general, and HR offices in particular, should have any responsibility in preparing employees for retirement.