The Reality of “Generation U”

The federal retirement Tsunami has been the source of speculation and articles but this Tsunami has not occurred. This cultural trend is not unique to the federal government. Here are some of the reasons.

Many Americans grew up with a rough plan in mind to guide their lives: Go to school, get married, buy a house, get a good job and retire at a pre-determined age. For most Americans, a retirement goal was 65. For many federal employees, a retirement goal was 55.

Most readers have seen comments about the federal “retirement Tsunami.” This mass exodus from the federal workforce will supposedly occur because baby boomers will leave the workforce en masse.

Many have retired but there is a large number of baby boomers eligible to retire but are still working for the federal government. And, with the recent passage of additional federal benefits that will make it easier for agencies to rehire some federal employees who have already retired, some people who left their federal office to go to the mountains, the beach or travel around the world may be coming back to work with a federal employee identification card once again dangling around their neck.

Why haven’t more baby boomers retired?

From reading comments on this site and elsewhere, an objective observer could easily conclude the workforce has a large number of very unhappy people who feel their lot in life is much worse than it should have been.

In fact, we have published an article on this site about the whining in the federal workforce and how a supervisor has to deal with the problem. (See Effective Whine Management: A Critical Skill for Federal Managers and Supervisors)

From this, one might quickly conclude there will be a stampede for the exit offered by the federal retirement plan as federal employees who are eligible to retire quickly leave for greener pastures. But this has not happened.

Here are the number of employees who have retired in recent years. There is no evidence of a dramatic surge as the baby boomers in the workforce age.

Year No. Of Fed Retirees
2004 55769
2005 61585
2006 60246
2007 62244
2008 58800

34699 (9 months only)

Average (for full year figures) 59728

Moreover, it isn’t just the federal workforce where the “baby boomers” are staying put.

In fact, a recent article in Psychology Today has a term for this new trend: “generation U” or the unretired generation. Here are some of facts cited underlying “generation U”:

  • 93% of the growth in the American labor market until 2016 will be 55 and older. The average retired couple may need more than $300,000 in savings to live comfortably and pay off late-life health care costs.
  • Only 20% of retirees now feel very confident they have enough money to live comfortably throughout their retirement. The comparable figure in 2007 was 41%.
  • Eight out of 10 baby boomers say that they plan to work at least part time after they reach official retirement age.
  • 36% of those 56 or older are still working – more than ever. That’s more than twice as many as in 1984.

Federal employees need less in savings than most Americans because of the retirement system. But, if you are in the FERS retirement system, or even an employee under the CSRS system who put a lot of money into the federal Thrift Savings Plan, your assets have probably diminished during the recession. Anyone planning to retire needs to plan carefully to make sure you can live comfortably and enjoy your retirement. A big drop in your assets may make you think twice before walking out the door. (See, for example, As the Economy Crumbles: One Federal Retiree’s Feeble Attempts to Cope)

Baby boomers are also healthier than previous generations. If you recall a relative who was 65 or so when you were a young child, many of these folks seemed really old and frail. People who worked in occupations that led to injuries, or working in a rural area with no health care available, or falling prey to a wide variety of diseases meant people were not as healthy and died at a younger age. In other words, a person who is 65 today may be healthier than a much younger person in an earlier era.

It is also likely that many federal employees who are working despite retirement eligibility are doing so because they like their job. It provides a sense of self-worth and these folks derive satisfaction from going to work and providing a service or contributing to a worthwhile mission or project.

What are your plans for retirement?

Here are the survey results submitted in response to this article.

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