Managers have an important role in developing their employees; this includes helping their employees become better prepared for retirement. Here are some things a manager can do.
With new employees, a manager should tell them about the Thrift Savings Plan and talk up the plan’s advantages. Starting early is of utmost importance, so employees can allow the power of compounding to work for them.
If the employee does not think they will remain a federal employee for long, a manager can focus on the fact that the TSP is transferable to subsequent employer plans or to rollover IRAs.
If the employee says they cannot afford to contribute to the TSP, managers should encourage them to set aside enough money to at least get the full government match. If an employee puts in 5% of their salary, they will receive 5% from Uncle Sam; that’s a 100% return on their money.
If the new employee speaks of other major goals for which they are saving, they could be asked to consider that the three biggest savings goals for young people are 1) a home; 2) college for their children; and 3) retirement. As a follow-up the manager can then ask them which one of these items won’t a bank give them a loan for?
For a manager who has employees in the middle of their career, different strategies can be effective. Retirement planning is not a topic that will come up on its own when having discussions with employees. Managers could make it a part of career and performance discussions that are routinely held (or at least should be routinely held) with subordinates.
If the agency offers mid-career retirement seminars, employees should be encouraged to attend. Managers can also share retirement related articles. Articles or postings from sources such as FedSmith, Federal Times, Government Executive, can be very helpful.
If a manager is responsible for setting the agenda for all employee meetings or conferences, they can include a speaker on a retirement related topic.
If an employee is considering leaving federal service, a discussion of what would happen to their federal benefits (retirement and otherwise) if they do leave will help them make the right choice.
Managers who have employees closer to retirement should encourage them to attend a pre-retirement seminar. These employees should be encouraged to get an accurate estimate of their federal retirement benefits. Some agencies have software that will allow employees to do this. In other agencies, they may have to contact Human Resources.
For the non-financial side of retirement, a manager should ask the employee what they are planning on doing in retirement. Many people who have worked their entire life are so focused on the fact that they will be able to stop working that they do not give a lot of attention to what it is that they are retiring to. Richard Bolles and John Nelson have recently released What Color is Your Parachute? for Retirement. The book is thought provoking and has exercises that can help individuals realistically weigh retirement alternatives.