More feds doing life sentences

[W2R]

For years it was thought that retirement of massive numbers of federal employee baby boomers would create a shortage of federal workers at some point. Apparently that hasn't happened, and annual numbers of retirees has stayed relatively steady. Recent economic difficulties may be playing a part in this, according to the article.

The number of retirement-eligible feds (people with more than enough time in government) may be at an all-time high. Congress keeps threatening to make federal employment less enjoyable and lucrative.

But the bottom line is that the "retirement tsunami" first predicted in 1999 still hasn't hit. And even if agencies open the door by offering $25,000 buyouts, there is no indication that hordes of people will flee the government for retirement or unemployment. Retirements have held steady (in the 60,000 range) year after year, and the quit rate is actually down. That's probably a reflection of the miserable nonfederal job market.

More feds doing life sentences - FederalNewsRadio.com

 

[Helen]

For years it was thought that retirement of massive numbers of federal employee baby boomers would create a shortage of federal workers at some point. Apparently that hasn't happened, and annual numbers of retirees has stayed relatively steady. Recent economic difficulties may be playing a part in this, according to the article.

I am puzzled as to why the economy would stop someone under CSRS from retiring, but I've heard coworkers use that as a reason.

 

[Nords]

For years it was thought that retirement of massive numbers of federal employee baby boomers would create a shortage of federal workers at some point.

This reminds me of the paranoia about "What if the Boomers all retire and sell their stocks and the S&P500 goes to zero?!?"

 

[Bestwifeever]

this reminds me of the paranoia about "what if the boomers all retire and want to sell their [-]stocks[/-] houses and the [-]s&p500[/-] housing market goes [-]to zero[/-] in the toilet?!?"

fify

 

[JPatrick]

This reminds me of the paranoia about "What if the Boomers all retire and sell their stocks and the S&P500 goes to zero?!?"

That one is still alive and well though it is likely baseless.

Today's worry is just getting shellshocked investors back into the market so they can sell.

 

[harley]

I suspect it has to do with the lack of savings outside the federal pension, combined with FUD. Many, if not most, federal employees are what I would consider to be conservative financially, and just don't want to lose a good job during a time where they feel uncomfortable about the future of federal pensions. Even if everyone tells them their benefits are safe, they may not accept it at gut level.

 

[W2R]

I suspect it has to do with the lack of savings outside the federal pension, combined with FUD. Many, if not most, federal employees are what I would consider to be conservative financially, and just don't want to lose a good job during a time where they feel uncomfortable about the future of federal pensions. Even if everyone tells them their benefits are safe, they may not accept it at gut level.

Yes, that is a good point. Fear, Uncertainty, and Doubt (FUD) is a reasonable attitude when federal pensions are on the line. Also, by now the great majority of federal employees are in the FERS system (not the older CSRS system with the larger pensions), and FERS relies on having a significant TSP balance upon which to rely. As you point out, few seem to be accumulating enough savings either inside or outside the TSP to retire on. At least, that was the case among those I knew.

 

[Bimmerbill]

There are plenty of CSRS employees here that are retirement eligible and are not retiring. I don't know why! I talked to a guy recently and helped him figure out what his pension would be. Turns out the guy would make more being retired after we took out the CSRS contributions, TSP, some $ for commuting expenses, taxes, etc.

Most of the old timers here may be making 10% more by working. Heck, I'd retire with that spread any day!

 

[ziggy29]

There are plenty of CSRS employees here that are retirement eligible and are not retiring. I don't know why! I talked to a guy recently and helped him figure out what his pension would be. Turns out the guy would make more being retired after we took out the CSRS contributions, TSP, some $ for commuting expenses, taxes, etc.

Admittedly from my non-fed point of view, it boggles my mind. For anyone with enough service to be in CSRS, unless they lived horribly beyond their means, I can't imagine financial constraints being the reason. Maybe they fear they may get bored and have second thoughts about retirement, and fear they won't be able to find another j*b (fed or otherwise) if they do want to go back to w*rk? That's all I can come up with.

The FERS people, though, yeah I can see that. There is a considerable need for personal savings through TSP and otherwise for most FERS employees, and they may well share the same angst as I and others do about my 401K (namely that it won't grow enough in future years or through their retirement). And not many people feel secure about the size or direction of their "defined contribution" retirement plans, be it TSP or a 401K or an IRA or whatever.

The larger the "unknown" component of your retirement, the more tendency there may be to fall victim to "one more year syndrome."

 

[Mulligan]

There are plenty of CSRS employees here that are retirement eligible and are not retiring. I don't know why! I talked to a guy recently and helped him figure out what his pension would be. Turns out the guy would make more being retired after we took out the CSRS contributions, TSP, some $ for commuting expenses, taxes, etc.

Most of the old timers here may be making 10% more by working. Heck, I'd retire with that spread any day!

This happens more than you think, though I wasn't nearly as noble, I know many teachers who would have more take home pay, not working than working, yet they continue. They cite various reasons with none of them being true. What they should say is the truth, which is they love their job and wouldn't know what to do without it. There is nothing wrong with that, but I believe they are too embarrassed to admit it for some reason. Some won't even acknowledge how many years they have worked as their coworkers will question why they won't retire.

 

[martyb]

It's not a one-size-fits-all deal. Think about a GS-5 or GS-7 secretary who's retirement eligible. Even under CSRS, they're not gonna have an exactly lucrative pension coming in. Say somebody's hi-three under CSRS with 30 yrs is 40,000. I think at age 55 & 30 yrs, the multiplication factor is something like 56.25% of hi-three. If that's not exactly right, it's very close. What's that work out to.....$22,500 per year? And...because this person was working under CSRS all those years, likely may not have any Social Security earned so that's out. Not exactly a lucrative retirement...is it? That person may very well realize they don't have much of a retirement to look forward to if they check out when first eligible, so decide to keep working. To simply say they should have saved up a big pile of money over the years does not consider all the things that can happen in the average person's life....death of a spouse and loss of their income, nasty divorces that can wipe people out financially, family disasters that do the same.....major illnesses, just plain poor financial decisions, deals gone bad...etc. Not everybody has the mindset or resources to put much away. Sometimes, life just gets in the way...kid issues, relative issues. So a 55 yr old person reaches retirement eligibility age at 55, looking at a pension of $22500 before taxes, before health insurance, life insurance...maybe survivor benefits....I can see why people keep on working. There are MANY more feds working at the GS-5,7,9 grades than you might suspect. MANY of them will retire at those grades. Not even nearly everybody can move up to higher grades. A GS-5 sales checker working at the commissary is very likely to have started as a GS-3, and also very likely to be a GS-5 when she retires. Not a failure on their parts, just that not everybody is cut out to move up the ladder. Those are the people that the talking heads forget about when they're denigrating and trashing the federal employee and looking to find a scapegoat for Washington's failed financial policies. Let's just put it on the backs of federal workers. They forget or don't care to find out about the hundreds of thousands of feds who do the less visible and lower paying work. Those are the ones who really will get screwed.

 

[happy2bretired]

It's not a one-size-fits-all deal. Think about a GS-5 or GS-7 secretary who's retirement eligible. Even under CSRS, they're not gonna have an exactly lucrative pension coming in. Say somebody's hi-three under CSRS with 30 yrs is 40,000. I think at age 55 & 30 yrs, the multiplication factor is something like 56.25% of hi-three. If that's not exactly right, it's very close. What's that work out to.....$22,500 per year? And...because this person was working under CSRS all those years, likely may not have any Social Security earned so that's out. Not exactly a lucrative retirement...is it? That person may very well realize they don't have much of a retirement to look forward to if they check out when first eligible, so decide to keep working. To simply say they should have saved up a big pile of money over the years does not consider all the things that can happen in the average person's life....death of a spouse and loss of their income, nasty divorces that can wipe people out financially, family disasters that do the same.....major illnesses, just plain poor financial decisions, deals gone bad...etc. Not everybody has the mindset or resources to put much away. Sometimes, life just gets in the way...kid issues, relative issues. So a 55 yr old person reaches retirement eligibility age at 55, looking at a pension of $22500 before taxes, before health insurance, life insurance...maybe survivor benefits....I can see why people keep on working. There are MANY more feds working at the GS-5,7,9 grades than you might suspect. MANY of them will retire at those grades. Not even nearly everybody can move up to higher grades. A GS-5 sales checker working at the commissary is very likely to have started as a GS-3, and also very likely to be a GS-5 when she retires. Not a failure on their parts, just that not everybody is cut out to move up the ladder. Those are the people that the talking heads forget about when they're denigrating and trashing the federal employee and looking to find a scapegoat for Washington's failed financial policies. Let's just put it on the backs of federal workers. They forget or don't care to find out about the hundreds of thousands of feds who do the less visible and lower paying work. Those are the ones who really will get screwed.

Very well said! There are many very hard working feds in those grade levels. I was one of them. Started at a GS-3 and ended at a GS-9. I'm very grateful that I was given the opportunity to get my 9.

 

[W2R]

I can't find the figures, but it seems to me that I read somewhere that about 85% of federal employees are now FERS instead of CSRS. That may have been a few years ago.

I feel Google-impaired.

And yes, happy2bretired, there are a lot of hard working feds in those grade levels, so true. Going from a GS-3 to GS-9 was not easy to do in my agency, either; quite an accomplishment.

 

[foxfirev5]

Wow talk about a tale of two worlds. I read the first few posts and kept going. Sour grapes on my part but I know I could make retirement work with these gov't plans. I look at people retiring from my company after the pension disappeared, benfits went away, and realize that was 20 years ago. Most of us adapted and are still positioned for retirement.

 

[freebird5825]

...FERS employees (85%?) are not in the same position as those in the old CSRS system and must save to fund their own retirement. When I was working, most of my co-workers were in the FERS system and despite "retirement training" seminars frankly it seemed to me that the majority of them were not saving enough for retirement.

I also found this to be true where I w*rked. New cars and "latest and greatest" technology consumer purchases seemed to be the main priority.

I entered fed service in 1988 as a GS-11 and immediately signed up for the TSP at the 5% contribution level with the 5% match. I increased my contributions to 10% a few years later. A few more years later, every time the contribution rate was increased (11-15% annually), I pushed it right up there while earning a GS-12, then a GS-13 salary. I maxed it up to approx 19% for the last 2 years I was there for that extra "before I say " boost. I needed the tax deferral as well as the pre-exit boost.
After 18 years 3 months of fed service, and using a standard 60/40 AA for my TSP, I had a sizable nest egg.
Most of my co-w*rkers (of similar grade) were astounded at the amount I had squirreled away. I would usually respond by pointing to my faithful 1992 Honda Accord with rust developing on the back quarter panels and chuckle.
Some laughed right along with me, some got a confused look on their faces.

 

[Bestwifeever]

I know only a couple of people with fed jobs, one with USDA and one retired AF (is that considered a fed?). We never get any coverage in Chicago that I can remember about federal employees retirement benefits so I am clueless about them just as you feds would be about private sector stuff.

Both of my parents worked for the gummint but did not live long enough to take much $$ from retirement benefits (mom none, dad maybe 2 years?).

 

[Khan]

Last I heard, my EX was still employed (CSRS 40 years GM-13)

 

[Redbugdave]

Khan...Your EX will retire with about 80 to 82 percent of salary. Adding sick leave will push the retirement above 80 percent. That's pretty good...a 13...step 10...makes around $106,000.

 

[Helen]

I'm amazed at the number of CSRS employees who never put a cent into the TSP. I've brought up the topic of TSP to several coworkers and had them respond, "I don't contribute, I'm CSRS".

I've also read the Fedsoup forum and other federal employee websites. I can't believe the amount of stressing people do about having to wait several months post retirement before their pension kicks in. It sounds to me like many of them have no money put aside, or at least not enough to cover their expenses for several months.

 

[martyb]

My boss is a GS-13, almost 41 yrs and is finally retiring this December. I thought he never would....

 

[Redbugdave]

Helen...I read the FedSoup forums, also. I'm like you. I think many of the people there just la la along and never gave the future much thought. Almost none of the CSRS folks put into the TSP...and none at my office. Some say because of no matching. Lately, I believe OPM has been slow on processing the new retiree's checks. It was around 6 months before they started. It may be better, now. You need to have some money on the side for unknown events. I think FERS retirements will start around 2014, and there will be fewer and fewer CSRS people kicking around. I missed out on CSRS by about one year. So...I will be one of the first FERS people to go, in 2014.

Hey Marty...2 years and 3 months! I am looking for acreage in the country, now.

 

[Nords]

I can't believe the amount of stressing people do about having to wait several months post retirement before their pension kicks in. It sounds to me like many of them have no money put aside, or at least not enough to cover their expenses for several months.

When I attended the military's three-day retirement seminar in 2000, one of the presentations was on the mechanics of getting the pension payment from DoD to your checking account. These were all people in their late 30s to late 50s who had accumulated at least 20 years of service. Admittedly most of them were planning bridge careers. No raw recruits in this crowd, and most of them were senior leaders.

95% of the curriculum was about getting a job. That's DoD's mandate. None of it was about financial planning (except possibly the talk on survivor benefits plans). DoD's interest is financial responsibility, not financial planning.

The instructor said that military pay was two weeks in arrears but pensions were a month in arrears. There were occasional setup problems with new retirees, and that a few percent of us would have to wait up to six weeks for that first pension check.

The shock and dismay that rippled across the room was audible. Reactions varied from "Whoa..." to "Wait-- what? But... but... but..." spluttering.

In other words, most of these people already couldn't skip a two-week paycheck. The idea that they might have to skip two of them before getting caught up was simply unfathomable.

A veteran who retired last month confirmed that the same thing happened in his recent transition class, too.

 

[ziggy29]

I've also read the Fedsoup forum and other federal employee websites. I can't believe the amount of stressing people do about having to wait several months post retirement before their pension kicks in. It sounds to me like many of them have no money put aside, or at least not enough to cover their expenses for several months.

Is that how it works, even under CSRS? It takes several months for the pension to kick in after retirement?

In other words, most of these people already couldn't skip a two-week paycheck. The idea that they might have to skip two of them before getting caught up was simply unfathomable.

Okay, now *that* I find just plain sad.

 

[Amethyst]

I must move in a different circle of "feds." I get the impression that people I work with - including lower GS grades - are financially responsible, very aware of their benefits, contribute the max to TSP, and LBYM (except in the areas of "kitchen upgrade" and "daughter's wedding," where it's considered OK to boast of large $ layouts). Surely there are exceptions, but those must be the ones who keep their heads down and say nothing.

Amethyst

 

[ziggy29]

I must move in a different circle of "feds." I get the impression that people I work with - including lower GS grades - are financially responsible, very aware of their benefits, contribute the max to TSP, and LBYM (except in the areas of "kitchen upgrade" and "daughter's wedding," where it's considered OK to boast of large $ layouts). Surely there are exceptions, but those must be the ones who keep their heads down and say nothing.

Were these CSRS feds or FERS feds, though? Helen was mentioning CSRS feds above with respect to not using TSP. I can't imagine many feds on FERS who are *not* using TSP will have a very comfortable retirement... or may have to wait until FRA for SS to kick in -- if then.

This would be something much easier for CSRS retirees to ignore than FERS retirees, or at least I'd think.