Flood of 2010 Retirees Possible?

[W2R]

Federal retirements hit seven-year low in 2009

As the economy collapsed last year, federal retirements dropped to their lowest level in seven years, according to statistics released Monday by the Office of Personnel Management.

OPM said 43,649 full-time permanent employees retired in fiscal 2009 — 27 percent fewer than OPM had projected would retire. Federal retirements haven't been that low since fiscal 2002, when 41,699 employees retired.

"I've never seen that large a difference" between projections and actual numbers, said John Palguta, vice president for policy at the Partnership for Public Service. "But it's important to understand these are deferred, not canceled, retirements. I'll wager that in 2010, we'll see clearly higher retirement numbers."

Federal employees may not be the only ones who decided to put off their 2009 retirements until 2010. Does this mean there will be a flood of seniors at weekday matinees at your theater, scarce tickets on cruise ships, and overcrowded golf courses during the week soon? I'm glad that more people are able to retire this year.

By the way, that is 43,648 full time permanent federal employees who retired in 2009, plus one - - I'm the 43,649th happy 2009 retiree.

 

[audreyh1]

Well, we seem to have our own little wave here!

Audrey

 

[Alan]

By the way, that is 43,648 full time permanent federal employees who retired in 2009, plus one - - I'm the 43,649th happy 2009 retiree.

Good to see that you "bucked the trend"

 

[MasterBlaster]

Federal retirements hit seven-year low in 2009


Federal employees may not be the only ones who decided to put off their 2009 retirements until 2010. Does this mean there will be a flood of seniors at weekday matinees at your theater, scarce tickets on cruise ships, and overcrowded golf courses during the week soon? I'm glad that more people are able to retire this year.

By the way, that is 43,648 full time permanent federal employees who retired in 2009, plus one - - I'm the 43,649th happy 2009 retiree.

Once the markets recover, in maybe 2-3 years or so, I suspect that we will see a flood of public and private retirements. It is inevitable when potential retirees are comfortable with their retirement outlook.

Not everyone is in debt up to their ears.

 

[Alan]

..and possibly a flood of employees quitting in 2010.

more-workers-start-to-quit: Personal Finance News from Yahoo! Finance

Recruiters and human-resource experts say the increase in employees giving notice is a product of two forces. First, the natural turnover of employees leaving to advance their careers didn't occur during the recession because jobs were so scarce. This created a backlog of workers waiting for better times to make a move to better jobs. The median monthly voluntary turnover rate in 2009 was 0.5%, half of the rate in 2008, according to the Bureau of National Affairs, a specialized news publisher for professionals.

 

[Rich_by_the_Bay]

Hard to know whether a pensioned population reflects the general population. I could see where they would be the first to retire early given the pension, while non-pensioned groups might feel compelled to back way from that decision pending some market stability.

These types of trends are sometimes tricky to interpret. To personalize it, if I had had even a $35K pension, that net present value of $500+k at around 4% would have put me over the top much sooner.

 

[RunningBum]

If people deferred retirement from 2009 to 2010, are you seeing fewer seniors at matinees, taking discounted cruise tickets, at golf courses, etc, this year? Next year would be just getting back to normal, strictly based on that report of govt workers.

 

[kaudrey]

I wonder if it might take several years for it to go back up. With the DOW again under 10,000, more people might decide to delay longer than a few months or a year. I work for the gov't, and the older people in my agency haven't really delayed, but I think many of them are still under CSRS, so they are getting 80% pensions and aren't too worried about it. I still have a long way, but if I were going now under FERS, I'd definitely pause.

 

[Tesaje]

They fiscal 2009 so that means W2R doesn't count. FY goes from 10/1 to 9/30. Sorry, by that accounting, you are in the same batch as me - FY 2010. Wonder if the FY 2010 numbers will be higher or more on track with the expected baby boomer bubble? The peak BB demographic is 1955 and they become eligible this year. The dip probably did reflect fear from the 2008 crash.

 

[Tesaje]

I wonder if it might take several years for it to go back up. With the DOW again under 10,000, more people might decide to delay longer than a few months or a year. I work for the gov't, and the older people in my agency haven't really delayed, but I think many of them are still under CSRS, so they are getting 80% pensions and aren't too worried about it. I still have a long way, but if I were going now under FERS, I'd definitely pause.

Only if they retired with 41+ years or were under law enforcement rules! I went out with 56%.

I hate it when people grossly inflate our benefits.

 

[ziggy29]

I wonder if it might take several years for it to go back up. With the DOW again under 10,000, more people might decide to delay longer than a few months or a year. I work for the gov't, and the older people in my agency haven't really delayed, but I think many of them are still under CSRS, so they are getting 80% pensions and aren't too worried about it. I still have a long way, but if I were going now under FERS, I'd definitely pause.

Hard to tell. I suspect very few people in the private sector (or even feds under FERS) have felt comfortable enough to retire, but I could be wrong. It's not a good time to be taking chances if you don't have a secure and sufficient income stream. The vast majority of new folks here announcing they have recently (or soon will) retire early have pensions. Seems to me we're entering a new era of retirement where you either have a pension or save like hell in your 20s and 30s if you want to have any hope of retiring before your full SS benefit age. Which can be a real problem with persistently high unemployment and young'uns constantly looking to enter the workforce.

 

[brewer12345]

Not just retirees moving on: more-workers-start-to-quit: Personal Finance News from Yahoo! Finance

 

[DeborahB]

I'm in the private sector, and retiring on my savings in a few weeks. I am not happy at work, I'm about to turn 62, and to hell with it!

I did figure out the tax situation (guessing at future income taxes but at least it was relative numbers). As of the moment I'm going to live on what I take out of savings (gasp!) and start SS @ 66 if I can. I have big taxes on a ROTH IRA conversion to pay in 2011 and 2012.

I saw the article this morning - WSJ originally - and laughed out loud! My leaving will really be difficult for this place. Gee. Imagine my guilt ...

 

[Amethyst]

Ditto. It makes me so mad that the rumors of enormous CSRS benefits just aren't true It still is nice to have a pension, though.

Only if they retired with 41+ years or were under law enforcement rules! I went out with 56%.

I hate it when people grossly inflate our benefits.

Also, I am married to a senior, so I take advantage of every matinee, 10% discount, half-price library book fine, etc. that he can wangle! Truly, though, the discounts don't amount to much. They are never on anything we really want, such as a washing machine, flat-screen TV, roof repair, etc.

Now, if we would only see the prices of Florida real estate recover, due to all those retirees...

Amethyst

 

[beowulf]

My informal poll of feds eligible for retirement that I know personally indicates that most who are eligible and have delayed are seriously considering retirement in FY2011. Based on conversations with them, the stock market has little to do with the decision - it's more a matter of potential work opportunities after they leave federal employment.

Of course, these are all CSRS folks and they don't need to depend as much on their TSP returns as the newer FERS employees. Of course, this is a tiny sample and feds are notorious for saying they will retire and then don't carry through.

I left at 55 with 33 years service and have no regrets. But then again, I'm still employed as a consultant to the government . That being said, I am hoping to make this my last full year of employment of any kind .

 

[Tadpole]

I'm 62 and leaving under FERS this year. A contractor approached me to do similar work with them but I think when a FERS employee leaves they really want to go do something else. The early retirement - work for a contractor model just doesn't give the benefit to a FERS employee that the CSRS employees get. I wonder if more and more feds will chose to continue to work longer as a fed because of this. I find it ironic that FERS was "more portable" but, in reality, after one is in their 50s it may not be worthwhile to leave for another job unless the pay is magnificent.

 

[Bimmerbill]

I talked to one of the fire fighters here and he said when he leaves in 18 months he will be making $500 more a month than he makes now. I think he gets 80% of his high 3, CSRS special retirement.

I cried myself to sleep that night.

 

[Redbugdave]

One consideration about retiring under FERS and doing other work...is having your SS Suppliment reduced $1 for every $2 earned from other work. That could be a factor with someone working longer instead of retiring and working at a different job or consulting. I think Tadpole may be referring to the earnings test.

 

[Tadpole]

One consideration about retiring under FERS and doing other work...is having your SS Suppliment reduced $1 for every $2 earned from other work. That could be a factor with someone working longer instead of retiring and working at a different job or consulting. I think Tadpole may be referring to the earnings test.

Yes, it is partially the supplemental but also the Social Security leg itself which also has earning limits before full retirement age. Another important distinction is that FERS does not receive pension (diet) COLAs before age 62. The latter is a mute point right now but will be a disincentive to retire and work contract or another job in the future as the workforce becomes almost entirely FERS unless the job has substantial salary and/or benefits. Two other things that FERS will receive if they continue to work as a government employee are the 5% match and no limit on the number of years in the pension computation. A minor component is the ever so slight increase from .01 to .011 in the pension computation at age 62. Of course a job which adds back all of these elements into it's salary and benefits would be attractive.

Having said that, I will retire at age 62 and do not want to start Social Security. For most people the FERS pension will not be enough to live on without a second source of income. So if you retire at age 62 you will have the choice of starting Social Security, living off the FERS pension, getting another job, or beginning to spend savings. An example: suppose the age 62 SS is 1500/mo and a TSP account invested entirely in the G fund. It will take a TSP account of almost $550,000 at the current G fund return to replace the SS without tapping the principle.

 

[Bimmerbill]

I'm hoping to retire at 56 years, 4 months. That's my minimum age under the MRA +10 provision. The lack of COLA from 56 to 62 worries me, as well as the penalty for retiring early. I'll have to see how things look when I get close to retiring.

 

[ziggy29]

I'm hoping to retire at 56 years, 4 months. That's my minimum age under the MRA +10 provision. The lack of COLA from 56 to 62 worries me, as well as the penalty for retiring early. I'll have to see how things look when I get close to retiring.

Yeah, that is a concern. I'd be inclined to lean my portfolio toward "inflation protection" mode until age 62 in that situation, but maybe it's just me. I'd probably pick up a slug of individual TIPS that mature close to my 62nd birthday, and once my income stream was largely COLA'd I'd probably revert to a more standard retiree allocation. Then again, that also depends on the economic environment as I were approaching, say, 55.

 

[Redbugdave]

Tadpole...If you decide not to take your SS at 62 1/2, and wait till age 65...your SS suppliment will automatically stop at age 62 1/2 anyways. So, you will get nothing till 65 when you start your SS. I have looked at the different angles planning wise...

 

[Tadpole]

Tadpole...If you decide not to take your SS at 62 1/2, and wait till age 65...your SS suppliment will automatically stop at age 62 1/2 anyways. So, you will get nothing till 65 when you start your SS. I have looked at the different angles planning wise...

I'm retiring at the end of the month that I turn 62 so no supplemental.

We are in a good position at first. My husband retired last August and has a small non-colaed pension and his reduced SS. It turns out that with just my FERS pension we will only need about $200 additional funds per month to match our current spending. (This is after some initial expenses connected with our move to another state but I have already pre-saved for this.)

I am also considering taking a 10 year dump (payout annuity) of my TIAA holdings. Coincidentally this is about the same yearly cash flow as SS would have been (without COLA). I will reinvest most of this after-tax. This will reduce the RMD down the road. Just thinking about this though. The truth is that I can probably do this with little affect on our principle even if we spend most of it.