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The Office of Personnel Management on Wednesday unveiled a prototype of a new retirement preparation tool for federal employees.

The online tool asks 40 questions and assigns employees a score that signifies their level of retirement readiness -- from "It's time to get going" to "You are on track."

Employees are asked about home equity, consumer debt and the percentage of their salary contributed to the Thrift Savings Plan, which is the government's version of a 401(k) investment account.

The test also asks about long-term care insurance and the amount of time spent calculating and budgeting for retirement.

Questions are not all financial; they also focus on social and health preparedness, for example:

• "To what extent do you add meaning to your life by participating in civic, religious, volunteer or other activities outside of work?"
• "About how often do you do each of the following to support a healthy lifestyle: Maintain a healthy weight, exercise regularly, eat a healthy diet, have regular physical check-ups including all recommended health tests and screenings, take medications and follow treatments as prescribed."

Mary Willett, a consultant aiding OPM in the design of the tool, told a group at OPM's federal workforce conference in Baltimore that social and health questions have to be answered before employees can calculate how much money they need for retirement.

Willett, who is working in association with the nonprofit International Foundation for Retirement Education, said employees should pay attention to life expectancy and their prospects for post-retirement activities in order to decide expenses.

"Everything is financial," Willett said. "Everything ties into how much money you need."

Scores on the online profile are calculated differently based on the time remaining until retirement. OPM's philosophy is that employees early in their careers should focus primarily on accumulating wealth, whereas employees nearer to retirement should pay attention to health and fulfillment as well.

Participants also will complete a worksheet, called the Ballpark Estimate, designed specifically for federal employees. The exercise will help calculate the amount of money that should be saved every year. The worksheet, which already exists for the general public, is being modified for federal employees in partnership with the Employee Benefit Research Institute, a nonprofit research group.

Agencies also will receive statistics, compiled from the completed profiles, on the retirement readiness of their employees as a group in order to tailor education efforts. OPM will provide a resource guide to help workers fill in their gaps.

Willett emphasized that the tool is still in development, and likely will go through changes before being launched publicly by the end of this year.

The tool was created in response to a 2004 law requiring the government to develop a new strategy for boosting retirement financial literacy among its employees. OPM submitted its plan to Congress last summer.

COMMENTS

• "Everything is financial," Willett said. "Everything ties into how much money you need." While this may be important for most, the real problems in retirement are psychological not financial. I have several friends that have retired and have strong financial income. They can afford to do whatever they want. Most of them have few friends that are available daily, they have no significant hobbies to use their time, and they do not give of themselves in small ways. As volunteers they are in general a disaster because they think they should run the programs and not do the minimal work necessary to achieve what someone else has decided. They end up trying to become part of their wives’ circle of friends, go fishing, play golf or ride bikes and workout a lot more than necessary because they have nothing to do. OPM needs to prepare most retirees for the psychological impact of retirement, as well as the financial side of the equation. Most of these retirees need to go to their church or the local hospital and help in minimal ways that they may not be used to. Aging people need drivers and companions, meals on wheels needs preparation people and drivers, halfway houses and shelters need help with meal preparation, delivery, furniture collection, etc. There are a lot of things retirees can do but most retirees do not think of them or do not picture themselves in these minimal positions. OPM needs to prepare the worker for retirement in ways that far exceed financial. By the time you retire the financial should have been well planned for at least two decades and should not be a major planning issue at retirement! The financial aspects of retirement should be addressed by OPM when they hire new employees -- not when they are ready to retire, because that is far too late! About to stop working for the government Posted March 16, 2006 7:31 AM
• Unveiled eh? I can't even find the veil . . . . much less the product. GovExec.com reader Posted March 11, 2006 8:38 AM
• How can a federal employee really plan for retirement using OPM or CPOL resources? I don't find the same data on ABC/EBIS (online) that I received in my CPOL retirement "guesstimation." The online resource says to talk to our personnel office advisor (who no longer exists) ... personnel says to use online resources. CPOL says they can't provide factual info as that comes from OPM. From an employee's perspective, trying to make decisions about DoD retirement is like playing roulette with an M16 in full automatic fire mode. Perhaps with NSPS everyone in OPM and CPOL/CPAc will disappear: they don't produce a decent product. GovExec.com reader Posted March 8, 2006 3:51 PM