TOPICS
TOPICS
Ready, Really?
Sometimes retirement isn't really retirement -- especially when you're a federal employee. A new survey reveals that 75 percent of civil servants plan to do paid work after they leave government.
A quarter of respondents said they plan to work five to nine years and 20 percent said they want to work 10 to 14 years after leaving the federal workforce. Another 26 percent said they "want to work as long as possible."
The Office of Personnel Management produced the survey at the request of Congress, which passed a 2004 law requiring OPM to step up retirement-focused financial education for federal employees. The crux of the survey is whether employees are financially and psychologically ready for retirement - have they saved and scrimped and invested as they should have?
Employees think so. Eighty percent said they were "on track or ahead of schedule in planning and saving for their retirement years." It's probably easy to feel that way when retirement means receiving a monthly government pension on top of a private-sector paycheck. Even employees in lower income brackets, making less than $50,000 a year, felt that way.
Because most workers expect to move into the private sector after retirement, it's not surprising that only 10 percent plan to retire from the government after the age of 65. The most common age bracket for expected retirement is 55 to 59.
Still, there's the second stage of retirement to save for -- the one where employees actually stop working.
OPM's survey shows that half of employees think they will need less than $4,000 a month, or $48,000 a year, to maintain the same lifestyle they live now. While employees think they're on the right track for savings, and may be when they initially leave government, that may not be the case for the long term
That point is supported by another survey finding: Only half of workers have given either "a great deal of thought" or "a lot of thought" to the actual amount of money they will receive from government pensions.
How much do your peers have tucked away in savings outside the Thrift Savings Plan and their set pensions? For late career employees earning more than $50,000, it's spread fairly evenly.
Fifteen percent have between $10,000 and $49,000 in savings. Thirteen percent have between $50,000 and $99,000. Another 11 percent have between $100,000 and $149,000, 16 percent have between $150,000 and $249,000, 15 percent have $250,000 to $500,000 and 12 percent have $500,000 or more.
OPM plans to use the survey results to formulate its financial literacy project. The education will only help those who realize they need it.
COMMENTS
- I just wanted to say thanks for this article. Most of us do what we can to prepare for retirement based on the income and outgo of the weekly budget, sometimes sacrificing the surety of the long term for the fear of the short term. But can we take a rigorous look at that goal until we actually crunch the numbers? Even with my long term plan on track, I had no comparison data with which to judge success or failure. My own feeling is that retirement is ultimately what you make of it; in essence it’s your expectations versus your costs and the balance that you must strike between those. Home ownership, energy costs, and quality of life issues are the building blocks on which each of us must build our Golden Years. Your article provided some of that data and even though the initial impression caused me some consternation, it prompted me to work the calculations and showed that my personal circumstances weren’t as dire as I originally thought. I must beg to differ on one point -- the fact that many of these articles mention continuing to work after retirement. If one wishes to do so then, by all means, find your muse and do so at your leisure. Still, I must say that is not what most of us think of as retirement, because if you must work then you haven’t retired. Such would merely be a change of vocation and the assurance of income from your previous employer. Regardless of my humble opinion, these articles have served their purpose of stimulating thought and, sometimes, even a bit of welcomed controversy. Tip off. Tip Posted September 7, 2006 9:17 AM
- The whole report is silly. Do they have their house paid off? Do they own their cars? Are their credit card balances zero? What is their social security payment? What is their government pension payment? What amount do they have in tax free investments? The survey needs to garther measures of wealth to compare with retirement income potential and not just look at savings. Savings is only one of many potential wealth measures that impact people and their ability to stop working for pay. You have to seperate the ability to retire and the start of an annuity. I can retire from the government and go to work elsewhere and never start an annuity for several years. A lot of people simply want to get out of the government as demonstrated by the 55 to 59 year old "retirement" rate. They are not retiring, they are getting out of the governement! taxpayer Posted August 29, 2006 6:34 AM
- TSP is in fact better than private savings and should be considered as a savings account that could be used for retirement. I am CSRS and have invested the yearly limits for TSP. I hope it is enough. Logistics Posted August 28, 2006 10:44 AM
