OPM unveils retirement education prototype

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.