Justine Dupont surfs a big wave at Nazare, Portugal in 2019.

Justine Dupont surfs a big wave at Nazare, Portugal in 2019. Stefan Matzke - sampics/Getty

That Time the Federal Retirement Wave Never Happened

Almost 25 years after the first dire warnings, we’re still waiting on the tsunami. 

The latest in an intermittent series looking back at groundbreaking, newsmaking, appalling and amusing events in government history.

There’s a subculture of surfers who are interested only in massive waves. They travel the globe in pursuit of huge “swells” and “barrels” at places with names like Jaws, Killers and Dungeons—all for the thrill of riding a gigantic wall of water and (ideally) coming out unscathed. 

But sometimes, the big waves just don’t appear as predicted. The same is sometimes true of metaphorical waves, too, such as the massive swell of federal employee retirements that has been predicted to be just around the corner for almost a quarter-century now. But that hasn’t shaken the faith of doomsayers, who say a big wave with the power to radically shake up federal recruitment and retention efforts is lurking out there and could arrive at any moment. 

This all started around the turn of the millennium, at the same time that for some reason it became fashionable to refer to the living, breathing individuals who serve the country as “human capital.” In May 2000, Stephen Barr reported in the first of a series of articles in the Washington Post that “the federal government is facing a people crisis. Within five years, about 30 percent of the government's 1.6 million full-time employees will be eligible to retire.”

Personnel experts told Barr that a “human-capital time-bomb” was ticking and a “tremendous exodus of institutional experience and leadership” was imminent. That did not materialize.

In a May 2003 article in Government Executive, Brian Friel undertook to explain why the exodus hadn’t happened, and probably wouldn’t. The numbers showing high levels of impending turnover, he wrote, generally included both people eligible for regular retirement and those who could exercise the option to retire early. But few federal workers take advantage of retiring early, because it results in a hefty reduction in retirement benefits. Also, the projections failed to take into account that federal employees typically wait for several years after eligibility to actually retire. 

Actual retirement rates governmentwide were expected to be around 2% to 4% per year. That, said Jeffrey Neal, then-personnel chief at the Defense Logistics Agency, “is not a crisis.”

None of this deterred the Cassandras. In fact, in May 2006, then-Office of Personnel Management Director Linda Springer upped the ante. “When we look ahead and talk to our actuaries,” she said in a speech at the National Press Club in Washington, “they say over the next decade, 60% of federal workers will be eligible to retire. That’s a fact. It’s not a projection. It’s not looking into a crystal ball. That is a fact.” As a result, said Springer, not just a wave, but a “retirement tsunami” was around the corner. “We’re not being overly dramatic,” she insisted. 

They were being overly dramatic. 

The issue is that prognosticators would have been better off looking into a crystal ball and estimating how many people would actually retire. “Here is the problem,” Neal wrote in 2019. “Most projections look at the number of federal workers eligible for retirement today, then look five years or so down the road and count the number of folks eligible for retirement. That would be fine if the workforce were static, but it is not. Many of the people who are eligible to retire do just that—they leave. So the number of people eligible to retire never reaches the massive percentage that is projected.”

That helps explain why there hasn’t been a tsunami or even a wave yet. So what has been going on? People have been retiring from government at a fairly steady and slowly increasing pace. Nearly 1 million federal employees have taken voluntary retirement since 2005, according to OPM data, without a discernible wave:

Voluntary Retirements

  • 2005: 47,155
  • 2006: 47,103
  • 2007: 51,017
  • 2008: 49,053
  • 2009: 38,983
  • 2010: 45,758
  • 2011: 54,900
  • 2012: 59,812
  • 2013: 58,295
  • 2014: 61,017
  • 2015: 58,294
  • 2016: 58,671
  • 2017: 58,009
  • 2018: 60,257
  • 2019: 60,513
  • 2020: 56,873
  • 2021: 62,079
  • 2022: 67,180

The number of annual retirements has gradually increased over time, with some ups and downs. There’s a distinct dip in 2008-2009 amidst the global financial crisis. And the last two years have shown an upward trend, presumably as an effect of the pandemic. But whether this will continue is an open question. Overall, it looks more like a slow-moving current than a massive wave.

Some, like Neal, argue that an external shock to the system could still trigger a tsunami. But if over the past 23 years a massive terrorist attack, two overseas wars, a financial crisis, a pandemic that took millions of lives and the Jan. 6 insurrection didn’t trigger a wave, then it’s hard to imagine what would. 

Still, the warnings of impending doom continue. “Given the number of candles that keep increasing on Uncle Sam’s workforce birthday cake, it’s got to happen sooner or later,” Federal News Network’s Mike Causey wrote in 2021. “It statistically has to happen. Even Nostradamus made a few bad calls.”

Whether or not a retirement tsunami is imminent, it remains a very useful tool for spurring action on a wide variety of fronts, from hiring reform to pay raises. Earlier this year, for example, William Shackelford, national president of the National Active and Retired Federal Employees Association, said a large federal pay increase was necessary in 2024 to “counteract a tightening labor market and increasing private-sector pay, rising costs of living and an impending federal retirement wave.”

Even if a rogue retirement wave never materializes, the outlook for federal agencies is hardly smooth sailing. 

First, agencies will experience retirements at different rates. So just because there isn’t a governmentwide retirement wave doesn’t mean that there couldn't be mini-waves that crash into individual federal organizations. 

Second, regardless of the retirement rate, the federal government clearly has an aging workforce. More than 325,000 federal employees are 60 or older, wrote Fedsmith’s Ralph Smith last year. There were only 162,000 in that demographic when Springer made her dire prediction in 2006. 

A manageable retirement wave might actually have the positive effect of opening up opportunities for younger federal employees to move up the ranks. In a recent Reddit post, a federal employee noted that their government organization had announced an upcoming celebration of employees with up to 55 years of service.

“Holy crap, please retire,” the poster wrote. “I want your job.”