Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Cliff Divers, Worker Bees and Retirees in Training


I recently received an email with this unusual question: “Should I stop/reduce contributing to my Thrift Savings Plan because I am 65?”

The emailer referred to a recent column in the Wall Street Journal by Carolyn T. Geer, entitled “How to Get to Retirement? Practice!,” noting that in it an expert had offered the opinion that contributions to 401(k) plans are the “least important” piece of the retirement puzzle for people in their 60s.

That expert, Christine Fahlund, vice president and senior financial planner at T. Rowe Price Group, describes three kinds of retirees:

  • Cliff Divers, who go cold turkey from full time employment to full-time retirement as soon as they’re eligible. These are the workers who have been planning their retirement for 35 years and are ready to enjoy their life after retirement.
  • Worker Bees, who stay in their jobs longer than most people and delay retirement. These employees typically work more 35 to 40 years and sometimes have trouble visualizing life after retirement.
  • Retirees in Training, who continue working after they are eligible to retire, but begin their retirement prior to actually retiring. In the federal sector, this type of person would be among the first in line to try out the new phased retirement option.

Make Your Choice

Fahlund says the type of retiree you choose to be can have a big impact on how much money you will have. Cliff divers, for example, need to manage on the money they were able to save during their careers, and plan for a long period of retirement.

The good news for federal employees is that they will have a lifelong retirement benefit under both the Civil Service Retirement System and the Federal Employees Retirement System that includes cost-of-living adjustments. Because CSRS was designed to be a single-benefit retirement plan, I would guess most cliff divers in the federal sector are covered under CSRS.

For FERS employees, the basic retirement benefit is about half the value of the CSRS benefit, but it is designed to be complemented by Social Security and Thrift Savings Plan investments. FERS employees must focus more intently on how long they need to make their TSP savings last. I predict there will be more worker bees under FERS than under CSRS.

Frahlund says that for the third group of people, retirees in training, contributions to retirement savings in their 60s are the least important aspect of assembling a nest egg. Since there’s less time for returns to compound, she says would-be retirees should consider contributing only enough to qualify for employer matching contributions. If they have extra money, they can use it to pay off a mortgage or make home improvements -- in other words, to get their financial house in order and start enjoying the life they envision in retirement.

The Value of Savings

This is where I disagree. I think that employees should maximize their retirement savings in their last years of employment. Here are the reasons I suggest not cutting back on TSP contributions:

  • Saving in the traditional TSP lowers your taxable income by as much as $23,000 ($17,500 elective deferral limit plus $5,500 in catch-up contributions). The last years of employment are typically the highest-earning years (and highest tax bracket) of your career.
  • Saving in the TSP provides additional money available to spend during your retirement years. This money can be used to make payments on a recreational vehicle or pay off that mortgage after retirement.
  • Saving in the TSP gets you used to living on less, since you’re putting away a portion of your earnings that you would not be currently spending.

I know someone who has saved $227,000 since 2006 by contributing the maximum to the TSP as a FERS employee working in a second, post-government, career. I recommend continuing to save as much of your salary as you can while you are still employed, because I’ve never heard a retiree complain about having too much money in retirement.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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