A well-crafted three-leg stool provides comfort, strength and stability — provided all three legs are sturdy and help distribute their weight. But when one leg gets shorter, what you have is a very dangerous and uncomfortable rocking chair. Without a back.

The dominant federal retirement plan — FERS — was designed to provide three streams of post-work income:

1. A civil service benefit that is less costly and less generous than the older CSRS program,
2. Social Security and
3. Income from the Thrift Savings Plan. To encourage investment the government will make a pre-tax contribution of up to 5 percent.

When the TSP was set up, it was felt that it would provide roughly one-third of the retirement income of investors. During the 1990s when the stock market was booming and returns of 20-plus percent were routine, many felt that TSP investments might provide one-half of your income in retirement. Not any more.

Since January, the I-fund (international stocks) has lost 15.70 percent. The S-fund (small cap stocks) is down 14.85 percent and the C-fund (invested in the top 500 U.S. corporations) is down 7.03 percent. This may represent a great buying opportunity — if you are in government for the long haul. Or not.

The up-and-down, scary performance of the stock markets over the past few years has derailed retirement schedules of many long-time feds. Yet wars, natural disasters in Japan, economic problems in Greece and Spain (not to mention here), and the Arab spring events have all conspired to make Wall Street — which is easily spooked anyhow — downright crazy. Unemployment won’t go down and the markets won’t go up.

Feds with law enforcement or intelligence backgrounds and homeland security skills (and that all-important Top Secret clearance) find there are fewer places in the private sector to go when they hit mandatory retirement age.

White-collar civil servants are in the midst of a two-year pay freeze. Retirees haven’t had a cost-of-living adjustment for two years. Although they are likely to get a COLA in January (the exact amount won’t be announced until the middle of this month), it is too late for people to retire and get in on the 2012 adjustment.

The number of retirement-eligible feds (people with more than enough time in government) may be at an all-time high. Congress keeps threatening to make federal employment less enjoyable and lucrative.

But the bottom line is that the “retirement tsunami” first predicted in 1999 still hasn’t hit. And even if agencies open the door by offering $25,000 buyouts, there is no indication that hordes of people will flee the government for retirement or unemployment. Retirements have held steady (in the 60,000 range) year after year, and the quit rate is actually down. That’s probably a reflection of the miserable nonfederal job market.

The mood in Congress seems to be “The beatings will continue until morale improves.” Yet the rotten state of the economy — for which Congress deserves a lot of credit — seems to be keeping feds on the job even though politicians wish many of them would go away.

For whatever reason, feds seem to be holding on. It may be the stock market impact on their TSP retirement accounts, lack of jobs on the outside or just a wait-and- see thing.

So, are you hanging on and, if so, what are you waiting for? Would a buyout convince you to leave, or are you waiting until your TSP balance goes up? Drop me an e-mail at mcausey@federal newsradio.com

NEARLY USELESS FACTOID

By Jack Moore

It turns out controlling your bladder may also help control other impulses.

A study conducted by Mirjam Tuk, a visiting professor at INSEAD, an international graduate business school, found that unconscious efforts at self-control — as experienced when holding it in — may help control other urges, such as spending money.

MIKE’S TAKE
Just how manly is Mike Causey? Find out in this week’s Mike’s Take.

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