Government not yet brain-dead… but be patient!
The predicted "tsunami" of federal retirees may or may not come. Regardless, if you're planning to retire, you should still take steps to ensure financial security...
Planning on retiring within the next decade? If so, be careful you aren’t trapped by the “tsunami” which could leave you on reduced retirement rations for a long time. Or maybe not. Remember…
In the late 1990s, somebody looked at the rising age of the federal workforce and reached a startling, dark conclusion: that within a few short years, most experienced, intelligent workers would have retired. The government would be left without its institutional memory. Anyone with half a brain would head for the shuffleboard courts of Florida, leaving Uncle Sam in a lurch.
And leaving retirement offices government-wide jammed with paperwork which, until processed, could mean reduced and delayed annuity checks for new retirees.
It was a no-brainer.
Second conclusion: Once that tidal wave (it grew into a tsunami because that sounds scarier) hit, the government would be left with young, untrained, uncaring dullards. NASA would be little more than Mo’s Towing Service. Newly-minted CIA trackers and analysts would, in fact, have trouble finding their way to and from Langley each day. A dumbed-down government was coming, sooner rather than later, they said.
Warning about the tsunami became a cottage industry. Media loved it. The public bought it. It gave politicians something to rail about. Just one problem…
New conclusion: “The Great Tsunami” of 1999 never made it. Ditto for the “Human Tidal Wave” of 2001. People, again, did NOT retire in droves in 2002, 3, 4, 5, etc. Same last year. And the year before. Are we seeing a pattern here?
Tsunami-watchers perked up in October when the Office of Personnel Management received 10,155 new retirement claims. That was nearly 4,000 more than the 6,350 received the month before, and the most since 12,000 people put in their papers. So could this be the precursor to the long-dreaded “Retirement Tsunami?”
Maybe yes. Maybe no.
Some experts (in this town everybody is an expert) now believe that because of the getting-better-but-still-lousy job market, lots of feds now plan to work until they drop. Others point out that people typically don’t leave a good job when the economy is weak and private job market is bad.
What the up-this-month-down-the-next-month retirement numbers do tell us is that people who are planning to retire should have a cash stash. Money they can draw on to pay for food, mortgages and living expenses until their first full annuity check arrives. There has been a backlog for decades and just when OPM seems to be making inroads (and it has for the most part) along comes another wave of surprise retirements.
This is how Federal News Radio’s Mike O’Connell first reported the numbers earlier this week:
“Even though OPM was able to process 8,785 claims during October, it ended the month with 14,137 unprocessed claims in its inventory, which is up from the 12,767 it had at the end of September. This reverses a 3-month trend in which OPM had finished the month with a smaller inventory than it had in the previous month. The inventory of 14,137 unprocessed claims represents a reduction of more than 9,000 claims from the backlog’s peak of 23,554 in February.
OPM has been tracking and reporting on progress toward cutting the retirement backlog since January 2012. At the time, the backlog topped out at more than 60,000 claims and OPM was the subject of congressional criticism and federal employee frustration.
In May of this year, OPM started reporting the percentage of claims it processed within 60 days. In the six months so far reported, the percentage has climbed from 76.6 percent in May, around 77 percent in June and July, to 78.5 percent in August, to 78.8 percent in September, and now 83.2 percent in October.”
Spot checks with some recent retirees confirm that the turnaround time between the first interim payment and the full annuity payment is shortening. Even so, make sure you have a supply of emergency cash (easier said than done), and keep watching the horizon for signs of that tsunami. The experts have to be right someday. Don’t they?
NEARLY USELESS FACTOID
In 1940, a 65-year-old was expected to live an additional 14 years. Today, it is about 20 years.
Source: Office of Social Security
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Young and old feds alike struggle with financial choices
Young feds are too passive; older feds too hasty with their retirement savings, according to Greg Long, executive director of the Federal Retirement Thrift Investment Board. Federal News Radio’s Emily Kopp reports on his comments at a meeting of the Financial Literacy and Education Commission.
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Mike Causey
Mike Causey is senior correspondent for Federal News Network and writes his daily Federal Report column on federal employees’ pay, benefits and retirement.
Follow @mcauseyWFED
