One Sunday afternoon, a little boy walked into his family living room where his father was watching a football game. Out of the blue the little boy asks a rather odd question for a 5-year-old, “Daddy, what’s the difference between ignorance and apathy?”
Without missing a beat or taking his attention away from the game for even an instant, the father replied, “Jimmy, I don’t know and I don’t care.”
Federal employee, how much (or how little) do you know about your retirement income benefits? Let me ask it another way, how much do you care to know?
Federal employees have one of the most generous retirement plans in existence today. However, even abundance has its challenges. In the case of the federal retirement income, stable of benefits, the struggles lie in education, management, implementation and UNDERSTANDING.
It has been suggested, when it comes to federal retirement income benefits, most feds:
Don’t know what they have or how to utilize (manage) it to obtain their desired results.
Are disinterested in the subject.
Don’t seriously seek answers until they are very near retirement age. This is akin to closing the barn door after the horses have all bolted.
I am fortunate to have access to the ears and wisdom of some extremely intelligent federal human resources professionals. Inevitably, when we meet, we fall into discussions about the effectiveness of federal retirement income benefits training (Yes, we are an exciting bunch!). This leads to discussions about the (TRUE) level of understanding, by the average federal professional.
My take is that most feds would like to learn about their retirement benefits. But, they are grossly overwhelmed by the subject. They don’t know where to look or even what questions to ask.
The counter to my stance is, the knowledge is readily available, the majority of feds just don’t, or won’t, avail themselves of it.
So, is the lack of knowledge due to ignorance or apathy?
I stand firmly on the side of ignorance (I don’t know if I will ever say that again in my lifetime!).
Note: In this case, ignorance is simply a lack of knowledge. The individual is not apathetic, nor do they suffer from the inability to learn. They are merely uneducated on this specific subject.
Many of my HR friends are emphatic about their efforts to continuously train and educate feds. But, their desired audiences are generally disinterested at best. Others feel that the majority of their federal cohorts have availed themselves adequately and are well trained on the subject.
Yet, most of the feds I meet are equally insistent that they were interested in learning, but, didn’t know where to find the desired education within the federal realm.
In the final analysis there can be only one statistically accurate answer. But, which one is it? MOST feds are:
Well trained and educated on the subject of their retirement income benefits. It just so happens the ones I meet are exceptional in their lack of knowledge.
Offered education and choose to ignore the available training.
Trained and don’t understand the material.
Not well trained about their retirement benefits, don’t know where to find reliable information or how important their management of these benefits will be to their ultimate retirement lifestyle.
I have a new and disheartened federal friend. We will call him, “Who-knew Lou.”
Lou is a fed that has less than a year before he would like to retire. Like so many, Lou was tragically unfamiliar with the different pieces associated with his federal retirement. But, he was emphatic that he didn’t want to work more than another year.
Together we completed Lou’s federal “Retirement Readiness Review.” His results were sobering!
Lou, 59, has worked more than 35 years in federal service. He is a GS-12 (CSRS) and has been putting 5 percent of his income into his TSP for the past 10 years.
His pension wouldn’t be enough income for Lou to live on at this time. To meet his needs, it would need to be approximately 25 percent higher than it is today.
His TSP value is $130,000.
Lou will need to work for an additional seven years to have the income he and his family will require.
Lou’s three biggest setbacks where:
He only really started adding to his TSP in the last 10 years and even then he didn’t fully utilize it. (Poor utilization)
His TSP account values were invested so conservatively that he only saw about a 2.5 percent per year rate of return for the past several years. (Poor management)
Lou hadn’t planned for retirement as much as he had been waiting for retirement. (Poor Planning)
After the review he was understandably upset and confused. He said that he hadn’t been taught how to save for, plan or manage his retirement. When I showed him that there were federal (and outside) resources that could provide feds with valuable retirement knowledge, Lou looked me square in the eye and remarked, “Who knew?”
As a federal professional, how does the federal retirement training stack up in your opinion?
Take the following TSP Survey to share how you feel about and how much you understand federal retirement. We will publish the results in a future article.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through LPL Financial, member FINRA/SIPC.