Will inefficient training postpone retirement for some long-term feds?

A recent survey conducted by Federal News Radio and me suggests that the federal retirement training system appears to be, at best, dreadfully ineffective.

The current training system doesn’t provide timely, suitable, consistent or adequate guidance that feds are desperate to acquire. Unprepared feds are left to fend for themselves in making wise planning decisions that will significantly influence their retirement.

Randy Silvey, president of Silverlight Financial
Randy Silvey, president of Silverlight Financial

Yet most feds don’t have the slightest idea where to begin. They are not only unfamiliar with comprehensive retirement planning, their Thrift Savings Plan (TSP) selections are akin to the proverbial dart and board.

Granted, some feds are “naturals.” They focus on their retirement early in life, manage their assets to fit their personal risk tolerances and remain vigilant planners throughout their federal employment. But they are in the minority. The majority of feds are lost and confused about their retirement income benefits until it is too late for them to make any meaningful or positive impact.

I recently penned a column “Who’s to blame when feds don’t feel prepared for retirement?” that concentrated on the results of a survey of 563 feds. It focused on their knowledge, management and planning of the federal retirement income benefit packages. At the end of the column I asked you, the readers, to provide me with possible solutions. I was amazed by the quantity of thoughtful responses!

The following is a sampling of the suggestions you sent in to help fix this damaged training system:

  • “Have required/mandatory training in place for retirement preparation. … The key is not giving an option; this is important enough that every individual should be required to obtain training and be knowledgeable on the subject.”
  • “Require refresher training … a test or quiz to demonstrate whether the person truly understands the information provided.”
  • It needs to be fed to individuals, not where they have to go out and seek the information.
  • “OPM should make it mandatory that the human resources departments of agencies provide this ‘all hands’ retirement training at least once a year.”
  • “One-on-one reviews so you can insert your own personal nuances into the equation.”

For good measure, the following is a sampling of problems with the current system as described by some of those that responded:

  • “I am a fed with 21 years in the government. In all my years working for the federal government, I have never had an opportunity to attend retirement benefits training. Whenever those training session are offered, they are for feds that are within 5 years of retirement eligibility (only).”
  • “What we discovered … most of the critical stuff we should have learned early in our careers. I know that most of us, when we are younger, truly don’t get concerned about retirement until late in our careers.”
  • “When it was offered, it was frowned upon, like people were using it as a way to get out of the office. … It should be REQUIRED, not frowned upon.”
  • “I went to a retirement seminar several years ago … and I found that quite useful. I haven’t seen the training being offered again since.”
  • “It seems ludicrous that the government only trains folks that are at the end of their careers on retirement. It’s like parents planning for college when their kids are already in high school. You missed boat.”

The apparent effects of sticking with a dysfunctional system of this nature and magnitude may have far-reaching and long-lasting consequences, such as feds:

  • Unable to enjoy the fruitful retirements they had hoped for.
  • Finding out late in their careers they are not financially prepared for retirement.
  • Living with family members, later in life, due only to inadequate income.
  • Working later in life than would otherwise be necessary.
  • Experiencing low workplace morale due to postponed retirement.

Based on the answers you provided, here are some ideas to improve training:

  • Retirement benefits training as soon as a fed is hired (required).
  • Annual retirement benefits training for all feds (required).
  • Basic money management training (required).
  • Basic retirement preparation training (required).
  • Identical training in all parts of the country. It shouldn’t matter where a fed works or lives, the training needs to be indistinguishable throughout federal service.
  • Provide an hour of annual one-on-one meetings by qualified advisers to any fed interested.
  • Enhanced (5 years from retirement) retirement preparation meetings.
  • Improved “hand holding” (preparation services) in the last year before retirement, to ensure that all retiring feds are fully informed and prepared to begin their post-federal lives.
  • Feds take more personal responsibility to understand and manipulate their retirement benefits. It could certainly be postulated that with the implementation of improved retirement income training procedures, federal spending, production and workforce morale would all improve.

Within the next couple of years, hundreds of thousands of feds will be able to cash in on their full federal retirement benefits. How many will be forced to continue working, due to financial considerations, that a more vigorous training program could have helped avert? How many of them will direct their ire at their respective employers for not providing better training? What impact could this discontentment have on the federal workforce?

The argument could be made that due to the present form of federal retirement training:

  • Higher paid (long-term) feds will stay in their current position rather than retire.
  • Federal workforce job satisfaction could decline even more.
  • Overall production could suffer.
  • Many of the younger, eager and highly motivated feds won’t have the opportunity to advance.

So, we should ask, is the federal workforce fast approaching a perfect storm? A moment when the federal government will reluctantly be paying higher wages for lower production to a workforce with a historically weakened morale? Even more frightening, will members of that workforce that retire unprepared and unequipped cause an additional drain on this already weakened economy?

Has is already begun?

The good news: There is already a lot information concerning federal retirement posted on TSP.gov and OPM.gov.

The bad news: When many feds read the material they are so unfamiliar with the jargon and concepts they ultimately get frustrated. That frustration then leads to procrastination and indecisiveness. Procrastination and indecisiveness then serve as shovels to assist in digging their retirement hole.

While we all strive for change in this area, we understand that change takes time. So while we wait, my office has agreed to donate up to eight free one-hour phone sessions each week to federal employees interested in receiving a Federal Retirement Readiness Review (FRRR). It can’t replace all the years of training and attention identified above. But it is a valuable tool. It is designed to help feds gauge their preparedness to enter retirement at the time and in the manner they desire.

Randy Silvey is the published author of “You FIRST, Federal Employees Retirement Guide,” one of the bestselling books of its kind on Amazon and Kindle. He has 14 years’ experience guiding feds to pursue a youthful and wealthy retirement. Randy can be reached at 816-524-515 or www.silverlightfinancial.com.

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.

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