In a new survey hosted by Federal News Radio and Silver Light Financial, 557 federal employees revealed discouraging evidence concerning their retirement outlook.
When asked how they would rate their overall understanding of federal retirement benefits, less than 33 percent felt they were “well” informed, and only 5.95 percent felt “fully informed.”
When asked what it would take to entice them to attend retirement benefits training, over 74 percent stated they would need no incentive at all, they just want the training.
Ralph Waldo Emerson is credited with saying, “Life is a journey, not a destination.” This has always been one of my favorite axioms. (Even if Emerson didn’t really say it). For the purpose of shedding light on retirement issues that are distressing the federal workforce, I will place my own spin on both “journey” and “destination.”
Insight by ProPricer: During this webinar James Woolsey, the president of the Defense Acquisition University, Frank Kelley, the vice president of the Defense Acquisition University and Michelle Currier, the professor of contract management at the Defense Acquisition University, will discuss the future of DoD contracting, pricing and acquisition. In addition, Michael Weaver, the professor of contract management at ProPricer will provide an industry perspective.
When attempting to maneuver toward federal retirement (aka “the destination”), feds are impeded by an inability to know how to navigate through their “journey.” What is the journey? It is the informed and considered financial retirement preparations feds should be making throughout their working careers.
It’s like feds have been offered the keys to their very own luxury (retirement) vehicle and informed this vehicle can take them to their desired (retirement) destination. The catch — feds haven’t been taught how to drive…and it’s a stick!
This survey revealed feds desperately seek and require retirement benefits and retirement planning instruction. It boggles the mind why there is so much spent on benefits and so little put into edification. A little driver’s education would likely allow feds to seize a modicum of intelligent control over their retirement journey.
Additional survey results:
Conclusions: If feds had a better understanding of their retirement income benefits and retirement planning, they would:
A few assumptions:
It seems obvious that the federal workforce is in desperate need for consistent and structured retirement benefits/retirement preparation training. Many feds are introduced to the subjects when they are hired, then not again until they reach an age that puts them within five years of their MRA.
Anyone else thinking about the proverbial “barn door” and “missing horses?”
All federal employees do have access to the OPM.gov website. It offers significant amounts of information designed to direct and inform about various aspects of retirement planning and federal retirement benefits. Another source of information is HR departments. Often they have literature and online training options. However, both options have a rather “hands off” approach. They rely, a great deal, on employees ploughing through the mountains of information, on their own, to uncover the information they need.
Professional, consistent, reoccurring and supportive retirement training is generally missing until the end of a feds career. Knowledge (like many other things) can be positively influenced by the power of compounding. The longer we are exposed to a subject, the more we understand.
I recently met a fed who embodies the overall statement this survey seems to make.
Richard (not his real name) is a federal employee who has been considering retirement. He would like to retire now (at age 60 with 30 years of service).
Fortunately, he first requested a free (no obligation) Federal Retirement Readiness Review (FRRR), the results painted a clear if not desired picture.
Richard thought he was well informed and had a handle on his retirement benefits and plan. What we learned:
Want to stay up to date with the latest federal news and information from all your devices? Download the revamped Federal News Network app
In all, much of what Richard thought he knew was incorrect. Richard learned that he was one of the many feds that had become victim to, not knowing what they didn’t know.
Good News — During Richard’s FRRR, he developed a new found comprehension about his long-term retirement outlook. Richard has decided to postpone his retirement two-to-four years. At that time, he feels he will be able to step down, better prepared and with more clarity.
In the days when the federal retirement income plan was only CSRS, perhaps extensive retirement training wasn’t as imperative. Still, a structured training plan, on how to save and prepare for retirement, would have been nice.
However, the majority of the CSRS employees’ retirement income, would be satisfied by their outstanding CSRS Federal pension. Arguably, not as much training would be needed.
But, there are no new CSRS employees. FERS employees have much greater personal responsibility to their retirement preparations. FERS employees have:
Therein lies the rub, that our survey has seemed to reveal. FERS employees have several additional parts to their retirement planning. Yet, no greater (benefits and/or planning) awareness, than their CSRS predecessors.
In my opinion the journey, leading up to federal retirement destination, is now more important than ever. It carries crucial consequences for potentially hundreds of thousands of federal employees.
It seems there just must be a decisive change in the philosophy of training feds about their retirement benefits and retirement planning measures. Without it, countless lifelong feds will likely, yet needlessly, financially fail during retirement.
Isn’t it time to instruct feds how they can confidently accept the personal culpability of their retirement journey?
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.