Contract positions in the private sector for people under FERS who are retiring, or approaching retirement, are often an option for certain individuals, notably those working as air traffics controllers (ATCs) or law enforcement officers (LEOs.) When it comes time to consider this, you must first make the important decision: is it time to leave government work behind for good?
Before you sign any paperwork consider three factors that a good position should have to meet: those being the amount of money you’ll make, the stability of the job in question, and how strongly you want to do the job that is being offered.
The first determination you need to make before accepting any contract positions is eligibility. At your age, and with how much money and time you paid into your accounts, will the benefits from FERS, FEHB and your FEGLI be good enough to cover you during a period that you may not be able to work? Or will they cover any gaps in benefits coverage offered by the position you are offered?
ATCs and LEOs especially have time to contemplate these things, as they have a few more options that are even better than the already good FERS retirement program. Under FERS, both of these particular professions have the option to retire after 25 years of service, or at age 50 (if they’ve already worked for 20 years.) If you can start collecting benefits immediately upon retirement, the pressure is off, and you’ll be able to shop around for the best contract offers.
When it comes to the financial aspect, it should be easy to determine. Figure that with your retirement money from FERS now coming in, do the terms of the contract make sense for you? Is it enough money? Enough benefits? Things like health coverage, or even more annuity or 401(k) options are all excellent perks that a contract position could offer. This should all be weighed against continuing employment in a federal position, where you can continue to build the annuity in your FERS, getting that 5 percent match back from the government too. That’s like getting free money.
Next, you need to consider the stability of the contract position offered. How likely is it that you will stay employed in that job. Usually, working for the government is a stable move, but if you are looking elsewhere, what does the industry look like in the long term? You don’t want to take a contract somewhere, thinking you’re making the best move for yourself financially, and then have the contract end quicker than you thought, and now you’re out looking for work again. How big is the industry you’re working in, and how many other options for employment are there in that industry? These are all crucial factors to consider when you’re looking into a contract position.
The last thing you should consider is how much you want to do the job that the contract position is offering. It sometimes gets overlooked in favor of money or stability, but the desire to do the job should factor in just as much. If you like your federal job, then maybe looking for work in the private sector isn’t the best move for you. Adversely, if you are feeling burned out and want a change of pace, then maybe it is time to seek out a good contract position. Always consider your mental contentment when shopping around for a new position.
Before making any substantial life changes though, consider that if things were not to work out the way you wanted them to, would your retirement be enough for you to survive on. And if you do need additional income, then how difficult is it going to be to find additional employment in that industry. If you are not set up to survive on retirement alone, then perhaps continuing federal work (or even pushing off retirement entirely) is the way to go.