Federal Employee Retirement Trends
In the past, most people in the workforce dreamt about retirement and rejoiced when they finally reached that day. While many still dream about retirement today, it seems that this will always remain a dream rather than a reality. In times of poor economy and an increasing cost of living, so many employees are opting to work for as long as possible. There are very few federal occupations that require you to retire at a certain age, so fortunately for federal employees, most are able to work for as long as they wish. This fact shatters the misconception that federal employees retire at an early age. In fact 15% of federal employees are eligible for retirement but are still working. Numbers released by OPM show that in the past decade, retirement age has increased from 59.5 to 61.7 years old; however, this age average includes federal occupations with a mandatory retirement age, which means the numbers are much lower than they should be.
In fact, the average age of federal employees has increased, as well. There are twice as many federal employees over the age of 60 than there are under the age of 30. Only 17% of federal employees are below 35 years old, yet over 28% are above age 55. Despite earlier predictions of a “retirement wave,” these statistics tell another story. For the most part, around 60,000 people retire from federal occupations annually.
There have been several times over the past few years when, due to federal employee policy changes, many have predicted that there would be a surge in retirement. The first was in 2014 when FERS began giving full credit of unused sick days towards early retirement, as opposed to their previous half credit. The second was to begin in 2015 when phased retirement was introduced, which allowed employees eligible for retirement to work half time for half annuity. However, statistics this year show that only 100 employees have completed this retirement option and there are only three times that in the current retirement phasing process. The last was just last year in 2016, which marked the end of three consecutive years of a federal salary freeze. Neither 2014, 2015 or 2016 saw these expected surges in retirement.
These statistics show how many federal employees need to continue working to make ends meet in the economy we live in. When employees continue working it means that they can keep earning money now and keep contributing money towards their retirement fund. However, not everyone keeps working for the same reason. Some federal employees don’t retire as soon as they’re eligible because they feel that they can do their job better than a new employee or because they simply enjoy their job.
Eventually, however, everyone needs to retire. Again, everyone retires for different reasons. While some retire because of old age, others retire because of illness (either their own or a family member’s), some have retirement to-do lists that they would like to start ticking off and others have just been working for so long that their salary and annuity benefit are so close together that it doesn’t make a difference if they work or not.
For those not yet qualified for retirement, don’t worry- you aren’t forced to retire as soon as you’re eligible. However, if you do wish to continue working for longer, make sure that you’re just as dedicated and hardworking as you were when you were first hired so you aren’t replaced. That being said, if you’re already retirement age, but are still working, know that you’ll have to retire at some point. It’s best to prepare your finances and personal plans ahead of time so when you are finally ready to embrace retirement, you can do so comfortably.