Retirement ‘Wave’ Is Just Offshore – And Has Been for Many Years

Doing the “wave” at a sports event—where fans stand up, raise their arms and go “woo” in sequence around the stadium—dates back about four decades, long enough to make some definitive statements about it.

First, they are hard to get started; those who try give up more often than not (exception that proves the rule: the student section at a college football game).

Second, when they do start, they peter out sooner or later—often sooner.

There have been warning of a federal employee retirement wave for most of that period, long enough to conclude that one always seems to be just offshore, and when it looks like one is building up, it peters out just as fast.

The federal retirement wave concept is built on the idea that Baby Boomers are nearing or already at eligibility and are about to leave the government in a mass. And in the process, take along institutional knowledge and create vacancies in more senior positions that the government doesn’t have the bench strength to overcome.

It was a main motivator behind creating the “phased retirement” arrangement a decade ago, for example, at a time when some were speaking not only of a retirement wave but of a “tsunami.” It is anticipated by younger employees who see opportunities to move up and by agencies who see opportunities to reshape the workforce to meet today’s needs.

Over that time there has been a stream of reports—from GAO, agency IG offices and elsewhere—citing the percentage of federal employees already eligible for retirement and the numbers that will reach eligibility in five or 10 years. Government-wide, the eligibility number is about 15 percent, with commonly about four or five percent more becoming eligible each year—in five years, 40 percent of the federal workforce will be eligible to retire!

In practice, though, about 4 or 5 percent of federal employees retire each year, meaning that the percentage of those eligible remains about level at around 15 percent. Somehow that always seems to get overlooked.

Look at the figures going back to 2005. Retirements excluding Postal Service employees (who had a number of early retirement offers in that time, skewing their numbers) ranged from a low of 46,100 in 2009 to a high of 74,100 in 2022. But in 14 of those 19 years, the number fell between just 60,000 and 70,000, with two others less than 2,000 below 60,000.

Coupled with the raw eligibility numbers is the view that some event, such as a change in a federal employment benefit, would cause a wave of eligible employees to put in their papers.

That argument arose again recently in the context of the Postal Service, following an IG report showing that nearly 20 percent of craft employees there are already retirement-eligible and another 18 percent will be eligible within five years.

At the same time, any postal employee who retires after this year (unless at least age 64 by year’s end) will be required to carry Medicare Part B—and pay those additional premiums–along with their employer-sponsored health insurance, which will switch from FEHB to the new Postal Service Health Benefit program starting in January. Given that about a quarter of all federal retirees, including postal retirees, do not enroll in Part B today, that seems like the conditions are right for a retirement wave starting this fall.

Will it? History suggests it won’t.

One example of a change in federal benefits policy occurred when unused sick leave became fully creditable, rather than only half creditable, toward a FERS annuity as of 2014. That at the time was being called the “no FERS employee retires in 2013” provision, in the expectation that people would put off retirement to capture that increase in their benefits.

However, there was little impact if any. Retirements fell by about 1,000 over 2012-2013 and then rose by only about 500 over 2013-2014—well within the typical year to year variation over the last two decades.

Another event typically cited as potentially triggering a wave is a Presidential election that changes the political party employees will be working under for the next four years. That argument is in circulation now, too.

The most notable change in retirements following a change in party control was a drop in retirements from just under 59,000 in 2008 to the 46,100 in 2009. Retirements dropped by less than 2,000 to about 62,400 over 2016-2017 and increased by about 4,000 to about 66,400 over 2020-2021.

Not much of a pattern there, especially when considering that the biggest of those changes, the drop in 2008-2009, likely was more tied to the stock marked decline of 2008 into early 2009, damaging the TSP accounts and other retirement savings of some who would have retired in 2009. As the markets recovered—and the same administration stayed in the White House—retirements rose to 52,700 in 2010 and to 64,200 in 2011.

Similarly, the bad year in stocks in 2022 likely was the major factor in the drop in retirements from the 74,100 in that year to the 58,300 in 2023.

Over the last two decades, just about every social and political event that one could imagine—and many that no one could have imagined—has occurred. The only thing that seems to have had much of an impact on federal retirement rates are bad years in stock markets—and even at that, the impact has not been substantial nor long-lasting.

That is, federal employees retire when they are ready to, financially and otherwise. It’s an individual decision, not a group decision. And that’s as it should be.

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See also,

Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025

The Best Ages for Federal Employees to Retire

Alternative Federal Retirement Options; With Chart

Primer: Early out, buyout, reduction in force (RIF)

Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process