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By: John GrobeMany of us base our plans on the “fact” that we will work until we reach a certain age – but research from the Employee Benefits Research Institute (EBRI) found that we may not be able to work until that age, throwing our plans into disarray. Their 2024 survey shows that more than half (58%) of respondents retired earlier than they expected, while only 4% retired later than they had planned on.
Of those who left early, the three primary reasons (adding up to 82% of the respondents) were:
• A health issue that made them unable to continue to work (38%). There’s nothing that we can do about this, and it impacts our quality of life as well.
• Downsizing (23%). We in the federal government are much less likely to suffer this fate than those in the private sector, and we also have procedures that help us with any needed transition.
• Because they could (21%). What a fortunate group! I bet they had been saving for the future and, when the future appeared earlier than they thought it would, were ready to take advantage of the opportunity that presented itself.
If you’re in the early or middle portion of your career, try to position yourself to be in the third group.
How many respondents felt that they had saved enough for retirement? 33%. What about those who said that they hadn’t saved enough? 50%. I guess this means that 17% had saved more than enough – good for them!
Federal Retirees Have the Advantage When it Comes to Longevity Risk
When we invest in the Thrift Savings Plan or other investment vehicles, we realize that we must accept some level of risk. The two most common risks are: Market risk, and Inflation risk.
Lately I’ve read about another risk – longevity risk: the possibility that one will outlive their savings and income, potentially leading to poverty or financial strain on loved ones due to increased life expectancies. Well, Federal retirees have an advantage over most other folks when it comes to dealing with longevity risk.
John Grobe, President of Federal Career Experts, is an expert in the area of federal employee retirement and benefits. This expertise comes from his 26 year federal career in which he managed the retirement program in a 3,500-employee office of a large federal agency.
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