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Retirement tsunami: On or off?
Tuesday - 5/8/2012, 2:00am EDT
It's a bird!
It's a plane!
No, darn it. It's a bird...
Sorry, for the 13th year in a row, times are tough for folks trying to predict when the long-awaited surge in federal retirements is going to begin, known as the retirement tsunami.
The government is graying, and thousands of baby boomers are becoming retirement-eligible each month. Yet they continue to hang on in droves.
Nobody is quite sure. There has to be a surge someday — unless people work until they drop — but when will it start? When it does get rolling, will it produce a brain drain as many fear? Or will the government (and taxpayers) benefit as tens of thousands of unemployed or underemployed college grads become feds, giving Uncle Sam what many say is a badly-needed transfusion? Also, helping the economy by being able to move out of their parents' spare room, and stocking their own apartment or house with appliances, TVs and other consumer goods.
Earlier this year it looked as if the retirement tidal wave was approaching, if not already here. Data obtained by the Federal Times showed that retirement applications jumped slightly over 24 percent in 2011.
OPM, which does a good job of projecting retirement claims, estimated 21,000 claims would be submitted in January. In fact 21,479 were submitted. The estimate for February was 5,600 and 6,615 were actually received. It expected 5,000 in March but got 7,090. Happy days for tsunami predictors. Until April.
Last month, OPM estimated it would get 8,000 new retirement applications but instead got 6,616.
The good news is that OPM appears to be reducing its backlog and cutting the time it takes to process claims and get new (and some not-so-new) retirees their full annuity check. Typically retirees are supposed to get about 80 percent of their estimated annuity and to get the full amount (with retroactive benefits) in a few months. But some retirees say they got as little as 40 percent of their estimated annuity and some have been waiting a year or more.
OPM is predicting 7,000 to 8,400 retirements each month for the rest of the year. And it expects 21,000 (the same as its projecting for January, 2012) to retire next January. To run the numbers for yourself, click here.
Experts urge anyone planning to retire to have a cash reserve that will carry them through (bills, mortgage, food, stuff like that) until they get their full annuity.
The TSP's new Roth IRA option was launched yesterday. It was the subject of yesterday's For Your Benefit radio show yesterday. Will it be enough to persuade long-time workers to stay in government? Experts Bob Leins and John Elliott talked it yesterday. Also Federal News Radio's Jack Moore wrote an excellent summary of the new benefit which you can read by clicking here.
If the tsunami stalls, it will help with OPM's backlog of claims.
But if the surge that began last year, and the first three months of this year returns, anything could happen. Tomorrow on our Your Turn radio show (10 a.m.) experts from the Federal Times will analyze the numbers and talk about the backlog. Afterwards we'll hear from the people who run the Federal Long Term Care program about how its doing and how it works.
NEARLY USELESS FACTOID
By Jack Moore
Gassy emissions from prehistoric dinosaurs may have been enough to warm the Earth, new research indicates. LiveScience reports that researchers think as much as 520 million tons of greenhouse gas methane (created by the sauropods' digestion) was produced each year.
MORE FROM FEDERAL NEWS RADIO
TSP rolls out Roth option
Federal employees can enroll in the Thrift Savings Plan's Roth option starting today - at least some of them can. While the Federal Retirement Thrift Investment Board has been preparing for the new program for two years, many federal employees will actually have to wait to enroll in the new program.
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Congress returns from a week-long recess today set to vote on a plan to stave off automatic cuts to the Pentagon's budget due to sequestration. The plan includes cuts to food aid, health care and social services like Meals on Wheels. The House will also vote on a spending bill funding NASA and the Justice Department.
Finalists for Service to America Medals announced
The Partnership for Public Service announced today the 33 Samuel J. Heyman Service to America Medal Finalists. The awards recognize outstanding employees in the federal workforce. As part of Public Service Recognition Week, the finalists will be recognized on Wednesday, May 9, in Washington, D.C.