We’re more than half-way through 2021, and it’s time for a quick retirement check-in.
Remember the dreaded retirement tsunami? The one human capital experts and others have been predicting probably since around the time I was born?
We’ve never quite seen it happen, although there have certainly been peaks and valleys.
2021 could — depending, of course — amount to one of those peaks. Or maybe just a small bump.
In the first six months of this year, 55,371 employees have opted for federal retirement, according to data from the Office of Personnel Management. That’s more than the 52,916 employees who retired during the first six months of 2020.
Based on our own surveys of employees and conversations with federal financial planners, those at retirement age held out last year for a few reasons.
It didn’t make sense to retire during the peak of the pandemic, when travel, visiting family or large crowds just weren’t a real possibility, employees told us. Working from home, without the long commutes or stuffy offices, certainly helped, or at least made work-weary feds stick with it a little longer.
Money is always a top consideration for most feds planning for retirement, and anyone who looked at their savings last March or April probably got a little spooked. Major life changes could wait.
2020 was a low point for many things, including federal retirements — at least compared to trends from the last decade.
Now more than a year later, things are obviously different. Mask and travel restrictions are gone; Americans are traveling again. Capacity limitations at federal buildings are gone too, and agencies are planning for more employees to eventually return to the office.
A deeper look at the numbers shows how, in a sense, federal retirements this year are tied to the trajectory of the pandemic.
January is always a popular time to retire. But with the pandemic still raging and vaccines not yet widely available, fewer feds retired this past January and February compared to those months in 2020, when we were all blissfully unaware of what was to come.
But significantly more feds opted for retirement during the months of March and April — 3,000 more employees this March compared to the previous year and nearly as many the following month.
Things are settling down now, with federal retirements in May outpacing those from the previous year by 1,000 and around 700 in June.
Retirement expert Tammy Flanagan recently told my colleague Mike Causey feds could flock toward the door as travel restrictions lifted and people who delayed in 2020 decided this was year. The data from the first six months of 2021 certainly suggests the possibility.
These statistics are also tough to ignore. In fiscal 2017, the Government Accountability Office estimated 31.6% of the federal workforce would be eligible to retire in the next five years.
That’s … soon, as in next year.
At the same time, I’ve heard agency HR experts acknowledge they could keep some of their retirement-eligible employees around for a few years longer if they stick with some of those pandemic flexibilities that have become so popular.
It’s perhaps too early to tell, but we know the Biden administration is pushing agencies to make telework and remote work options a priority. Agencies are finalizing their reentry plans now, and part of those plans will likely include new telework and remote work policies. Big organizations, such as the Department of Homeland Security, intelligence community and others expect telework to stick. Schedules will likely loosen up, with work and specific responsibilities driving when employees come into the office as opposed to a specific telework limitations.
In our own surveys, many of you suggested you’d stick it out for a little longer if telework was still an option post-pandemic. If it’s not, some of you implied you might pull the retirement trigger.
So what does it all mean?
It’s tough to forecast a trend for the year, but let’s revisit it again later this fall. That’s when the reentry planning will be done, perhaps with more feds adjusting to new schedules and policies. Next January will be another tell, since it’s the most popular month to retire.
Of course, there are plenty of other factors that could upend the forecasting and predictions.
Weather forecasts are rarely spot on, and this one is no different.
Nearly Useless Factoid
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