By George Ray
During the benefits training sessions that I conduct, I typically ask Federal employees if they have set the month, day and year that they’re going to retire. Most simply shake their heads no, although there will usually be one or two in the class who are close to retiring and know the date that they will be leaving. They’re always happy to share this information, and usually can tell us how many years, months, days, and evens hours before they begin their retirement.
But invariably someone will challenge me by saying ‘George, I won’t be retiring for another 20 years (or some other number). Why should I set the date now?’
Yogi Berra once said, ‘We’re lost, but we’re making good time.’ When I provide that answer, I get smiles and knowing nods. The nods signify how lots of Feds feel about their retirement. They may not be quite sure where they’re going, but if they just keep doing what they’re doing, they feel they're bound to get there --- wherever ‘there’ is.
When I challenge the group to set a retirement date during the class, another objection (oops, I mean question) that pops up is ‘What if I need to change the date?’ My response -- go ahead and change it. In fact, it may change many times before you ever get there. Nothing says that once you choose a date that it can’t change. It won’t be chiseled in stone anywhere like an ancient tablet. In fact, I recommend thinking of the task as if you are a self-guided missile and retirement is a moving target. When the target moves, adjust your course so that you’ll still be able to reach it.
There are things that may cause your target to move that won’t be your doing. The economy and the stock market can have effects that may be beyond your control. And of course, Congress may make changes to your benefits. Other issues such as how much you save, whether you make job or career changes, and how much you’ll need may cause you to veer off course, but you’ll need to keep focusing your attention back on your target. You’ll likely need to make lots of course corrections before you get there.
After we get the the initial objections out of the way, we can now discuss the two issues that really prevent us from setting a retirement date (or picking our target). The first is a subjective issue (more emotional) and the second issue is objective (facts and figures).
Some are afraid to set the date because they just don’t want to think about it. It’s emotional. Retirement can be a scary thing for many people. Most of us think of ourselves as our jobs. When someone asks, ‘who are you?’, we typically respond with our title or job description. I’m the Director of Human Resources or the Chief of the Administrative Section. Or maybe you’re a doctor, lawyer, or plumber. What will you be after you retire? Many have a tough time coming to grips with no longer being their identity – at least the identity that they possessed for much of their life. Who are you now? Just a retired guy or gal who spends the day fishing or gardening? This can cause many to avoid thinking about retirement.
The remedy for the subjective issue is to do exactly the opposite. We need force ourselves to imagine in great detail what retirement will look like. What do you want to be doing? What will you enjoy? What will be rewarding or fulfilling to you after your job or career is over? Paint a vivid picture in your mind that includes the sights, sounds, smells, everything. And, prepare as the target approaches to step into your new identity – the one you’ve been creating for yourself.
Solving the identity issue (who will you be after you retire?) will take time and effort, but as it begins to resolve I find that most people define retirement as having the financial security that allows them to go where they want, and do want they want to do. So, we need to begin working on the second issue now, the facts and figures – before it’s too late. And that’s the real purpose of our benefits briefing (and my e-learning course too).
Not knowing what assets or income streams will be available, when they begin, and how much they’ll produce can also prevent you from setting a retirement date. How can you set a date when you don’t have the information you need to pick a reasonable target that you can reach? You’ll need to know how much monthly income your pension will produce. What’s the earliest date that you can begin receiving it? Are you saving enough in the Thrift Savings Plan and how much will your savings and earnings provide you at retirement? How much will you get from Social Security? How will your expenses change in retirement?
Picking a retirement date requires an understanding of your Federal benefits. You have a valuable package of employee benefits that can be the fuel to send your missile towards its target. Once you know how your benefits work and what they’ll be able to produce for you, you can begin to use this information to determine how you’ll reach your objective. Getting this information as soon as possible will help you to set your course early -- which may require much smaller course corrections throughout your life.
I urge you to learn as much as you can about your benefits, but getting this information won’t be as valuable to you if you don’t have a target. This is why you must pick your retirement date today. Don’t delay any further. It’s time to establish your target and set your course. You’ve come to the fork in the road. And as Yogi Berra says, “When you come to a fork in the road, take it.”