Are you a candidate for the Botox Generation? Here’s the deal:
You have been in the work world for 25, 30, maybe even 40 years. You are sick of the commute. While you may like — even love — your job, you’ve had it. People keep telling you there are other things in life. Like travel, recreation, more time with family and friends. And sleeping late. Or…
Thanks to your time in government, you’ve made a lot of contacts. You are eligible to retire (with lifetime health insurance, with your employer paying more than 70 percent of the premium) and you’ve maybe got a worth-it’s- weight-in gold security clearance.
There is a government contractor out there who (you think) would love to have you, especially since you won’t go on his health plan and you won’t need (because they don’t offer) a pension plan. That happens a lot here in D.C.
The Washington area has one of the largest concentrations of federal employees in the nation. About 14 of every 100 feds is based here.
Because the D.C.-Maryland-Virginia-West Virginia metro area has the government foundation, the recession here has been mild compared to most other places. The furloughs and shutdowns — while a financial nightmare for some families — were a blip on the radar compared to the no-job, foreclosure reality in many other places. Federal contractors may have suffered more than feds because none of them were reimbursed for their shutdown days. Still, many are doing well.
Over the weekend, National Public Radio reported that something like 70 percent of the people retiring in the private sector have less than $30,000 in their company-based 401(k) plans. That’s about a third of the average TSP balance for federal employees.
It’s been reported that in the metro Washington area, the number of people who lost jobs during the recession are all back at work. But…
In many cases, it is much different (as in lower-paid) work than before. Many of the newly created jobs are in the retail, restaurant or fast-food business. Some older professionals have taken low-paying, do-you-want-fries-with- your-burger? jobs because their pensions and benefits don’t cut it. One expert has called it the Botox effect. People spending badly needed dollars on cosmetic surgery to look younger to potential employers. Go figure!
Many people retiring from their private-sector jobs won’t have a pension to rely on. Of those that have, or will have, almost none (like the CSRS and FERS retirement systems) are linked to inflation. Their benefit will never get any bigger regardless of how much living costs rise.
Lots of companies dropped defined-benefit retirement plans years ago — or, during the recession — in favor of Social Security and an employee-funded 401(k) defined contribution plan. There is talk in Congress of doing away with the FERS pension for future hires, but so far it has all been talk. Current employees would not be affected.
Federal workers and retirees haven’t had a good legislative year since 2009. Since then, it has been furloughs, shutdowns and three years of a pay freeze courtesy of Congress and the White House. There have been lots of threats to the federal benefits package, but they have been just that. Threats. The same old circa-1980s threats that keep on coming. Some of them could happen next year. Or not.
Recent threats to feds, bad publicity from government and endless stories about over-paid bureaucrats have made many people question their career choices. As a friend says: “Question but don’t quit.”
To paraphrase the late great comedian, Henny Youngman, when somebody asks you, “How’s your job?” (actually, he said wife), the correct response is, “Compared to what?”