Go or No Go

Earlier this year, the MetLife Mature Market Institute and the Scripps Gerontology Center at Miami University produced a report called Best-Case Strategies for a Flexible Retirement. Here are some of its key findings:

• More than a quarter of survey respondents reported retiring earlier or later than planned due to unexpected situations.
• A little over half of the respondents felt somewhat confident they would be financially comfortable if they or their spouse or partner lived to age 85 or beyond. Only 20 percent felt very confident.
• Among those who had put off their retirement plans, the average delay was three and a half years. For most, the reasons were financial.

The study concluded the best time to retire is when the lure of retirement is stronger than the pull of work. But it also found that employees said other factors heavily influenced their decisions to go or stay.

Many of the survey respondents reported staying at work longer than they had expected because of the rewards and benefits of continuing their careers. The study put these people in a category called "Holding On."

Another group also worked longer than they had planned, but for financial reasons. They were characterized as "On Hold" -- mentally prepared for retirement, but not financially secure enough to leave the working world.

A third group of people were identified as "Held Up." They were not happy in their jobs, but continued to work because they had to. Many in this category were hit by the stock market plunge in 2008 and believed they couldn't move forward with retirement plans until their investments recovered. I wonder if some people in this group might have been better off with a little more diversity in their investment choices, so that they wouldn't have to wait on a full recovery.

Another group of respondents was characterized as "Held Hostage." They believed their employers needed them to continue working because of their expertise and experience. Employees in this group weren't necessarily unhappy, but felt a sense of duty. I have met plenty of individuals like this who work in federal agencies.

The study also identified a group of employees who felt "Shoved" into early retirement. This has happened to many federal employees over the years due to downsizing and government reorganization. They've had to recalculate and adjust their plans unexpectedly. Also included in this group are those people who have experienced a sudden disability.

Another group felt "Pushed" into retirement. In my experience, these are the employees who say things like, "this place isn't what it used to be" and "the people we have around here now just don't understand what it takes to accomplish our mission." They are, to put it bluntly, burned out.

Several retirees in the study were characterized as being "Nudged" into retirement. In the federal context, these are the kind of people who have accepted voluntary early retirement offers or separation incentives. Some of them might have worked longer, but the sense that their agencies wanted them to move on made them finalize their retirement decisions a little earlier than they had planned.

On the positive side, other respondents characterized themselves as "Lured" into retirement. The appeal of moving on was so strong they felt confident they could make the leap sooner than they had planned. Members of this group had to make careful calculations, but those with confidence in their planning described moving on as a happy, though unexpected, event.

Some survey respondents felt "Tugged" into retirement based on the need to help care for someone close to them. These people must be careful since this type of unexpected retirement can come at a heavy financial and psychological cost.

The last group identified in the study felt "Yanked" into retirement, mainly due to the relocation of a spouse or partner. To complicate the job loss and financial implications of an unexpected retirement, this group also had to deal with lifestyle changes brought on by the relocation.

Combination of Factors

For many of us, a combination of factors influences how we feel about whether we can or should retire. Here are the main reasons survey respondents gave for retiring later than planned:

• Make up for financial losses
• Ride out the current economic situation
• Enjoy working
• Need employer-sponsored health benefits
• Were asked to continue working
• Change in retirement system
• Funds not available

Here were the main reasons identified in the study for retiring sooner than planned:

• Health considerations
• Layoffs/downsizing
• Job stress
• Attractive incentive package
• Eligible for Social Security
• Eligible for company pension
• Caregiving responsibilities
• Sufficient funds

The good news is that some of the more negative factors are less of a concern for federal employees than for many people in the private sector. Many feds are eligible to retire as early as 55. Most civil servants can maintain their federal health benefits into retirement, with the government contributing to the cost of the premiums. And there hasn't been a significant change to federal retirement plans since 1987. Of course, as a congressional super-committee looks at ways to slash the federal budget, that could change soon.

Correction: The original version of this column said the Scripps Gerontology Center was at the University of Miami. It is at Miami University. The article has been updated to correct the error.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Mondays at 10 a.m. EDT on federalnewsradio.com, or on WFED AM 1500 in the Washington-metro area.