Will There Be an End-of-Year Retirement Exodus?

Recently, I’ve written several columns on timing your retirement that were inspired by the many questions I receive about choosing not only the best retirement date, but overall retirement readiness and eligibility.

Here are the ones published over the past couple of months:

• Weighing the Retirement Tradeoffs
• Best Dates to Retire 2021
• Best Dates to Retire Q & A
• Rethinking Retirement During a Pandemic
• The Case for Waiting to Retire

These columns have prompted some of you to provide additional insight regarding retirement planning in 2020. For example, a recent law enforcement retiree from the Department of Homeland Security wrote the following:

I read your article about the smaller number of people retiring in 2020 compared to 2019 and I wanted to give you a little bit of insight. Due to COVID-19 and the work from home situation, tons of people have banked a boatload of leave and were going to retire at the end of last year or early this year. Instead, they are holding on and waiting to cash it all in at the end of 2020. If leave caps aren’t waived, there will likely be a flood of retirements. We will likely know in a few weeks, as that is the time agencies remind employees about end of leave year use.

 Further, those like me who were hired under the 1994 crime bill are all coming of age and are eligible for retirement. Beyond that, the Thrift Savings Plan has recovered from the downturn earlier in the year, so in the end I would imagine that governmentwide retirement will be off the charts at the end of the year. 

The first delay will be at the agency. They will look at paperwork but can’t really process it to send to the Office of Personnel Management until you actually leave the office. I was told that they only forward to OPM from the agency after final leave is paid. [Note: This is true. See more about retirement processing in my August 2019 columns, 3, 2, 1… Retire! and What Happens to Your Retirement Paperwork.] So OPM will get them all at once in late January. I was also told that my agency’s retirement folks are working from home and only go to get FedEx once a week. My agency retirement specialist gave me the thumbs up when I told her I was going at the end of August instead of December because they are already overwhelmed.

Are you ready to retire at the end of 2020? There’s been a lot of upheaval in our country this year: a pandemic, increased civil unrest, a contentious presidential election. Retirement is a major life event which could add to the stress you may already be feeling.

My father lost his job at age 62 when the company he worked for went out of business. He was not quite ready to retire and when it was forced on him this way, it was a much harder transition. On the other hand, my husband seemed to start planning for retirement the day he started working. He was a good saver and did what he could to maximize his benefits.

If you’re thinking about leaving at the end of 2020, be sure that you have:

• Computed your retirement net income (after taxes and insurance withholdings) and made sure it’s adequate.
• Considered what makes you happy. Do you get a lot of satisfaction from your work and your co-workers? If so, be sure to plan a retirement life that will allow you to meet people and stay engaged socially.

Then you’ll know whether you’re ready to join what may be a retirement wave. But as my correspondent above notes, depending on where you work and how many people decide to retire, you may be waiting awhile for all of your benefits to be sorted out.