Layoffs, deferred resignations and unexpected retirements have left federal employees reeling over suddenly uncertain futures.
However, this gap presents an opportunity for financial advisors to provide support and guidance for the future.
Emmanuel Eliason, president and CEO of Eliason Wealth Management in Centennial, Colorado, said federal employees are the primary clients his practice serves. He said the recent layoffs arising from the reductions in force and voluntary retirements or resignations have sent shock waves through the community of federal employees.
“One of the concerns we have been hearing from federal employees is the lack of clarity about what to expect,” he said. “Federal employees are not getting enough assistance from their human resources department, partly because of the volume of requests and perhaps the ambiguity about the various programs being rolled out, especially in the beginning.”
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When retirement turns into a defensive strategy
Patrick Kalish, director of financial planning at Continuum Wealth Advisors in Saratoga Springs, New York, said he recently worked with a longtime client who faced the difficult decision to take early retirement from her federal position. Living in upstate New York, she was affected by new return-to-office mandates that required frequent travel to Washington, D.C., to maintain her role.
“This wasn’t the lifestyle she had envisioned for this stage of her career, and financially, it didn’t make sense to absorb the additional travel expenses so late in her working years,” he said. “At the same time, she was concerned about how early retirement might impact her lifestyle and whether her federal benefits would be affected if she continued working but was unexpectedly let go. It was an incredibly tough decision.”
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Kalish said he began by simply listening.
“Major life transitions like this require not only technical expertise but also a trusted guide to help navigate the emotional and financial concerns,” he said. “From there, we modeled multiple scenarios, weighing the implications of early retirement, so she could make an informed decision with confidence.”
A key change from past years, he said, is that heightened concerns over job security are now affecting long-term financial plans.
“Many federal employees are viewing early retirement less as a choice and more as a defensive strategy,” he said. “In this ever-changing environment, regular follow-ups are essential.”
Processing unexpected transitions
Elizabeth Zelinka Parsons, co-founder of retirement coaching firm Encoraco, said advisors should help clients recognize feelings of anger and grief.
“The end of a career — especially when we’re not the ones choosing it — can bring about feelings of anger, as well as grief related to the loss of professional identity, purpose, community and routine,” she said. “Processing your anger and grieving these losses are important for a positive transition.”
Parsons said clients who face early, unexpected retirement should “remember to enjoy the ride,” even if it wasn’t one they chose to take.
“Often, what first seems to be an unwanted circumstance quickly evolves into an exciting opportunity,” she said. “As you let go of what has been, remain open to what now might be possible. Enjoy the path as it unfolds and surround yourself with others who can take an optimistic view of the adventure ahead.”
Below are tangible steps advisors can take to guide clients who are federal employees. (Advisors can also share details with clients for an upcoming free virtual webinar on “Managing Your Finances in Uncertain Times: Resources for Federal Government Employees,” which the CFP Board will host from 7-9 p.m. EST Thursday, March 27.)
