Most of the federal workers calling financial planner Stephen Zelcer have an observation and a question.
They're worried Congress will kick off a shutdown sequel in January — and they want to know what, financially speaking, they should do to protect themselves.
"All the negotiations that we just saw were just a temporary Band-Aid and have to be readdressed again in 2014," said Zelcer, a federal employee benefits specialist with Rockville-based Wealth Strategies Group. "As a result of that, a lot of people are second-guessing the security of their job altogether."
He's far from the only financial planner fielding anxious questions. The appeal of federal work, besides good benefits, has long been its stability — but not so much in the last few years, with pay freezes, sequester furloughs and, most recently, the 16-day partial government shutdown.
"There's a lot of uncertainty out there," said Ed Zurndorfer, a Commerce Department retiree whose clientele at EZ Accounting & Financial Services in Silver Spring is about half current and former federal workers. "There's a lot of fear and concern."
Dan McGrath, president of the Maryland Federation of National Active and Retired Federal Employees Association chapters, said the anxiety isn't limited to the workers.
McGrath, a Treasury Department retiree, said he cut back on spending as the shutdown loomed because he wanted to prepare for a delay in retirement payments if the government hit the ceiling on its borrowing authority.
Seeing Congress delay a more permanent budget doesn't inspire him to spend what he saved during that stretch. "I'm keeping my reserve, and I'm still a little on the cutback side," said McGrath, who lives on the Eastern Shore.
Building up emergency savings is exactly what Zurndorfer advises his clients. Make sure you have enough liquid savings — cash or a money-market account — to cover your expenses for at least six months to a year, he says. If you don't, start saving more now.
That's not furlough insurance, he said, as much as simple good planning.
But people often don't want to hear that advice, he said, because it involves poring over monthly expenses and figuring out what to cut.
Zurndorfer said he feels like a doctor telling patients they have to lose weight: The knee-jerk reaction is always, "Oh, I can't do that," he said, even though there's usually ways clients can cut out or reduce discretionary spending — such as packing lunch or buying cheaper coffee.
Zelcer, who agrees that rainy-day savings are critical, also suggests finding other sources of income. He's advising federal workers to start building side businesses so they'll have something to lean on if need be.
"To say it in language that people have heard before, don't put your eggs in one basket," he said. "Many people, not just federal employees, but many people, they have all their income sources, all their income eggs, in one basket."
Changing that could require some coordination with the basket. Though federal workers are, in general, allowed to moonlight, they might have to get approval from their agency first, and some restrictions apply. The Internal Revenue Service, for instance, reminded its employees during the furlough that a wide variety of tax work, from legal services to tax-return preparation, is off-limits.
Zelcer said income diversification doesn't have to be as complex as a full-blown business — some opt to get a rental property, he said.
He took his own advice. He's got his job with Wealth Strategies Group, and he runs Beacon Education, which provides financial and retirement workshops for federal employees.
Of course, since Beacon is a government contractor, he's feeling the pinch of tighter spending. So he's thinking of expanding into the private sector.
"Even though government has reopened, business is not as usual," Zelcer said. "There are still budget restrictions."
Anna Sergunina, a certified financial planner who specializes in federal employees for Odenton-based MainStreet Financial Planning, said workers should also look carefully at their benefits options for next year to make sure they're maximizing them. Money set aside in a flexible spending account and spent on qualified expenses, for instance, isn't taxed by the federal government.
The shutdown-related questions she received from federal workers generally boiled down to how to pay the bills and what to do about stock market investments. One client emailed right before the shutdown to ask whether to sell it all and sit on the cash.
"The downside of that is, when do you know it's a good time to get back into the market?" said Sergunina. She recommended against selling.
Some workers aren't asking about money so much as what to do about their jobs — stay or go?
Zelcer said some of his clients are fed up and planning to leave, either through "early out" retirement deals, by jumping to a private-sector company or starting their own businesses.
Zurndorfer expects federal agencies to make more early retirement offers, but he warns clients to think carefully before accepting and locking in permanently lower retirement pay.
And don't count on the old method of getting a new job to supplement, he said. In his opinion, stubbornly high unemployment makes that a bad bet.
He suggests federal employees simply stay put. The security might not be what it once was, but he thinks there's still more than in the private sector.
"Don't think things will get better if you leave federal employment," Zurndorfer said.