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The latest TSP participant survey sheds light on some aspects of investing and participant behavior, including on the issue of FERS investors who don’t take advantage of the full government matching contributions by not investing at least 5 percent of their salary.

The most common reason again was “currently cannot afford to save that much,” cited by 43 percent—although that was down from 47 percent last year and 53 percent in 2017. Not surprisingly, that was related to income level—60 percent of those with annual salaries below $60,000 cited that reason, compared with 40 precent among those above that level.


Inertia—“never changed from when originally enrolled”—was the second most commonly cited, by 31 percent, while other reasons included using other investments outside the TSP, lack of knowledge about the matching formula, and the difficulty of the process to change investment levels.

Other findings include that while 78 percent of current employees and those who have separated but have not yet started taking withdrawals say they are likely to take them in the form of recurring payments, in practice only 54 percent do so. For one form of such withdrawals, those based on life expectancy, the numbers are 58 and 15 percent. For the purchase of an annuity, they are 35 and 4 percent.

Of those who say they are likely to move their TSP balance to an IRA or other retirement plan. The most commonly cited reasons were “better/more investment choices,” to consolidate retirement savings, the potential for higher returns elsewhere, and greater flexibility of withdrawal options.

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2022 Federal Employees Handbook