Retirement & Financial Planning Report

Compounding growth and upward trends show the benefit of staying the course. Image: Montri Nipitvittaya/Shutterstock.com

A study by the Employee Benefit Research Institute underscores the importance of consistent investments in retirement savings plans, finding that those who participated in such plans consistently over 2010-2019 on average had substantially higher account balances.

While the study focused on 401(k) accounts, they are similar to the TSP in their tax advantages and investment limits, although with differences in areas such as employer matching contributions.

It found for example that 33 percent of consistent savers have account balances above $200,000 compared with 11 percent overall, that 20 percent have balances between $100,000 and $200,000 compared with 9 percent, and 18 percent had balances between $50,000 and $100,000 compared with 11 percent.

“While markets can be volatile, the compounding growth and upward trends we observed during the nine-year study period shows the benefit of staying the course,” it said.

In addition to the impact of newly invested money, it said, “consistent participants generally exceeded the growth rate for all participants” reflected in the database of 11 million accounts.

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