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Federal employees are more serious about saving for retirement than are employees in general – or so it seems looking at recent data.
The Federal Reserve Bank of New York says that, in 2021, 65% of eligible participants contributed to their employer’s defined contribution.
On the other hand, as of April, the Federal Retirement Thrift Investment Board said that 95.1% of FERS employees and 80.5% of active duty military contributed to their TSP.
Even more impressive was the fact that 85% of FERS employees and 79% of active duty military were contributing enough to get the full government match. CSRS employees were not included as there are so few of them left that it is statistically insignificant.
Why might this be true? Here are a couple of thoughts:
• On average, federal employees are more highly compensated than private sector employees. This may not be true if we compare occupation to occupation, but it is definitely true when we look at employees as a whole.
• Perhaps federal agencies to a better job of promoting the TSP than private sector employers do of promoting their 401(k)s.
In any event, federal employees seem to be taking the financial part of retirement more seriously than their private sector counterparts. Way to go!
Did You Know?
If your TSP account has a vested balance of $200 or more at the time of your separation from federal service, you can leave your money in the Thrift Savings Plan. Of course, you can also request a distribution of all or a portion of your account. If you choose to leave all, or some, of your money in the TSP, be sure to keep your contact information up-to-date so that the TSP can contact you as needed.
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