Close to 40% of survey participants report having private savings/investments to provide additional retirement income. Image: Indypendenz/Shutterstock.com
By: John GrobeEarlier this year we looked at the results of the Federal Retirement Thrift Investment Board’s 2023 financial wellness survey and some key findings.
The survey was of TSP participants, both employed and retired, and had a relatively anemic 13% overall response rate. What was interesting was that, among the TSP participants who were still employed, the participation rate climbed the closer the respondents were to retirement. It ranged from 6% for those under 35 to 20% for those 50 and older. I guess that the closer we are to retirement, the more it is on our mind.
Key findings included:
· Over half of survey participants (54%) are confident that they are on track to have saved enough for retirement. The remaining 46% are either not confident or are unsure.
· About half of survey participants have an estimate of how much they will need in retirement. Among those who are already retired, 2/3 of them have an estimate while, of those considered mid-career (age 35-49), only 1/3 have such an estimate.
· Close to 40% of survey participants report having private savings/investments (e.g., IRAs, taxable accounts, etc.) to provide additional retirement income.
· 35% of survey participants have a retirement plan or stock ownership from a prior employer.
· The key drivers of participant confidence in retirement are: 1) Having an idea of the amount of retirement savings needed, and 2) Practicing multiple money management practices (e.g., having a budget, meeting with a financial planner, etc.).
· More than 2/3 of the survey participants think of retirement income as a monthly or annual amount, as opposed to a total balance or a percentage of final income.
· Respondents indicated that they would like better retirement savings and income projection calculators than are currently offered. (NOTE: up until the TSP’s website update, they did have better calculators that dealt with these areas than they do today).
The survey went into significantly more depth and uncovered some notable trends.
For example, the percentage of survey respondents who were satisfied with their overall financial condition increased 2 percentage points from the previous survey done in 2020, 57% as compared to 55%. This compares favorably with the results of a Gallup survey of the “general public”. 45% of respondents in the Gallup survey rated their overall financial condition as good or excellent. This should be no surprise because of our generous federal retirement benefits, particularly our FERS retirement annuity.
The survey identified barriers to retirement savings, and we shouldn’t be surprised at the primary ones. The biggest barrier was the cost of shelter (rent or mortgage). Expenses for child care and elder care increased, as did personal debt.
When asked about which sources of information they use to help them make retirement planning decisions, participants listed retirement seminars, information provided by their agency and “themselves”. I’m not sure what “themselves” means. Hopefully the survey participants were educating themselves by reading quality sources.
Emergency preparedness was the topic of some survey questions. 84% of respondents indicated that they had an emergency fund, and 58% of that group would be able to handle a $5,000 emergency expenditure. This beats the results of a recent CNBC survey in which only 45% of respondents had an emergency fund and 70% of that group could cover at least $5,000.
54% of respondents feel confident that they are on track for retirement – less than in the 2020 survey. Perhaps those who responded in 2020 were feeling a little more flush due to the COVID related giveaways.
The FRTIB’s financial wellness surveys take place every two years. Look for a new survey in 2025 with results shared in early 2026.
John Grobe, President of Federal Career Experts, is an expert in the area of federal employee retirement and benefits. This expertise comes from his 26 year federal career in which he managed the retirement program in a 3,500-employee office of a large federal agency.
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See also,
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