Washington, DC - While nearly half of U.S. servicemembers
are confident about their ability to retire comfortably, 22
percent are unaware of the Thrift Savings Plan (TSP) - the
federal government's equivalent of a 401(k) plan - according to
a new survey funded by the Financial Industry Regulatory
Authority (FINRA) Investor Education Foundation.
Military Financial Confidence Survey (MFCS) - conducted by
the FINRA Foundation in cooperation with the
Employee Benefit Research Institute' (EBRI) and
Mathew Greenwald & Associates - shows that 47 percent of
servicemembers report feeling either very confident or somewhat
confident about their ability to retire comfortably.
"This survey highlights the incredible importance of giving
our men and women in uniform the educational tools they need to
prepare for their retirements," said John Gannon, President of
the FINRA Foundation. "The facts that over one-in-five
servicemembers are unaware of the TSP, the retirement savings
vehicle available to every servicemember, underscore the need to
help them take advantage of every opportunity to save for a
While 25 percent of servicemembers say that saving for
retirement is their most pressing financial issue, the MFCS
found that immediate financial problems were of far greater
concern to servicemembers, with 29 percent saying paying down
debt and 18 percent saying making ends meet was their most
pressing financial issue.
The MFCS results also show that servicemembers are more
realistic than civilians about the amount of money they will
need to retire comfortably. According to a
2008 EBRI survey, 26 percent of civilian workers believe
they will need less than $250,000 for retirement, while only 10
percent of servicemembers believe that this would be a
sufficient amount. Nearly one-third of servicemembers (32
percent) believe they will need to save $1 million or more,
compared to only 18 percent of the civilian workforce.
Strikingly, even junior enlisted servicemembers (E-1 to E-6)
were far less likely to believe that $250,000 is a sufficient
amount needed for retirement, with only 9 percent of these
servicemembers reporting that $250,000 was sufficient.
Overall, servicemembers are significantly better positioned
to determine their retirement savings needs than their civilian
counterparts. Servicemembers are considerably less likely than
civilian workers to rely on guessing to determine their
retirement savings needs (33 percent vs. 47 percent for
Financial preparedness was especially evident among military
officers, who are less than half as likely to rely on guessing
to determine their savings needs (18 percent vs. 47 percent for
civilians), nearly twice as likely to ask an independent
financial professional (32 percent vs. 17 percent for
civilians), four times more likely to have filled out a
retirement-needs worksheet or form (21 percent vs. 5 percent for
civilians) and nearly six-times more likely to have used an
online calculator (40 percent vs. 7 percent for civilians).
Enlisted personnel are also more likely to use an online
calculator or fill out a worksheet or form than civilian
The FINRA Foundation's MFCS suggests that doing a retirement
needs calculation may lead to having a more realistic savings
goal, since the amount of retirement savings believed necessary
was higher among those who had performed a retirement savings
calculation than among those who had not.
Servicemembers are also less likely to subscribe to attitudes
that may falsely increase retirement confidence. For example,
civilians are nearly twice as likely (45 percent) as
servicemembers (25 percent) to strongly agree that they can rely
on lifestyle cuts in retirement to make up for a shortfall in
savings. Additionally, only 28 percent of servicemembers agree
that they may not live long enough to use all of their
retirement savings, compared to 44 percent of civilian workers.
The TSP was the leading savings vehicle used by
servicemembers saving for retirement, with 68 percent of such
servicemembers reporting contributing to the TSP. The likelihood
of contributing to the TSP was steady across demographic groups,
including rank. The MFCS also highlighted the importance of
financial education. One-quarter of servicemembers (26 percent)
reported that a briefing given by military financial educators
encouraged them to participate in the TSP.
The Foundation's MCFS also revealed that 60 percent of
servicemembers intended to stay in the military for 20 years or
more. Servicemembers are eligible for retirement pay after 20
years of service. Perhaps as a result, servicemembers were 5
times more likely than civilians to say they planned to retire
before age 55 (20 percent for military vs. 4 percent for
civilians). Civilian workers were nearly four times more likely
to say they intended to retire at age 70 or older (19 percent
civilian vs. 5 percent military).
Finally, while servicemembers and civilians were equally
likely to report having saved money for retirement, service
members were more likely to have non-retirement savings (61
percent military vs. 52 percent civilian).
Survey Executive Summary
FINRA Investor Education Foundation is the largest
foundation in the United States dedicated to investor education.
Its mission is to provide investors with high-quality, easily
accessible information and tools to better understand the
markets and the basic principles of saving and investing. In
2006, the Foundation launched a multifaceted program to expand
the saving and investing knowledge of military servicemembers
and their spouses, including a free, unbiased resource,
SaveAndInvest.org. A proud partner in the Department of
Defense Financial Readiness Campaign, the Foundation also
presents financial education forums at military installations
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.