News Release

Nearly Half of U.S. Servicemembers Confident About Retirement, 22 Percent Unaware of Thrift Savings Plan, New FINRA Foundation Survey Shows

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.

The 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 fact that over one-in-five servicemembers are unaware of the TSP, the retirement savings vehicle available to every servicemember, underscores the need to help them take advantage of every opportunity to save for a comfortable retirement."

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 civilians).

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 workers.

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).

View Survey Executive Summary.

The 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, A proud partner in the Department of Defense Financial Readiness Campaign, the Foundation also presents financial education forums at military installations worldwide.