While the survey found that service members are more realistic about retirement than civilians, FINRA said it also found that retirement education is lacking for many service members. The survey found that 22% of service members did not know about the federal government’s Thrift Savings Plan.
“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, in the news release. “The fact that over one in five service members are unaware of the TSP, the retirement savings vehicle available to every service member, underscores the need to help them take advantage of every opportunity to save for a comfortable retirement.”
While 25% of respondents said saving for retirement is their most pressing financial issue, the poll found that immediate financial problems were of far greater concern to service members, with 29% citing paying down debt and 18% citing making ends meet as their most pressing financial issue.
The results show that service members are more realistic than civilians about the amount of money they will need to retire comfortably. According to a 2008 EBRI survey, 26% of civilian workers believe they will need less than $250,000 for retirement, while only 10% of service members believe that this would be a sufficient amount.
Some 32% of surveyed service members believe they will need to save $1 million or more, compared with only 18% of the civilian workforce. Even junior enlisted service members were far less likely to believe that $250,000 is enough for retirement, with only 9% of these service members reporting that $250,000 was sufficient.
Also, service members are considerably less likely than civilians to rely on guessing to determine their retirement savings needs (33% verse 47% for civilians).
Nearly half (47%) of service members report feeling either very confident or somewhat confident about their ability to retire comfortably.
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% verse 47% for civilians); nearly twice as likely to ask an independent financial professional (32% verse 17% for civilians); four times more likely to have filled out a retirement-needs worksheet or form (21% verse 5% for civilians); and nearly six times more likely to have used an online calculator (40% verse 7% for civilians).
Enlisted personnel are also more likely to use an online calculator or fill out a worksheet or form than civilian workers, the survey found.
The TSP was the leading vehicle used by service members saving for retirement, with 68% of such service members reporting contributing to the TSP. The likelihood of contributing to the TSP was steady across demographic groups, including rank. One-quarter of service members reported that a briefing given by military financial educators encouraged them to participate in the TSP.
The Military Financial Confidence Survey (MFCS) was conducted by the FINRA Foundation in cooperation with the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates.