Survey Shows Half Have Not Calculated Retirement Needs

Twenty-seven percent of federal employees reported savings of $150,000 or more in a "retirement readiness" survey sponsored by the Office of Personnel Management.

The survey divided federal employees into two salary groups (those earning more than $50,000 annually and those earning less) and into three career stages (early, mid and late).

Not surprisingly, the data showed that accumulated savings increased as pay increased and that federal employees who identified themselves as mid-career and late-career workers had saved the most.

The OPM survey also found that fewer than half of the respondents had calculated how much they need to save for a comfortable retirement and that almost four in 10 said they were not confident in their ability to make investment decisions.

The survey grew out of a request by Congress for more information on retirement planning by federal employees and possible steps to expand retirement education programs. The request reflected a broader concern that most Americans do not save enough for retirement, may be failing to diversify their portfolios and may need help in calculating how much to save for retirement.

Twenty-four percent of the respondents said they had saved between $50,000 and $149,999, and 28 percent said they had between $5,000 and $49,999 in savings.

A substantial percentage -- 15 percent -- reported savings of less than $5,000, and 6 percent of the federal employees said they had no savings.

The OPM asked employees how much money they had saved "that is not earmarked for routine bills and expenses." The question covered personal savings, college savings and contributions to the Thrift Savings Plan, a 401(k)-type program, OPM officials said.

Officials at the TSP, which began operating 19 years ago, have already stepped up their educational efforts. A year ago, the TSP introduced "life-cycle funds," which allow participants to diversify their retirement savings by selecting an investment mix that most closely meshes with the time they expect to begin drawing down their savings.

Doris Hausser , senior policy adviser at the OPM, cautioned against trying to draw any conclusions from the survey data because the government operates two primary retirement programs with different benefits.

Employees in the Civil Service Retirement System receive a traditional pension closely tied to length of service and income, and do not get matching TSP contributions from the government. Employees in the newer Federal Employees Retirement System receive a TSP match and Social Security benefits, and can qualify for an annuity often described as less generous than the CSRS pension.

"It's tricky, we're still a mix of CSRS and FERS," Hausser said. "It's a delicate challenge for an employer -- what is the right kind of information to provide, ultimately recognizing that there are a lot of personal decisions and that people have to be responsible in making those decisions."