Careful Retirement Investing

An alternative explanation, the report said, "may be the high level of participant inertia with a disproportionate share of members not making active investment decisions and instead settling for the default portfolio -- 100 percent G Fund."

The data also suggested that the TSP has a large number of smaller-than-average account balances with a greater concentration of the assets invested in government securities and bonds, the TSP said.

Education about investing, the survey found, is a key to ensuring that federal employees make appropriate choices based on their age and the time they have available to save for retirement.

Employees who had received financial planning advice or reviewed information on the TSP Web site tended to put a greater share of their money into stocks and create more risky asset portfolios, according to the survey.

The survey turned up some troublesome indicators, such as employees who may be underestimating how much income they will need in retirement. More than a quarter either believed they need less than what financial planners generally recommend or could not estimate their retirement needs.

Of the 3,467 TSP members who completed the survey by the Federal Retirement Thrift Investment Board and Watson Wyatt Worldwide, 418 said they were not making contributions from their paychecks. Of the non-contributors, 21 percent said they don't have enough money and 20 percent said they were saving for retirement but not through the TSP.

TSP officials plan a follow-up this year with a larger sample size and said some results, such as those based on age group, should be taken as preliminary.

While government employees are cautious -- in some cases maybe too cautious -- in their investing, the survey shows they are good savers compared to the private sector. Respondents said they save on average 10.5 percent of their income, a contribution rate more than 3 percentage points higher than those seen in typical private-sector plans.

Nearly 11 percent of military personnel and other members of the uniformed services said they contributed 20 percent of their pay or more to the TSP, compared with 3.3 percent of workers in the Federal Employee Retirement System and 1.8 percent of workers covered by the old Civil Service Retirement System.

Stephen Barr's e-mail address is barrs@washpost.com.