Analysis of service members’ financial knowledge level and utilization of the Thrift Savings Plan
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Authors
Cavanaugh, Christopher J.
Subjects
Thrift Savings Plan
Blended Retirement System
retirement
savings
financial readiness
financial knowledge
financial literacy
investments
Index Funds
Blended Retirement System
retirement
savings
financial readiness
financial knowledge
financial literacy
investments
Index Funds
Advisors
Rendon, Juanita M.
Landry, Steven P.
Date of Issue
2018-03
Date
Mar-18
Publisher
Monterey, CA; Naval Postgraduate School
Language
Abstract
The purpose of this research is to identify the service members’ general and Thrift Savings Plan-specific financial knowledge level regarding retirement and to determine important factors to consider for retirement. A voluntary and anonymous survey was administered online to approximately 1,305 students, consisting of U.S. active duty military officers and enlisted service members at the Naval Postgraduate School, to assess their financial knowledge. As the Department of Defense (DoD) changes from a defined benefit retirement system to a defined blended contribution system, preparing for retirement, maximizing annual matching government agency contributions, and having financial knowledge will become critical for military members. The results of the survey found that 24.2% of the total participants scored below a 70% passing grade in answering general financial knowledge questions, 42.6% of the total participants scored below a 70% passing grade in answering Thrift Savings Plan (TSP)-specific general financial knowledge-based questions, and 65.6% failed when asked TSP-specific scenario-based questions. Finally, recommendations were provided to DoD to increase TSP and financial training as service members assume more responsibility in making financial decisions regarding retirement.
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Thesis
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Distribution Statement
Approved for public release; distribution is unlimited.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.