Analysis of service members’ financial knowledge level and utilization of the Thrift Savings Plan
Cavanaugh, Christopher J.
Rendon, Juanita M.
Landry, Steven P.
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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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