Gov Career

By Phil Piemonte

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Saving for that rainy day called ‘retirement’

Well, sometimes it really does help to force people to do what’s good for them.

The recent change to provide new feds with automatic enrollment in the Thrift Savings Plan likely will turn out to be one of those things.

According to a study commissioned by a coalition called Retirement Made Simpler, and conducted by the Center for State and Local Government Excellence, a similar move to institute an automatic enrollment plan for newly hired state employees in South Dakota produced “a staggering leap in participation rates.”

The study tracked the participation rates in several dozen South Dakota government units in the first eight months of the automatic enrollment program. According to the study, 91 percent of new, eligible employees in units that adopted automatic enrollment are participating in the state’s Supplemental Retirement Plan—a tax advantaged deferred-compensation retirement savings plan offered to members of the South Dakota Retirement System—versus a mere 1 percent of new hires in units without automatic enrollment.

While the differences are not so stark among feds, we’re wondering how long it took you “pre-automatic” TSP enrollees to avail yourself of the plan. Were you a conscientious, early saver? Or did you wait until retirement started looming dangerously on the horizon?

We’d also like to know haw many of you have not opted in at all (a phenomenon more prevalent among younger feds)

Posted by Phil Piemonte on Sep 15, 2010 at 4:02 PM

Reader comments

Fri, Sep 17, 2010

Although I'm CSRS, I've been contributing to TSP for about 8 years as a means of automatically saving and having someone else do the investing and managing at a reasonable fee. I've never received the matching contribution, but the amount I contribute reduces my taxable income each year. TSP's investment options also are way to diversify.

Fri, Sep 17, 2010 Atlanta

I have worked for the govt for 23 years and I would pay 3-5% but lifes hardships would force me to withdraw for different reasons. I am now 7 years away from retirement and I am just now able to save consistently and substantially. I think a mandatory early-in option would benefit many like myself. If it is like taxes you just pay it.

Fri, Sep 17, 2010 Darlene FL

I have always been a saver (Pinch a Penny here an there) I have always saved with US Saving bonds, I enrolled in TSP as soon as I came on board in 2008, I did so at 6% and has increased to 11% just a couple of months ago when I realized the potential in the amount of money that I can save through out the next 16 to 18 years with the matching program. I recommend the TSP to everyone who may have a few dollars left at the end of each month. This is a very easy way to save for your retirement.

Thu, Sep 16, 2010 NM

I enrolled within 2 days of hire. :) Never to early to start. I am currently at 10%, though I would be wise to increase it significantly. However, I do have 3 personal IRAs that I can contribute to as well.

Thu, Sep 16, 2010 Lynn California

I enrolled in TSP as soon as it was available to me, that was back 1986-87. I have always put in the max. I think by the time I'm ready to retire I will have a nice package.

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