How FedSmith.com Readers Utilize the TSP: FERS vs. CSRS

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By on October 3, 2017 in Pay & Benefits with 0 Comments

Close up of a senior woman's hand putting a coin into a piggy bank

We asked our readers in a recent survey about their investment habits in utilizing the Thrift Savings Plan. We received over 2,000 responses which provided insight into how federal employees use this important retirement savings benefit.

The TSP is available to federal employees under both CSRS and FERS. As part of the survey, we asked respondents in which retirement system they were enrolled.

This article breaks down the responses from employees under each system. To see a detailed summary of the overall survey responses, see How FedSmith.com Readers Utilize the TSP.

FERS

88% of respondents said they were under FERS. FERS respondents have worked as a federal employee for an average of 20 years, and the vast majority (83%) indicated they are current civilian federal employees.

TSP Investing Habits

Respondents under FERS have been contributing to the TSP for 18 years on average and contribute an average of $2,022 a month to their TSP accounts. The average balance for FERS respondents is $375,765 and the average annual salary is $103,571.

The highest reported balance in the TSP was $2,400,000, and there are a total of 66 FERS respondents who said they have a TSP account balance in excess of $1 million.

Only FERS employees get the possibility of a match in the TSP. The average agency match respondents reported was 9%. It ranged anywhere from 1% to 100%.

FERS respondents said that they generally do not make changes on a frequent basis to their TSP accounts. The majority (19%) said they make changes twice a year, while 17% do so quarterly, 14% do so annually, and 8% do so monthly.

Bar chart showing how often survey respondents under FERS state that they make changes to their TSP account allocations

However, respondents said they check stock prices on a more frequent basis. 30% say they check prices weekly, 26% say daily, 21% monthly, and 13% quarterly. Just 1% said they check stock prices annually.

As to their returns, FERS respondents were almost split on how they feel the frequency of their trades inside of the TSP impacts their returns. 52% said they do better by trading frequently. 70% said the recent increase in stock prices has not caused them to to alter any of their allocations, and 74% said that they do not make changes to their allocations in response to stock market declines.

Respondents under FERS said they are currently invested in the TSP as follows:

G 42.31%
F 21.76%
C 68.75%
S 61.22%
I 51.66%
L 2050 13.36%
L 2040 11.25%
L 2030 12.41%
L 2020 11.73%
L Income 3.46%

 

Bar chart showing percentages of FERS employees investments in each of the TSP funds

TSP funds in which participants under FERS said they are invested

CSRS

The other portion of respondents fell under CSRS. This group is much smaller, representing only 12% of all respondents. This is how they said they utilize their TSP accounts.

TSP Investing Habits

On average, CSRS respondents worked for the government for 34 years, and the majority (57%) are retired civilian employees, while 42% are current civilian employees. They said they have been contributing to the TSP for an average of 22 years and contribute an average of $2,424 each month. Their average balance in the TSP is $323,553 and their average annual salary is $102,292.

The vast majority of CSRS respondents make changes to their accounts less than once per year (52%). 17% said they do so twice a year, 14% do so annually, 9% do so quarterly, and 7% monthly. They check stock prices more frequently, however. Half said they check either monthly or daily, 21% check them weekly, 18% quarterly, and 8% less than once a year.

Bar chart showing how often survey respondents under CSRS state that they make changes to their TSP allocations

CSRS respondents’ stated positions on the impact major stock market shifts have on their behavior matches how often they said they trade. 77% said the recent increase in stock prices has not caused them to change their TSP allocations, and 80% said that stock market declines do not cause them to make changes. The split between CSRS respondents was exactly 50/50 with regards to whether or not they feel they get better returns by trading more frequently.

Respondents under CSRS said they are currently invested in the TSP funds as follows:

G 57.07%
F 27.72%
C 69.02%
S 50.54%
I 45.65%
L 2050 4.89%
L 2040 6.52%
L 2030 11.41%
L 2020 14.13%
L Income 3.80%

 

Bar chart showing stated investments in each of the TSP funds by CSRS employees

TSP funds in which participants under CSRS said they are invested

The Lone CSRS Millionaire

Only one respondent said s/he was a TSP millionaire with a stated total account balance of $7 million. For anybody who might say this is not possible, it does line up with the last reported figures from the TSP on participant account balances.

According to data we published in March, the highest balance as reported by the TSP was over $5 million. Ralph Smith wrote in that article, “That account is probably worth considerably more now as the C fund is up 5.95% in the first two months of 2017.  That account balance is based on data as of December 14, 2016.”

Our thanks to all of our readers who took the time to share their feedback with us in the survey. Feel free to carry the discussion further in the comments below.

© 2017 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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