Military families leading the way in retirement confidence
May 7, 2019
FORT WORTH, Texas – Career military families are outpacing their civilian counterparts in the conviction that they will enjoy a comfortable retirement, according to the latest findings of the First Command Financial Behaviors Index®.
Fourth quarter 2018 results reveal that 66 percent of middle-class military families (commissioned officers and NCOs in pay grades E-5 and above with household incomes of at least $50,000) report feeling extremely or very confident in their ability to retire comfortably. That’s 27 points higher than in general population families of the same income levels.
Notably, this greater retirement confidence aligns with strong savings behaviors. Military families who contribute to retirement and long-term savings accounts report average monthly savings of $1,410. That compares to just $858 in the general population.
Military families are feeling more optimistic in their near-term finances, too. Seventy percent of service member families say they feel extremely or very confident their financial situation will improve in the next year. That compares to just 40 percent of the general population. And they are saving more than the general population for short-term goals ($571 per month versus $355).
“The act of savings is paying double dividends for our Nation’s career military families,” said Scott Spiker, chairman/CEO of First Command Financial Services, Inc. “Our research has long shown that putting money into savings can improve financial attitudes. Military families who focus on building their net worth today are growing their financial optimism for tomorrow.”
Watch for military families to continue to out-save their civilian counterparts in the months ahead. They plan to increase their monthly contributions to savings and investments, which is reflected in the sub-Index for financial intentions (149 for military families versus 99 for the general population).
The overall Index scores are 157 for military families and 112 for the general population, which are statistically unchanged from the previous quarter. The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.
Confidence levels are particularly strong in military families who work with a financial advisor. They are more likely than do-it-yourselfers to feel extremely or very confident that their financial situation will improve in the next year (78 percent versus 47 percent) and in their ability to retire comfortably (75 percent versus 37 percent).
This confidence is reflected in their financial behaviors. Military families with a financial advisor are more likely to say they will increase savings payments in the future than those without an advisor (51 percent versus 31 percent). Similarly, they are more likely to have long-term and retirement savings and contribute more each month than those without financial advisors.
Military families with a financial advisor report average savings and retirement holdings of $229,415, or about $71,000 more than those without an advisor.
“Financial advisors specialize in building confidence, and they do it by coaching their clients in the behaviors that lead to financial security,” said First Command President and Chief Operating Officer Mark Steffe. “We all know we should spend less and save more. But in our daily living we sometimes forget what we know is really important to us and our families for the long term. A financial coach will remind you and help you stay on track. Coaching is where advisors bring the greatest value.”
About the First Command Financial Behaviors Index®
Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. https://www.firstcommand.com/fbi/
About Sentient Decision Science, Inc.
Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.
About First Command
First Command Financial Services and its subsidiaries, including First Command Financial Planning and First Command Bank, coach our Nation’s military families in their pursuit of financial security. Since 1958, First Command Financial Advisors have been shaping positive financial behaviors through face-to-face coaching with hundreds of thousands of client families.