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First Command Reports: New military retirement course sparks interest in financial coaching

The First Command Financial Behaviors Index® indicates many career military families expect to seek professional financial advice on new Blended Retirement System

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FORT WORTH, Texas – The Pentagon's new opt–in training course for the Blended Retirement System is stimulating service member interest in seeking professional financial advice.

The First Command Financial Behaviors Index® reveals that 76 percent of middle–class military families (commissioned officers and senior NCOs in pay grades E–5 and above with household incomes of at least $50,000) who have taken the required opt–in course say they are extremely or very likely to consult a financial advisor for help with the decision to either enter the new military retirement system or stick with their current retirement pension benefit. That compares to just 50 percent of respondents who have not yet taken the course. The opt–in course has been available online since January.

Likelihood to seek out professional guidance on the opt–in decision is even higher for those who are finding the most value in the course. Among respondents who say the training is extremely or very useful, 81 percent report they are extremely or very likely to consult a financial advisor for help with the decision.

“These survey findings underscore the critical role that professional financial coaching can play in helping service member families navigate one of the most significant changes to military pay and benefits in 70 years,” said Scott Spiker, chairman/CEO of First Command Financial Services, Inc. “Three quarters of survey respondents indicate they've already taken the required online training course, which continually reminds service members to seek help from financial professionals in making the Blended Retirement System opt–in decision. Clearly career military families are signaling their intentions to take that training recommendation to heart.”

The Blended Retirement System features a 20 percent reduction in current guaranteed retirement pay generated by the old traditional pension in exchange for a variety of new benefits that include automatic and matching Thrift Savings Plan contributions, a mid–career continuation pay bonus and options to receive a portion of the reduced pension as a lump sum. Service members who enter the military on or after Jan. 1, 2018, will be automatically enrolled in the new system. But the new plan is also available to many current service members, specifically those who will have less than 12 years of service as of Dec. 31, 2017. They can choose to either stay with the old retirement system or opt in to the new one. Sixty–eight percent of survey respondents indicate they are eligible to opt–in to the new system.

“Service members recognize that one online education course is not enough to adequately inform a financial decision that will last a lifetime,” Spiker said. “The course's recommendation to pursue professional financial advice aligns with our position that career military families benefit most from programs that go beyond sharing knowledge to shape savings and investment behaviors. We support offering service members on–installation access to a broad range of financial providers who can provide the type of financial coaching that is already helping many career military families in their long–term pursuit of financial security.”

Support for the Blended Retirement System has been strengthening among career service members, with two out of five families now expressing a desire to opt in to the new plan. February survey results reveal that 41 percent of respondents want to opt in to the new system. That's up from just 8 percent in August.

Service members who want to opt in to the new retirement system will be required to make that decision in 2018.

About 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. Financial Behaviors Index

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 Advisory Services, First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams–focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.


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