Threat Of Forced Exit From Military Triggers Worry In Active-Duty Households, First Command Reports

First Command Financial Behaviors Index®  reveals majority of middle-class military families don’t expect to retire as comfortably as prior generations

FORT WORTH, Texas – Current defense downsizing efforts are prompting new financial fears in middle-class military households, with the majority of families worrying that they will be forced to leave active-duty service before qualifying for lifetime retirement benefits.

Recent survey findings from the First Command Financial Behaviors Index® reveal that 67 percent of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) are concerned about the increased possibility of involuntary separation. An early forced exit from the armed forces is seen as a serious financial threat by many active-duty families, with almost nine out of ten hoping to qualify for a traditional military retirement by completing at least 20 years of service.

“The prospects of an involuntary, early end to their military careers weighs heavily on today’s servicemembers,” said Scott Spiker, CEO of First Command. “They are facing the loss of not only immediate income but also a unique lifetime benefit that has become an important and valuable consideration for those who choose a military career. Roughly three out of five survey respondents say that today’s military families will not be able to retire as comfortably as prior generations.”

Notably, these concerns have emerged at a time when traditional visions of a retirement of leisure are coming to an end. Three quarters of survey respondents expect to continue full-time work after leaving the military. On average those who expect to retire from the military say they will work 13 years in a post-military career, then exit the workforce entirely at age 63. Those who expect to separate from the military anticipate working another 24 years, then retire at age 64. This compares to an average age of 66 for the general population.

While ensuring a financially comfortable retirement is important to military families, it’s only part of the story. When asked why they are likely to work after leaving the military, the No. 1 reason given by servicemembers is that they want to stay busy (64 percent). Other top considerations include a mix of financial and emotional motivations. Military families plan to continue working because they:

• Want to increase their retirement savings (62 percent)
• Want to stay intellectually engaged (58 percent).
• Need the extra income (55 percent).
• Want to delay tapping into their retirement savings (43 percent).
• Want the sense of fulfillment they get from working (42 percent).

These findings re-enforce results of a national survey of Baby Boomers performed through the Index. In “Reinventing Retirement,” First Command reported that for the majority of Americans born between 1946 and 1964 staying busy trumps financial motivations as the top driver of their desire to keep working.

“Our men and women in uniform understand the financial and career uncertainties that lie before them,” Spiker said. “But even in the midst of these worries we see that military families are looking beyond money issues toward an emerging vision of how Americans will spend their golden years.”


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. www.firstcommand.com/research

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 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.

First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc. in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met.