Community Corner

Retirement Cutbacks Lead Financial Concerns Of Military Families

Military retirement is a bigger concern to military families than the economy or fuel prices, according to the First Command Financial Behaviors Index.

Editor's note: The following analysis comes from a Financial Behaviors Index release.

proposed overhaul of the military retirement systemhas emerged as the No. 1 financial worry of  military families, easily surpassing the economy and related issues in a ranking of top money concerns.

 Recent survey findings from the First Command Financial Behaviors Index reveal that 71 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) identify government cuts to military retirement benefits as one of the financial issues that concerns them the most. The economy came in second at 54 percent, followed closely by the cost of gas at 51 percent.

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Notably, the ability to retire comfortably was cited by half of survey respondents, making retirement issues two of the top four financial concerns in military families. The Index reveals that just 35 percent of survey respondents say they are extremely or very confident in their ability to retire comfortably. And when asked about their ability to retire comfortably “given government cuts to military retirement benefits,” uncertainty intensified with just 19 percent saying they are extremely or very confident.

“These findings are a dramatic indicator of the growing level of concern in active-duty families  regarding their long-term financial futures,” said Scott Spiker, CEO of First Command Financial Services, Inc. “While the continuing economic turmoil weighs heavily on many middle-class families, the proposed overhaul of the military retirement system has become an even more critical financial concern of our men and women in uniform.” 

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The top 10 financial worries cited by survey respondents are:

  1. Government cuts to military retirement benefits (71 percent )
  2. State of the economy (54 percent)
  3. Cost of gas (51 percent)
  4. Ability to retire comfortably (50 percent)
  5. Cost of everyday goods (40 percent)
  6. Value of real estate (38 percent)
  7. Personal debt (37 percent)
  8. Ability to send kids to college (31 percent)
  9. Stock market (30 percent)
  10. Unemployment/job security and cost of health insurance (tie at 21 percent each)

Military families are responding by taking action. The index reveals that 37 percent of families have changed their financial behaviors as a result of the proposed military retirement cutbacks. These consumers are saving more (59 percent) and paying more on debt (51 percent). And of the military families who have not changed their financial behaviors, they are also planning to save more (31 percent) and pay  down debt (26 percent).

 “As the federal government continues to propose changes to military retirement benefits, military families will continue to respond by changing their financial behaviors for the better,” Spiker said. “We expect saving more and paying down debt will be among the key money strategies on display in active-duty households in 2012.”


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