First Command Reports: Financial Confidence Surging in Military Families

Strong savings behaviors are helping career military families march ahead of the general population in feelings of financial confidence, according to the latest findings of the First Command Financial Behaviors Index®.

First quarter 2019 results reveal that 72 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 that their financial situation will improve in the next year. That compares to 41 percent of their civilian counterparts.

Retirement confidence is also higher in military households. Sixty-four percent of military respondents report feeling extremely or very confident in their ability to retire comfortably. That compares to 36 percent of the general population.

The higher financial confidence levels reported by military families line up with their solid commitment to regular savings. Military families who contribute to retirement and savings accounts report average monthly contributions of $1,576. In contrast, general population families reported a monthly average of $1,231.

“Our research has consistently shown that the act of saving can enhance feelings of financial confidence,” said Scott Spiker, chairman/CEO of First Command Financial Services, Inc. “Career military families regularly outpace the rest of the middle class in retirement savings. We see that positive financial behavior reflected in stronger feelings of confidence and optimism in the future.”

Financial confidence is also surging in career military families who:

• Participate in the government’s new Blended Retirement System (BRS) and
• Work with a financial coach.

Eighty-one percent of BRS families report feeling extremely or very confident in their ability to retire comfortably. That compares to 57 percent of families covered by the traditional military pension.

That heightened confidence aligns with their greater participation in the Thrift Savings Plan, the government’s 401(k)-style defined contribution plan. Participation rates are 82 percent for BRS families versus 56 percent for those covered under the traditional pension system.

“BRS families have an incentive to contribute to the Thrift Savings Plan that is not available to other military families,” Spiker said. “The Department of Defense offers these families a matching funds program. BRS participants earn a dollar-for-dollar match for the first 3 percent and 50 cents on the dollar up to the next 2 percent. We advise our eligible clients to take maximum advantage of this valuable offer. It’s a prudent move for building long-term assets.”

Financial confidence levels are also strong among military families who work with a financial coach. The Index reveals that families with a financial advisor are more likely than do-it-yourselfers to feel extremely or very confident that their financial situation will improve in the next year (79 percent versus 49 percent) and in their ability to retire comfortably (74 percent versus 34 percent).

These heightened levels of financial confidence are also associated with stronger savings behaviors. Military families with a financial advisor are more likely to have long-term and retirement savings and contribute more each month than those without financial advisors. They report average savings and retirement holdings of $213,818, or about $131,000 more than those without an advisor.

“Knowledgeable financial advisors are positioned to deliver great benefits to military families,” said First Command President and Chief Operating Officer Mark Steffe. “They can help you assess your circumstances, set specific goals aligned to your values and diagnose risk tolerance. Then, armed with that information, they can work with you to build a comprehensive financial plan that incorporates the Thrift Savings Plan and your other military benefits. Perhaps most importantly, a financial advisor will coach you to build your net worth today so you can feel more confident and secure in the years to come.”

Look for the savings trend in military families to continue in the months ahead. Career military families are more likely than their civilian counterparts to say they intend to increase their monthly contributions to savings and investments. The sub-Index for financial intentions increased to 149 in military families versus 106 in the general population. Those results contributed to overall Index scores of 152 for military families and 114 for the general population.

The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.

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. http://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.

First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Advisory Services, 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., a broker-dealer. Financial planning and investment advisory services are offered by First Command Advisory Services, an investment adviser. 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. First Command Financial Services, Inc. and its related entities are not affiliated with, authorized to sell or represent on behalf of or otherwise endorsed by any federal employee benefits programs referenced, by the U.S. government, or the U.S. armed forces.

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