Now you can count military service members among those Americans apparently increasingly concerned about their retirement.
According to the latest survey results from the First Command Financial Behaviors Index, 68 percent of middle-class military families – typically senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000 – agree that today's military families won't be able to retire as comfortably as prior generations — up 11 points from a year ago.
Roughly two-thirds of survey respondents agree that military families are concerned about the increased possibility of involuntary separation and they worry that changes to military retirement benefits will encourage fewer years of service.
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Add to that concerns about sequestration and it's no surprise that 92 percent of middle-class military households have established additional retirement savings on their own. Among them:
- 401(k) accounts (73 percent);
- IRAs (62 percent);
- profit-sharing accounts (19 percent);
- non-military pension funds (19 percent).
The most widely known savings vehicle for military families is the Thrift Savings Plan, a tax-advantaged, defined-contribution retirement savings plan similar to corporate 401(k) plans, noted Scott Spiker, CEO of First Command Financial Services Inc.
"In 2011, the First Command Financial Behaviors Index revealed that almost half of TSP participants said they were enrolled in one of the lower-risk investment options in the program," he said. "(The firm's) surveys (also) have indicated that sequestration concerns have prompted many military families to decrease the aggressiveness of their investments."
Not surprisingly, service members who decide to work with financial planners seek out face-to-face service from people who earn their trust. A recent survey through the Financial Behaviors Index reveals that more than three out of five middle-class military families cite honesty and trustworthiness as the most important attributes to look for when picking a financial planner.
Much like other American families, military families also look for financial planners who are:
- Knowledgeable (59 percent);
- willing to listen (48 percent);
- experienced (45 percent);
- understanding (38 percent).
In contrast, the cost of planning services is one of the least-significant considerations for service members when choosing a planner. Just one in four respondents picked "low price for services" as the most important attribute to look for in a planner.
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