Two-thirds of military families contributed to retirement and savings accounts in the second quarter, First Command Financial Services found. Sixty-two percent of service members think their financial situation will improve in the coming year, up from 51% a year ago, and 58% think they will be able to retire comfortably, up from 51%.
Seventy-three percent of service members who work with a financial adviser contributed to their retirement account in the second quarter, contributing a monthly mean of $400, whereas only 54% of service members who are not working with an adviser did so, contributing a monthly mean of $269.
And those working with an adviser are much more confident. Seventy percent of this group think their financial situation will improve in the coming year, compared to 37% of those without an adviser. Sixty-seven percent of those with an adviser think they will be able to retire comfortably (compared to 30%). They also think they will be able to save more (46% versus 28%) and put more money into debt reduction (37% versus 14%).
“Families who work with a financial adviser are leading the savings surge that is under way in America’s career military,” says Scott Spiker, CEO of First Command Financial Services. “At a time of considerable uncertainty about sequestration and defense spending, these families are saving money and cutting debt at a rate that is outpacing those without an adviser. As a result, they are overcoming feelings of uncertainty about military spending and becoming more confident in their own finances.”
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Seventy-six percent of service members who work with an adviser deposited money into a short-term savings account, adding a monthly mean of $475 (compared to 57% and $315). And 68% of those working with an adviser deposited money into a long-term savings account, adding a monthly mean of $400 (compared to 34% and $200).
Military families who work with an adviser are also working to pay down short-term debt; 75% of those with an adviser are making monthly mean contributions of $485 for this effort (compared to 69% of those without an adviser, who are making monthly mean contributions of $537). Sixty-nine percent of those with an adviser are working to pay down long-term debt, making monthly mean contributions of $600 (compared to 61% and $900).
“These findings underscore the critical role a financial
professional can play in helping service members improve their own money
behaviors,” Spiker says. “Financial coaching is a proven, time-tested approach.
Through face-to-face support, career military families are learning to cut
their debt and spending in order to save for the future and pursue their own
path to retirement security.”
Sentient Decision Science conducted the survey of 530 service members with annual household incomes of at least $50,000 for First Command.