Retirement Worries Growing in Military Families

Members of the military are increasingly concerned about their retirement prospects, according to a new survey.

The results of the “First Command Financial Behaviors Index” showed 68% of middle-class military families agree that today’s military families will not be able to retire as comfortably as prior generations – up 11 points from a year ago. Roughly two-thirds of survey respondents agree 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.

“Our men and women in uniform are understandably worried about how defense downsizing and sequestration may affect the unique lifetime retirement benefits that have become an important and valuable consideration for those who choose a military career,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Almost nine out of 10 survey respondents say they expect to retire after 20 years of military service, so a potential reduction in the value of the traditional retirement benefit is a significant issue for our career service members.”

During the past six months, military families have grown more likely to expect sequestration will mean reduced retirement benefits (36% in May, up from 28% in November). And they are taking actions to prepare for their own retirements.

The survey revealed 92% of middle-class military households have retirement savings in addition to their military pension and Social Security. And those who expect to reach full retirement status say 43% of their post-retirement income will come from non-military sources.

They expect to one day draw retirement income from a variety of financial vehicles, including:

  • 401(k) accounts (73%);
  • IRAs (62%);
  • Profit-sharing accounts (19%); and
  • Non-military pension funds (19%).


“The uncertainty surrounding sequestration and military retirement benefits is fueling concerns in many military families,” Spiker said. “Half of families report feeling anxious about sequestration. The good news is that these families are taking positive actions to protect their fiscal health, including cutting back on everyday spending and amassing assets for their retirement years. They are preparing for an uncertain financial future by getting their family finances squared away now.”

The survey defined middle-class military families as senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000. Compiled by Sentient Decision Science, Inc., the survey assessed trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers ages 25 to 70.