Apr 19, 2018   SOURCE: BusinessWire

First Command Reports: Military Families with Financial Advisors Saving More for Retirement

Career military families who work with a financial advisor are putting considerably more dollars away for retirement than their do-it-yourself counterparts.

Fourth quarter 2017 results of the First Command Financial Behaviors Index® reveal that middle-class military families (commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000) who invest in retirement accounts put away an average of $977 per month. That compares to just $544 for families without an advisor. Families with a financial advisor are also more likely to own a retirement account (66 percent versus 51 percent of those without an advisor).

Working with a financial advisor also aligns with greater retirement confidence. Sixty-nine percent of those with a financial coach are extremely or very confident in their ability to retire comfortably. That compares to just 27 percent of military families without an advisor.

“Our research continues to show that the financial and emotional elements of retirement readiness are strongest among career military families who work with a financial coach,” said Scott Spiker, chairman/CEO of First Command Financial Services, Inc. “Financial coaching promises to be a particularly important topic in the months ahead as service members and their families learn their way around the new Blended Retirement System. The BRS represents one of the most significant changes to military benefits in 70 years. By coaching their clients to build strong money behaviors, financial advisors will help families continue to confidently pursue their retirement goals.”

Military families with financial advisors are also putting more dollars per month towards:

  • Long-term savings ($719 versus $350 for those without an advisor)
  • Short-term savings ($695 versus $350)
  • Long-term debt repayment ($1,416 versus $1,057)
  • Short-term debt repayment ($862 versus $534)

This ongoing commitment to saving for both short- and long-term needs is reflected in the financial assets of those who work with a financial advisor. They report an average of $144,000 more in accumulated savings and retirement funds than those without a financial advisor. Despite higher debt levels (mostly associated with a mortgage), those with a financial advisor are in a stronger net worth position than their do-it-yourself counterparts.

The savings trend is set to continue. Military families with a financial advisor are more likely to say they will increase their positive financial behaviors in the months ahead. Fifty-one percent intend to increase their savings. That’s considerably more than the rate reported by those without an advisor (24 percent). Half (50 percent) of those with an advisor expect to bump up their debt payments. In contrast, just 28 percent of those without an advisor expect to put more dollars towards paying down debt.

The mix of positive attitudes, behaviors and intentions during the fourth quarter resulted in an overall Index score of 149, down three points from the previous quarter. (The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.) The Index score for families who work with a financial advisor is 173. For those without an advisor, the score is 104.

“Financial coaches are making a significant contribution to the lives of career military families,” Spiker said. “Service members with a financial advisor by their side are in the best position to maintain feelings of confidence today as they continue to pursue financial security for tomorrow.”

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, Inc., 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, Inc., 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.