The First Command Financial Behaviors Index® reveals four out of five
career service members want to stick with current system
FORT WORTH, Texas–(BUSINESS WIRE)–Support for the military’s current retirement system is strengthening
among America’s career service members, with four out of five families
expressing a desire to stick with the traditional pension rather than
opt in to the new blended retirement plan that goes into effect in 2018.
Third quarter results of the First Command Financial Behaviors Index®
reveal that 82 percent of middle-class military families (commissioned
officers and senior NCOs in pay grades E-5 and above with household
incomes of at least $50,000) say they want to be grandfathered into the
current retirement system. That’s up nine points from the previous
quarter and 14 points from the same time a year ago.
The new system, which goes into effect on Jan. 1, 2018, calls for a 20
percent reduction in current retirement pay in exchange for a defined
contribution program of automatic and matching Thrift Savings Plan
contributions, a mid-career continuation pay bonus and options to
receive a portion of retirement as a lump sum. Proponents say the new
structure will offer greater financial flexibility and pave the way for
a higher percentage of service members to leave the military with at
least some retirement savings. But the majority of today’s career
military remain unconvinced.
“Our survey data continues to reinforce the obvious preference that
career service member families feel for the lifetime financial security
offered by the traditional military pension,” said Scott Spiker, CEO of
First Command Financial Services, Inc. “While proponents of the new
blended retirement system tout the value of the cash contributions and
other benefits, today’s service members appear to strongly value the
guarantees of the existing system. They clearly view the military’s
traditional retirement program as a powerful benefit, one that has
formed the foundation of long-term financial security for generations of
career service members.”
Looking ahead, the majority of current service members who qualify to
opt in to the new system expect to seek professional help making that
decision. November survey results reveal that 86 percent are likely to
consult a financial advisor. And among those who are already working
with a financial advisor, 66 percent say they are extremely or very
likely to ask their advisor for help with the opt-in decision (compared
with only 21 percent of those who do not have a financial advisor).
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
About First Command
First Command Financial Services and its subsidiaries, including First
Command Bank and First Command Financial Planning, assist American
families in their efforts to build wealth, reduce debt and pursue their
lifetime financial goals and dreams—focusing on consumer behavior as the
first and most powerful determinant of results. Through knowledgeable
advice and coaching of the financial behaviors conducive to success,
First Command Financial Advisors have built trustworthy, lasting
relationships with hundreds of thousands of client families since 1958.
First Command Financial Services, Inc., is the parent of First
Command Financial Planning, Inc. (Member SIPC,
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.
First Command Financial Services, Inc.
Mark Leach, 817-569-2419