Proposed changes to the military’s health insurance program, Tricare, are prompting middle-class military families to begin looking at new ways to cover their medical costs during retirement.
The latest findings of the First Command Financial Behaviors Index reveal that 31 percent of middle-class military families (those in pay grades E-6 and above with household incomes of $50,000 or more) are extremely or very nervous about proposed changes, which could mean increased out-of-pocket costs during retirement. In response, they expect to:
- Increase the amount they are saving for health care costs during retirement (52 percent of survey respondents).
- Get more information on the proposed changes (27 percent).
- Look into different retirement options (16 percent).
The potential increase in savings for health care costs during retirement is a significant development as middle-class military families save considerably less for this need than the general population. Among consumers who save for medical needs in retirement, military families report saving a median amount of $30 per month compared to $100 in the general population.
Notably, military families are significantly less concerned with their ability to pay for medical care during retirement than those in the general population. Just 16 percent of servicemembers are extremely or very concerned compared to 42 percent of the general population.