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Survey: Military Families Emphasize Health Care Savings in Retirement Planning

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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.

This new focus on Tricare is yet another indicator that active-duty families are concerned about the proposed overhaul of the military retirement system. A separate Index survey revealed that two thirds of middle-class military families feel nervous about potential changes, which would phase out the traditional vesting system that provides lifetime income to retirees after 20 years of service.

“Our men and women in uniform clearly place great value on Tricare,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Almost nine out of ten survey respondents say that Tricare is an extremely or very important part of their military retirement benefits. Faced with the possibility of an erosion of this benefit, active-duty families are dedicated to learning more today and saving more for tomorrow. One of the positive developments of this proposal appears to be an increased focus on saving for retirement healthcare needs, which would bring active-duty families more in line with the general population.”


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