A significant percentage of military families feel confident they will be able to retire comfortably despite financial challenges related to the COVID-19 pandemic, according to First Command Financial Services.
But those military families who use financial advisors are significantly more confident about their retirement planning than military families that don’t have professional help, the Fort Worth, Texas, firm said Friday.
Seventy percent of middle-class military families (commissioned officers and senior non-commissioned officers in pay grades E-5 and above with household incomes of at least $50,000) felt extremely or very confident in their ability to retire comfortably, according to January-to-May survey results of the First Command Financial Behaviors Index, the company said. That was statistically unchanged from the same period of 2019, it noted.
However, military families with a financial coach reported contributing more to retirement and long-term savings accounts than their do-it-yourself counterparts — $1,459 each month versus $737, according to First Command.
Those families with advisors also felt better about their long-term financial futures, the firm said, noting 79% reported feeling extremely or very confident in their ability to retire comfortably. In stark contrast, only 39% of military families without an advisor reported experiencing similar confidence levels, the firm said.
Similarly, families with an advisor contributed more to short-term savings than those without an advisor — $697 per month versus $350, First Command said.
Meanwhile, 83% of those military families with advisors said they felt their financial situations would improve in the next year. That compared to only 51% of those who did not have advisors, according to the firm.
These behaviors were also reflected in the net worth of military families. Those military families who worked with financial advisors reported average savings and retirement holdings of $242,602 – about $144,000 more than those without advisors, the firm said.
“Military families who work with a financial advisor are better prepared for the pandemic and feeling more confident in their financial future than their do-it-yourself colleagues,” according to Mark Steffe, First Command CEO and president. “They are ready for the financial uncertainties of today, which allows them to continue to pursue retirement readiness for tomorrow,” he said in a statement.
The firm predicted the trend will continue in the months ahead. Military families who work with an advisor were more likely than their DIY counterparts to say they planned to increase their monthly contributions to savings and investments, First Command said.
The continuing confidence of military families overall comes at a time when many military families are worried about the financial impact of COVID-19, the firm noted. About half (51%) of survey respondents said they expected to be extremely or very financially affected by the impacts of the coronavirus outbreak.
The First Command Financial Behaviors Index is compiled by Sentient Decision Science and assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of about 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000, First Command said.
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