Members of the military are increasingly worried about how they are going to make ends meet in retirement, according to a new report.
A survey from the First Command Financial Behaviors Index showed that 68% of middle-class military families — which includes senior non-commissioned officers and commissioned officers with incomes above $50,000 a year — agree that today’s active military will not be able to retire as comfortably as prior generations.
That was an increase of 11 percentage points from last year’s survey.
Downsizing of the Defense Department and cuts being made because of congressional haggling have led more than one-third of military families to believe they will be living on reduced retirement benefits.
Despite the gloomy outlook about reduced future benefits, 92% of middle-class military households say they have retirement savings outside of their military pension and Social Security. Of those who expect to reach full retirement status, 43% say their post-retirement income will come from non-military sources.
Seventy-three percent say they have 401(k) accounts, 62% say they have IRAs, 19% have profit-sharing accounts and 19% have non-military pension funds.
“The uncertainty surrounding sequestration and military retirement benefits is fueling concerns in many military families,” said Scott Spiker, CEO of First Command Financial Services Inc. in Fort Worth, Texas. “Half of families report feeling anxious about sequestration.
"The good news is that these families are taking positive actions to protect their fiscal health, including cutting back on everyday spending and amassing assets for their retirement years. They are preparing for an uncertain financial future by getting their family finances squared away now. ”
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, First Command said.