FORT WORTH, Texas--(BUSINESS WIRE)--Proposed changes to military retirement benefits are not shaking the commitment of middle-class servicemembers to serve out their careers.
Recent results of the First Command Financial Behaviors Index® reveal that four out of five middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) say that proposed changes to military retirement do not negatively impact their feelings about serving to full retirement at 20 years. Sixty-two percent of respondents say they have not changed their feelings about serving to full retirement, and another 21 percent say they are actually more likely to serve out their careers.
Just 17 percent of survey respondents say they are less likely to serve to full retirement, down 11 points from January to one of the lowest levels since the question was added to the monthly survey in March 2014. These findings are consistent with monthly survey data collected since late January, when the Military Compensation and Retirement Modernization Commission announced its proposal to restructure the traditional 20-year retirement system as a blended program that includes a reduced pension in exchange for a lump sum bonus and a new 401(k)-type plan.
“Career servicemembers are relatively sanguine about proposed changes to military retirement and they remain committed to completing their own military service,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Still, it’s important to note that this initially optimistic reaction could change significantly in the months ahead as we see new analysis and evaluation of the reform proposal. Early responses from national groups representing current and former servicemembers stress the potentially adverse impact this recommendation could have on the retention of mid-career officers and NCOs.”
Support for the existing military retirement system remains strong. Sixty-six percent of survey respondents who say they are likely to serve to full retirement prefer to be grandfathered in under the current system.
“These findings suggest that a continuing commitment to a military career may depend on a reciprocal assurance from the federal government that it will maintain the traditional retirement system for existing servicemembers,” Spiker said. “How the proposed changes may impact the retention of tomorrow’s career military force remains a critical, unanswered question.”
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. www.firstcommand.com/research
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 data.
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, FINRA), 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. 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 Educational Foundation is a 501(c)(3) public charity. It is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.