First Command News & Media

FOR IMMEDIATE RELEASE — Aug. 21, 2015

Savings Drive Stays Strong Among Career Servicemembers, First Command Reports

The First Command Financial Behaviors Index® reveals that military families who work with a financial advisor are saving more than their do-it-yourself peers

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FORT WORTH, Texas — America’s career servicemembers are continuing to sock away dollars for the future – and families who work with a financial advisor are leading the way.

The First Command Financial Behaviors Index® reveals that roughly two thirds of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) contributed to retirement and savings accounts during the second quarter. These savings efforts continue a positive trend that has emerged over recent quarters, and they are helping servicemembers and their families feel more confident that their financial situation will improve in the next year (62 percent, up 11 points) and they’ll be able to retire comfortably (58 percent, up 7 points).

“Families who work with a financial advisor are leading the savings surge that is under way in America’s career military,” said Scott Spiker, CEO of First Command Financial Services, Inc. “At a time of considerable uncertainty about sequestration and defense spending, these families are saving money and cutting debt at a rate that is outpacing those without an advisor. As a result they are overcoming feelings of uncertainty about military spending and becoming more confident in their own finances.”

The Index reveals that 73 percent of those with a financial advisor put money into retirement accounts during the second quarter. This compares to 54 percent for those without an advisor. Servicemembers with a financial advisor also put significantly more dollars into those retirement accounts. Monthly median contributions for savers in the two groups are $400 and $269, respectively.

Servicemembers who work with a financial advisor also put more money into:

  • Short-term savings (76 percent versus 57 percent for those without an advisor). Monthly median contributions for the two groups are $475 and $315, respectively.
  • Long-term savings (68 percent versus 34 percent). Monthly median contributions for the two groups are $400 and $200, respectively.
  • Short-term debt (75 percent versus 69 percent) . Monthly median contributions for the two groups are $485 and $537, respectively.
  • Long-term debt (69 percent versus 61 percent). Monthly median contributions for the two groups are $600 and $900, respectively.

Military families who work with financial advisors are displaying a particularly promising outlook. Their strong savings and debt repayment efforts are helping them to feel more confident than their do-it-yourself colleagues that their financial situation will improve in the next year (70 percent versus 37 percent) and in their ability to retire comfortably (67 percent versus 30 percent). They are also more likely to anticipate saving more (46 percent versus 28 percent) and putting more dollars into debt reduction (37 percent versus 14 percent) in the months ahead.

These sanguine attitudes and intentions helped propel the overall Index score ahead 11 points to a record high of 151 for the second quarter. The score for those with a financial advisor surged 18 points to 167. The score for the do-it-yourself crowd dropped five points to 93. The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.

“These findings underscore the critical role a financial professional can play in helping servicemembers improve their own money behaviors,” Spiker said. “Financial coaching is a proven, time-tested approach. Through face-to-face support, career military families are learning to cut debt and spending in order to save for the future and pursue their own path to retirement security.”

About 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. Financial Behaviors Index

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.

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