Military families are increasingly concerned about the impact that sequestration and defense downsizing may exert on military pay, benefits and career viability. In light of these concerns, many military families are intensifying their savings habits, and those who work with a financial advisor are putting away considerably more dollars than their do-it-yourself colleagues, according to a new survey.
The First Command Financial Behaviors Index® reveals that middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) who work with a financial advisor are putting almost twice as much money into short-term savings as those who don’t work with an advisor. During the fourth quarter, their average monthly rate totaled $1,228. In contrast, those without an advisor averaged just $683.
The impact of working with a financial advisor is particularly evident in long-term savings behaviors. The fourth quarter survey results reveal that military families who work with a financial advisor put an average of $1,133 per month into long-term savings. That’s about four times the $278 per month socked away by those who don’t work with an advisor. And the average monthly retirement savings rate was $1,657 for those with an advisor versus $1,055 for those without.
All told, servicemembers who work with a financial advisor are saving an average of $2,000 more per month than those who go it alone.
The savings trend is expected to continue for at least the near future. Most survey respondents indicated that they do not foresee making a change in their savings behaviors in the coming months.