First Command Financial Behaviors Index® reveals heightened financial concerns in military families as the Pentagon proposes the deepest cuts to benefits and pay in the history of nation’s all-volunteer force.
The survey shows three out of four middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) expect to be financially affected by the anticipated cuts to defense spending. They are experiencing heightened financial concerns on a number of compensation-related issues, with reduced retirement benefits easily emerging as their top concern. It was cited by 38 percent of survey respondents in January and February compared to just 15 percent in October. Concerns are also growing quickly over:
- Likelihood of not being promoted (33 percent, up seven points from January).
- Reductions in personal expense benefits, including housing, clothing and food (31 percent, up six points)
- Early separation or not serving to full retirement (26 percent, up seven points).
- Job security (32 percent, up six points).
Meanwhile, military families are continuing to deal with their sequestration-related concerns through a focus on frugal living. When asked how they are preparing for sequester cuts, survey respondents indicated they are:
- Cutting back on everyday spending (49 percent)
- Increasing the amount they are saving (34 percent)
- Decreasing the aggressiveness of their investments (18 percent)
- Moving investments to cash (7 percent)
- Starting to work with a financial advisor (6 percent)