Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
By Cyril Tuohy
A new survey by First Command Financial Services finds that members of the nation’s armed services who work with a financial advisor put away as much as $2,000 more per month than those who don’t, a trend that is expected to continue over the next several months.
Military families put away as much as $4,018 in short-term, long-term and retirement savings compared with $2,016 for families without a financial advisor, the First Command Financial Services Financial Behaviors Index survey found.
“This dramatic savings gap highlights the positive influence a trusted financial advisor can have on the money habits and long-term financial security of our men and women in uniform,” said Scott Spiker, chief executive officer of First Command Financial in Fort Worth, Texas.
Middle-class military families working with an advisor stashed away short-term savings of $1,228, long-term savings of $1,133 and retirement savings of $1,657, the survey found, for a total of $4,018 every month.
Middle-class military families without an advisor set aside $683 in short-term savings, $278 in long-term savings and $1,055 in retirement savings, for a total of $2,016.
The survey covered the savings habits of senior noncommissioned officers and commissioned officers in pay grades E-6 and higher with household incomes of at least $50,000.
“All told, service members who work with a financial advisor are saving an average of $2,000 more per month than those who go it alone,” said
If putting away as much as $4,018 a month seems like a lot, it is. As long as military families work for the government, they don’t have the same expense burden as the rest of the civilian population because all their needs are paid for.
But once discharged, it’s a different story.
The need to put money aside in their early years while working for the government is pressing. Recent government cutbacks and an uncertain economic military future have motivated advisors to prepare families, Spiker also said.
“Although military families continue to encounter challenges, they are steadfast in their proactive stance,” Spiker said in a news release. “And it is especially worth noting that those who work with financial advisors are displaying many of the key behaviors we associate with financial security and feeling confident in the future.”
The Financial Behaviors Index found that 60 percent of military families expressed feelings of anxiety connected to government cutbacks during the third quarter.
The index was released in conjunction with Sentient Decision Science.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at email@example.com.
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