Market Overview

First Command Reports: Career Concerns Easing in Military Families


Near-term career concerns appear to be easing in America's career military families, where worries over defense downsizing have been a persistent drag on feelings of job security.

May results of the First Command Financial Behaviors Index® reveal that 48 percent of middle-class military families (senior NCOs and commissioned officers in pay grades E-5 and above with household incomes of at least $50,000) are concerned about their job security in the coming months. That's down from a record high of 59 percent in September 2015. The year-to-date average is 47 percent, down slightly from 52 percent for the fourth quarter and 54 percent for 2015.

"This recent drop in job security concerns may be driven in part by news reports about members of Congress calling for the Army to add personnel, reversing the cuts of recent years," said Scott Spiker, CEO of First Command Financial Services, Inc. "While the down tick is welcome news, it may not last as critics of the proposal have already noted that lawmakers have yet to permanently resolve the deep across-the-board cuts to defense and other federal spending called sequestration. Notably, we've not seen a downturn in sequestration worries. Seven in ten survey respondents report anxiety about cuts to defense spending and three quarters expect to be financially affected by them. We'll continue to watch these key measures closely in the months ahead."

Broader career-related concerns continue to show up when survey respondents identify the various ways that sequestration may impact their households. In the May survey, 28 percent of military families said they were less likely to be promoted. And 24 percent of military families pointed to an increased likelihood to experience early separation or not serve to full retirement.

Other impacts of sequestration reported by career service members and their families include:

  • Increased responsibility for healthcare costs (38 percent)
  • Reduction in annual pay increases (38 percent)
  • Reduction in retirement benefits (34 percent)
  • Reduction in housing, clothing, food and other personal expense benefits (32 percent)
  • Reduction in education benefits (29 percent)
  • Reduction in Basic Allowance for Housing (28 percent)
  • Decrease in discretionary income for non-essentials (24 percent)
  • BRAC (Base Realignment and Closure Commission) will force relocation (14 percent)

Many military families are dealing with their sequestration-related concerns through an intensified focus on frugal living. When asked how they are handling sequester cuts, survey respondents indicated they are:

  • Cutting back on everyday spending (52 percent)
  • Increasing the amount they are saving (48 percent)
  • Starting to work with a financial advisor (25 percent)

"Working with a financial advisor is an ideal way to deal with the fiscal uncertainties of defense downsizing and sequestration," Spiker said. "Advisors can help service member families develop strong financial behaviors to address concerns involving military pay, benefits and career viability. Over the coming months we expect to see even more military families seek out trusted professionals to help them get their household finances squared away."

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.

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 Advisory Services, 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 Advisory Services, Inc., 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. , a broker-dealer. Financial planning and investment advisory services are offered by First Command Advisory Services, Inc., an investment adviser. 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 Financial Services, Inc. and its related entities are not affiliated with, authorized to sell or represent on behalf of or otherwise endorsed by any federal employee benefits programs referenced, by the U.S. government, or the U.S. armed forces.

First Command Financial Services, Inc.
Mark Leach, 817-569-2419
Media Relations

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