Middle-class military families are saving more because of concerns about sequestration and defense cutbacks, according to the First Command Financial Behaviors Index released Wednesday.
Short-term savings averaged $1,080 per month for the three months in the first quarter this year, an increase of 18 percent from the average monthly savings during the fourth quarter of last year. Retirement and long-term savings grew 11 percent to a monthly average of $2,374. Middle-class families are defined as senior non-commissioned officers and commissioned officers with household incomes of at least $50,000. First Command Financial Services operates a broker-dealer and registered investment advisor that focus on serving military famillies.
Military families who work with a financial advisor put more than twice as much money into savings as those who do not work with one. Their average monthly savings totaled $1,723 for short-term savings and $3,951 for retirement and long-term savings. In contrast, the savings for those without an advisor averaged $709 for short-term savings and $1,467 for long-term, says First Command.
The index shows that 51 percent of those who work with an advisor say they feel very or extremely secure, compared with 45 percent of the do-it-yourselfers. Also, those who work with an advisor are more confident in their ability to retire comfortably: 50 percent say they feel very or extremely confident versus 32 percent of those without an advisor, according to the index.
“Although military families continue to encounter financial challenges and uncertainties, they remain proactive in their savings behaviors,” says Scott Spiker, CEO of First Command Financial Services Inc. “The index shows that those who work with financial advisors display fewer financial concerns and more feelings of financial security and confidence than those who go it alone.”