Military families recently did worse than civilian ones on a financial readiness test, according to First Command Financial Services Inc.
The average score on the financial readiness test for middle-class military families was 62 while civilian families scored 76. The test was administered in conjunction with the First Command Educational Foundation.
The military score marks a low for the test, which has been administered for six years. Sixty-eight percent of military test takers scored a six or lower on the nine-question test. Just 5 percent earned a perfect score.
For civilians, 39 percent scored six or lower and 17 percent scored a perfect score.
The poor scores on the part of the military are particularly disturbing because the new military pension system allows service members to make more of their own financial decisions about retirement and pensions.
“While frequently praised as a way to give deserving service members new opportunities to control their own financial futures, the new [pension] system places the weight of increased financial decision-making and its attendant risk on the shoulders of our career military families,” says Scott Spiker, CEO of First Command Financial Services.
The Department of Defense has been developing financial education instruction and training programs to help service members make decisions related to the new military retirement system. Military respondents are significantly more likely than their general population peers to say they have completed a financial education program (45 percent versus 21 percent), but the benefits of those programs are not significantly reflected in test scores, says First Command.