11 Oct, 2014
Job Security Concerns Surging in U.S. Military Families, First Command Reports
FORT WORTH, Texas–(BUSINESS WIRE)–October 09, 2014 – America’s career military is growing increasingly anxious about how defense downsizing and sequestration will impact their near-term job security.
The First Command Financial Behaviors Index® reveals that 50 percent of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) are concerned about their job security in the coming months. That’s one of the highest levels of concern recorded since the question was added to the monthly survey in spring 2013.
“Our nation’s ongoing military budget woes, defense downsizing and sequestration are at the center of these mounting career worries,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Three out of four survey respondents indicate anxiety regarding sequestration and more than a third expect to be extremely or very affected by anticipated cuts to defense spending.”
The surge in job security concerns also shows up when survey respondents identify the various ways that sequestration is impacting their households. In the August survey, 22 percent of military families said they were less likely to be promoted. And 20 percent of military families said they were impacted by an increased likelihood to experience early separation or not serve to full retirement.
Other impacts of sequestration reported by servicemembers and their families include:
- Reduction in annual pay increases (34 percent)
- Reduction in housing, clothing, food and other personal expense benefits (26 percent)
- Reduction in education benefits (21 percent)
- Reduction in retirement benefits (33 percent)
- Increased responsibility for healthcare costs (31 percent)
- Decrease in discretionary income for non-essentials (23 percent)
- BRAC (Base Realignment and Closure Commission) will force relocation (16 percent)
Many military families are dealing with their sequestration-related concerns through an intensified focus on frugal living. When asked how they are preparing for sequester cuts, survey respondents indicated they are:
- Cutting back on everyday spending (41 percent)
- Increasing the amount they are saving (43 percent)
- Decreasing the aggressiveness of their investments (18 percent)
- Moving investments to cash (16 percent)
Notably, their preparations increasingly involve seeking out professional financial assistance. “Starting to work with a financial advisor” was identified by 12 percent of August survey respondents, up from 3 percent in January.
“Many servicemembers and their spouses are experiencing great career anxiety that is prompting a variety of proactive behaviors, including a growing interest in seeking out professional help with personal finances,” Spiker said. “Financial advisors are ideally positioned to amplify fiscal discipline in a population that is growing ever more concerned about their 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. www.firstcommand.com/research
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 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.
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