First Command Reports: Military Families Concerned Over Shrinking Pay Raises

FORT WORTH, Texas--(BUSINESS WIRE)-- A third year of sequestration-fueled cuts to annual military pay increases is intensifying the financial worries of America’s career service members.

The latest results of the First Command Financial Behaviors Index® reveal that reductions in annual pay increases rank as the top sequestration concern of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000). Thirty-eight percent of January survey respondents identified reduced raises as one of the ways military budget cuts impact their families. That’s up 12 points from the middle of last year.

This heightened concern follows on the heels of Congress approving a 1.3 percent military pay raise effective Jan. 1. It marks the third consecutive year that the annual military pay raise falls below expected civilian wage growth. Pay raise caps were approved as a way to keep personnel costs in check as part of the budget sequester and defense downsizing.

Basic pay is consistently ranked by career military families as one of their most important benefits. It was ranked No. 1 by 29 percent of survey respondents. Another key military benefit identified by survey respondents was retirement pay, which was picked by 17 percent.

Shrinking pay raises threaten to impact the long-term finances of many military families. Thirty percent of families say they expect to respond by reducing the amount they put into savings and investments.

“America’s career service members continue to express concerns over how military budget cuts impact their family finances,” said Scott Spiker, CEO of First Command Financial Services, Inc. “The majority of military families say they are anxious about cuts to defense spending and expect to be financially impacted by them. They continue to respond through a variety of positive financial behaviors, including saving more and spending less. Roughly one in four career military families are turning to financial advisors for help. That’s a smart approach, as our survey results consistently reveal that military families who work with a financial advisor feel more secure with their finances and confident in the future than their do-it-yourself colleagues. Working with a financial advisor is an effective way to respond to the uncertainties of sequestration and defense downsizing.”

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. http://www.firstcommand.com/fbi/

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.

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160229006551/en/

First Command Financial Services
Mark Leach, 817-569-2419
Media Relations
[email protected]

Source: First Command Financial Services

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