Building a nest egg takes discipline—something in which military members are well-versed. And it shows in their recent savings contributions.
When it comes to retirement, long-term and short-term savings, career military families are sitting pretty compared to the general population. In fact, middle-class servicemembers out-save their civilian counterparts by a monthly average of 56 percent.
The general population was only saving around $1,099 a month during the first quarter of 2018, according to the First Command Financial Behaviors Index. Meanwhile, military families were putting away about $1,715.
The Index further examined savings by account type, finding servicemembers outpaced the general public in every instance:
- Retirement savings (an average of $743 per month versus $466),
- Long-term savings ($495 versus $288), and
- Short-term savings ($477 versus $345).
Their admirable saving habits are translating into a higher degree of financial confidence to boot.
“Three out of five military respondents (59 percent) report feeling extremely or very confident in their ability to retire comfortably. That compares to just 36 percent of the general population. Service member families are also more likely to feel extremely or very confident their financial situation will improve in the next year (63 percent versus 42 percent),” First Command noted in its report.
Amidst a sea of studies suggesting most Americans are financially stressed and in need (and want) of financial wellness programs, military families’ current situation is somewhat of an anomaly.
However, the report points out that servicemembers and civilians are pretty much neck-in-neck when it comes to total accumulated savings. According to the Index, military families have an average of $299,654 in combined retirement, long-term and short-term savings, compared to $288,096 in nonmilitary families’ accounts.
With overall savings balances on par with one another, why are civilians less optimistic about their financial outlook than the military? And how do servicemembers have so much extra money lying around?
It might have to do with the current state of health care, says one expert.
“Many U.S. families are not feeling very secure financially, which may be due in part to concerns over the high cost of health insurance,” Scott Spiker, chairman/CEO of First Command Financial Services, Inc., said in a statement. “Roughly half of the general population respondents report the cost of health insurance as one of their top financial concerns. That compares just three out of ten military families.”
“At the same time, the end of sequestration is helping to ease anxiety in service member households,” Spiker goes on to explain. “These families are feeling more confident and financially stable, and they are maintaining their commitment to savings and limited spending.”
Jessa Claeys is a writer, editor and graphic designer.
