Military households are more likely to have higher assets and less likely to consider debt a problem compared with non-military households, according to a new research report published today by the Employee Benefit Research Institute (EBRI) and Greenwald Research.
“Military households seem to be in better financial shape and are more likely to be confident in having enough money to last throughout retirement…”
EBRI’s Craig Copeland
Forty-nine percent of military households report having $250,000 or more in financial assets compared with 40% of the non-military households having this amount. Fifty-five percent of military households consider debt to not be a problem, while 46% of non-military households consider debt to not be a problem.
The report also found military households—those in the higher two income groups ($35,000-$74,999 and $75,000 or more) specifically—are more likely to be confident about their retirement prospects than non-military households.
Specifically, 89% of military households with incomes of $75,000 or more are confident that they will have enough money to live comfortably throughout their retirement compared with 81% of their non-military counterparts. For the middle-income group, 72% of military households vs. 61% of non-military households are confident in their retirement prospects.
“Military households seem to be in better financial shape and are more likely to be confident in having enough money to last throughout retirement as well as various other aspects about retirement than non-military households,” said Craig Copeland, director, Wealth Benefits Research, EBRI. “These households are more likely to have saved for retirement, to have done various other tasks to prepare for retirement and to be currently collaborating with a financial advisor. Finally, an overwhelming share of individuals [9 in 10] agree that their military service did not prevent them from saving for retirement.”
The research found military households are more likely to have thought about how much money to withdraw from their retirement savings and investments in retirement (52% vs. 42%), thought about how they will occupy their time in retirement (68% vs. 58%), calculated how much money they would likely need to cover health expenses in retirement (50% vs. 41%), estimated how much income they would need each month in retirement (63% vs. 54%), and planned for how they would cover an emergency or big expense in retirement (56% vs. 47%) than non-military households.
Military-household respondents are less likely to express concern over various scenarios that could impact Americans’ retirement finances or retirement in general than are non-military households. The scenarios less likely to be of concern to military households include the potentials for rising housing costs, increasing cost of living making it harder for them to save as much money, or having to make substantial cuts to their spending because of inflation.
“While individuals in military households appear to be better prepared and more confident in their retirement prospects, many seem to navigate at least one significant change in their careers, as a very high share separate from service before military retirement,” said Lisa Greenwald, CEO, Greenwald Research, referencing a finding that 71% of respondents from veteran households said they separated from service before military retirement, while 24% retired from the military and 6% medically retired.
“While military service can put individuals on a better track, they still face many of the same issues as those who have not served, such as determining when to retire, accumulating and preserving assets, and managing income sources for retirement.”
Lisa Greenwald, CEO, Greenwald Research
“The transition requires knowing what to do with their retirement savings, past and future, as they switch careers. While career changes happen to many Americans, it’s certainly imaginable the change for military personnel is more complex and may include learning about a whole new set of retirement and financial wellbeing benefits,” Greenwald added. “While military service can put individuals on a better track, they still face many of the same issues as those who have not served, such as determining when to retire, accumulating and preserving assets, and managing income sources for retirement.”
The Retirement Confidence Survey is conducted annually by EBRI and Greenwald Research. The 2024 survey—and 34thannual—of 2,521 Americans was collected online from Jan. 2-31, 2024. The survey included 1,255 workers, 1,266 retirees and an oversample of 829 respondents from military households (330 workers and 499 retirees). To view a 2024 RCS military households summary report, visit www.ebri.org/retirement/retirement-confidence-survey.
The 2024 survey was made possible with support from American Funds/Capital Group, Ameriprise Financial (Columbia Threadneedle), Bank of America, Empower, Fidelity Investments, FINRA, Jackson National, JPMorgan Chase, Mercer, Mutual of America, Nationwide, National Endowment for Financial Education, PGIM, Principal Financial Group, T. Rowe Price, USAA and Voya Financial.
A special webinar detailing key findings and insights from the report will be held on Thursday, July 25, at 2 p.m. EDT. Registration for the event for EBRI members is available here.
SEE ALSO:
• EBRI Finds ‘Substantial Growth’ in Retirement Plan Ownership, Assets
• Military Families Face ‘Financial Readiness’ Gap