A new study by the Employee Benefit Research Institute and Greenwald Research suggests that military households are in a stronger financial position and exhibit more confidence in their retirement prospects compared to their non-military counterparts.
Drawing from the 34th Annual Retirement Confidence Survey, the report found households that include veterans, their spouses, partners, or those they widowed outdo other families on several financial fronts.
Military households are more likely to have substantial financial assets and are less troubled by debt. Nearly half (49 percent) of military households reported having $250,000 or more in financial assets, compared to 40 percent of non-military households. What’s more, 55 percent of military households indicated that debt is not a problem, in contrast to 46 percent of non-military households.
Those findings in stark contrast with other research by the National Foundation for Credit Counseling, which found active duty military personnel and their loved ones are more likely to struggle with their finances, miss credit card payments and turn to payday loans.
The survey found military households are more proactive in their retirement planning with 52 percent considering how much money to withdraw from their retirement savings, compared to 42 percent of non-military households.
The gap also extends to other aspects of retirement, including how they’ll spend their time in retirement (68 percent of military households vs. 58 percent of non-military homes), estimating health expenses in retirement (50 percent vs. 41 percent), estimating monthly income needs (63 percent vs. 54 percent), and having contingencies for emergencies (47 percent).
The survey also found a split in retirement confidence particularly in higher-income households with nearly nine-tenths (89 percent) of military households above the $75,000 income threshold feeling optimistic that as far as their finances are concerned, they’ll live comfortably in retirement – significantly more than the 81 percent of non-military households in the same income bracket.
The story was much the same for middle-income households, those taking home between $35,000 and $74,999, as 72 percent of military and 61 percent of non-military households reported a financially confident outlook for their retirement.
The vast majority of military households, 90 percent, didn’t feel that military service crippled their ability to save for retirement. However, they may face an awkward path to retirement, with 71 percent saying they separated from service before reaching military retirement and 6 percent retiring for medical reasons.
“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,” Lisa Greenwald, CEO of Greenwald Research, said in a statement.
“The transition [from military service] requires knowing what to do with their retirement savings, past and future, as they switch careers,” Greenwald said.
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