The Finances of Military Families



The American military has been fully voluntary for 45 years. The decision to enter the military, commendable for all, has impact on a family, which must live with the concern that a family member may someday be required to defend the interests of the United States.

There are numerous financial benefits to joining the military, including student loan forgiveness, allowances for housing and subsistence, and extra income for service in the most dangerous posts.  There are also enlistment bonuses and income tax forgiveness, which is extended as an incentive toward military service.

But there are also financial effects and impacts upon a service member and his or her family, and advisors need to understand the particular motivations and pressure that military service members and their families deal with. It is the reason for Spectrem’s new study How Involvement in the Military Impacts Financial Lives.

The study examines a collection of financial attitudes and behaviors among investors who either serve or have served in the military, or have family members who serve or have served in the military. Those attitudes and behaviors are compared to investors who do not have any service members in their family.

One consideration in the study is investors who have children or spouses who serve or have served. The financial impact of serving in the military can reach beyond the service member to extended family, mainly to parents or spouses.

Example of the findings of the study include

·         Risk tolerance – 31 percent of investors whose spouse served in the military are conservative investors, and that is a much higher percentage than the 19 percent who have no family members serving in the military. Even among those investors who themselves serve in the military, only 20 percent claim to be conservative investors. Unfortunately, service members often find it difficult to procure long-term employment with sizable benefits after serving, and investors can become more conservative as investors as a result.

·         Wealth Level – This may tie in with the risk tolerance angle. A higher percentage of investors who have a spouse with a military background are in the lower levels of affluent wealth. Fifteen percent have a net worth under $500,000 and 19 percent have a net worth between $500,000 and $1 million. There is a correlation between wealthy level and risk tolerance; those with greater wealth are more likely to have a higher tolerance for investment risk.  

There is also a difference in advisor usage depending on military service, namely that those who serve or have a family member who served are more likely to have a level of dependence on an advisor.



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Keywords:military, family, spouses, children, investors, advisors, Spectrem