It’s safe to say that no one dedicates their life to the military to become rich. Instead, the men and women of our armed services are dedicated to protecting our freedoms. Given the unpredictable nature of military service members’ jobs, their spouses often are the glue in the family and face unique challenges (permanent change of station moves, everyday household operations and money management, etc.). Simultaneously, they often work or search for employment to earn a second income to support their financial goals, including retirement. However, for the last decade military spouses, a 90% female population, have experienced an unemployment rate that is six times higher than their civilian counterparts—and the effects of military spouse unemployment go deeper than most know.
A new survey, The Hidden Financial Costs of Military Spouse Unemployment, conducted by Hiring Our Heroes (HOH) in collaboration with Syracuse University’s D’Aniello Institute for Veterans and Military Families (IVMF) and First Command Financial Services*, shines a light on the financial consequences of being a military spouse. The research shows that military members’ service is negatively affecting the ability of their spouses to maximize employer-sponsored retirement benefits, build their long-term financial futures and find careers that offer competitive salaries equivalent to their professional experiences and/or education levels. The key takeaway from the survey? The time is now for employers, policymakers, and support organizations to do their part to lessen the financial costs of military spouse unemployment.
As leaders within the military and financial services communities, we have a uniquely informed perspective about the plight of the military spouse, particularly as it relates to unemployment and financial security. Hiring Our Heroes, an initiative of the U.S. Chamber of Commerce Foundation, connects the military community—service members, military spouses, and veterans—with American businesses to create economic opportunity and a strong and diversified workforce. And First Command’s Financial Advisors, 84% of whom are veterans or military spouses, create tailored financial plans and coach our Nation’s military families in their pursuit of financial security. At both organizations, we witness first-hand how military spouse employment challenges affect their overall financial security.
Uncovering Hidden Costs
Military spouses struggle to find employment at their experience and/or education level and often experience gaps in their work history. The findings of the survey show that 32% percent of active-duty spouse respondents report being unemployed even though 76% have a bachelor’s degree or higher. Fifty-nine percent of respondents also report a total of three or more years of not working full-time, and 40% of respondents report leaving their last employment place three years ago or longer. All said, 90% agree or strongly agree that their spouse’s military service negatively affects their career. Before military spouses can begin to think about their financial futures, they need the opportunity to find and maintain meaningful careers. Without a second income, military families experience considerable uncertainty when it comes to their retirement. Notably, respondents who do not experience a gap in full-time employment are twice as likely to report confidence in maintaining their standard of living in retirement compared to those who stop working.
Access to employer-sponsored retirement plans tremendously impacts a military spouse’s confidence in their post-retirement standard of living. More than half of active-duty respondents report never or rarely being able to fully vest in their employer sponsored retirement benefits because they were not with an employer long enough to qualify. The Covid pandemic, childcare and frequent moves were cited as reasons for remaining with employers long enough. As one might expect, respondents who frequently took full advantage of employer-sponsored retirement benefits were more likely to feel very or extremely confident in their ability to maintain their standard of living in retirement.
Military spouses are highly educated, possess a strong work ethic and play key financial planning roles in their own families. However, many respondents lack confidence in managing their investment and retirement accounts. Thirty-three percent of respondents note that they do not understand civilian retirement savings plans at all or not very well, and 37% somewhat understand. Nonetheless, only 28% work with a financial planner and 49% do not, but want professional financial guidance, which is especially important for those saving for retirement without employer-sponsored benefits.
Charting a Path to Empower Military Spouses
We can open doorways for military spouses to have greater access to employment, which directly affects their financial security into retirement. Following are just a few ways to support military spouses in their pursuing long-term financial security.
- Increase remote and portable work opportunities for military spouses so they can grow in tenure, pay, and take advantage of employer-sponsored retirement benefits.
- Create more opportunities for military spouses to participate in employer-sponsored savings plans that have more flexible vesting requirements and do not penalize military spouses when they quit their job due to a permanent change of station (PCS) military-related move.
- Continue to promote available free or low-cost financial education and financial planning services to help military spouses understand the importance of saving for retirement, creating a retirement savings plan, and reaching their retirement goals.
The Hidden Financial Costs survey findings uncovered the degree to which employment affects military spouses’ ability to achieve long-term financial security for themselves and their families. We implore employers, policymakers and support organizations to create consistent employment for steady income, offer access to employer-sponsored retirement benefits, and provide financial planning and education to grow military spouses’ long-term wealth. Military families make great sacrifices to safeguard our freedoms. Let’s work together to give military spouses the opportunity to have long-term financial freedom.
©2022 First Command Financial Services, Inc. is the parent company of First Command Brokerage Services, Inc. (Member SIPC, FINRA), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank. Securities products and brokerage services are provided by First Command Brokerage Services, Inc., a broker-dealer. Financial planning and investment advisory services are provided by First Command Advisory Services, Inc., an investment adviser. Insurance products and services are provided by First Command Insurance Services, Inc. Banking products and services are provided by First Command Bank (Member FDIC, Equal Housing Lender, Equal Housing Opportunity, NMLS 562238).
Securities 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 benefit program, the U.S. government, the U.S. Armed Forces or any other third-party mentioned on this site.
In the United Kingdom, investment and insurance products and services are offered through First Command Europe Ltd. First Command Europe Ltd. is a wholly owned subsidiary of First Command Financial Services, Inc. and is authorized and regulated by the Financial Conduct Authority. Certain products and services offered in the United States may not be available through First Command Europe Ltd. In Germany, we provide financial planning services through Financial Planners associated with First Command Europe Ltd.
The First Command Educational Foundation is a separate 501(c)(3) public charity and is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.