Do Military Households Have Misconceptions About Retirement? Here’s What They Said in a New Survey

From building a solid financial foundation to preparing for emergencies and planning for retirement, the results of a recent survey confirmed that military service can translate to a better financial position.

The Employee Benefit Research Institute released its 34th Retirement Confidence Survey (RCS) in July, and the participants included more military and veteran households than in most years. Most of the findings were positive as they relate to the military community.

Here, I’m going to look at what I think are several interesting takeaways from the survey. A few of them represent long-lasting trends in attitudes and beliefs surrounding retirement, some of which I find puzzling. A couple just struck me as fodder for consideration as you evaluate your own financial and retirement readiness.

Let’s take a look.

Reliance on Social Security

A surprising number of respondents from all backgrounds said they believed Social Security will be a “major” element of their retirement income. That had me scratching my head. I’m not suggesting it won’t be there -- rather wondering what “major” means. It could just be the wording, but if the 2024 average benefit of about $22,000 annually equates to “major,” the bar that many respondents are setting could be quite low.

It was also interesting to see that 76% of military-affiliated respondents were considering their Social Security claiming strategy. Planning is good. However, I was a bit surprised that so few retirees who participated in the study waited or planned to wait until age 70 to begin claiming Social Security. Sometimes the growth through “delayed retirement credits” that can accrue until age 70 makes sense -- specifically in situations in which a spouse doesn’t earn significant benefits based on their own work record. In such situations, claiming later can provide significantly enhanced survivor benefits.

Cost of Health Care

Apparently, health care is not a concern. That’s probably not the case if the headlines of the day tell the tale. However, only about half the respondents had attempted to estimate what their health-care expenses will be in retirement. Those findings run contrary to my own experience. Typically, folks who have retired from the military are extremely grateful for the Tricare benefits they have earned. Furthermore, those who don’t have it are concerned about health care from both an expense standpoint, as well as a retirement timing standpoint. In any case, it should be a significant planning factor.

Millennial Advantage

Younger is better, in terms of the survey results. Millennials were ready for “the next phase” to come a lot earlier than previous generations (not likely) and more concerned about their potential and possibilities when it comes to living their best lives. They are planning more than other generations. According to the survey, military millennials were significantly more likely than all other respondents to have calculated how much they will need to have saved by the time they retire. Impressive.

Working in Retirement

In a “plan vs. reality” moment that has long been a feature in the survey results, a lot more working-age folks from both the military (71%) and civilian (76%) communities believe they will work for pay in “retirement” than actually do. Only 38% of military-affiliated respondents and 28% of their civilian counterparts who are in retirement actually said they do it.

There’s certainly nothing wrong with the concept, and there are definitely benefits, but don’t base the success of your plan on it. The reality is that a lot fewer do it than anticipate doing it.

Saving Money Now

In a highlight of the survey for me, 93% military-affiliated respondents reported contributing to a retirement plan at work. That’s pretty darn impressive. When you look at those currently serving, you see from Thrift Savings Plan statistics that about 83% participate. Those habits obviously continue post-service.

If you have time, jump onto the Employee Benefit Research Institute’s website and take a look at the plethora of information that is available. You may see something that spurs you to action.

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