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First Command: Q3 2009 Federal Employee. First Command Financial Behaviors Index. Research Design. Survey 15-minute interview with federal employee households N = 412 (September ‘08 N = 412; March ‘09 = 414) Margin of error: +/- 4.8% Primary Objectives:

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First Command: Q3 2009 Federal Employee

First Command Financial Behaviors Index

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Research Design

  • Survey
    • 15-minute interview with federal employee households
    • N = 412 (September ‘08 N = 412; March ‘09 = 414)
    • Margin of error: +/- 4.8%
  • Primary Objectives:
    • Track financial attitudes, behaviors and intentions among federal employees
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Financial Behaviors Index Insights

Feelings of financial security, financial optimism and retirement confidence have all increased from Q308 to Q309 among federal employees with a financial plan. Interestingly, those extremely / very confident that their financial situation will improve in the future increased from 18 percent in Q308 to 42 percent in Q309 among those with a financial plan, while the percentage of federal employees without a financial plan who are confident that their financial situation will improve has remained relatively constant (23 percent in Q309).

A similar percentage of federal employees (13%) feel very stretched / stretched to the absolute limit as the general population (15%). Notably, only seven percent of those federal employees with a financial plan feel financially stretched in Q309.

While federal employees without a financial plan reported similar feelings of comfort with their current savings in the past year, feelings of comfort have doubled among those with a financial plan. In Q309, 19 percent of federal employees with a financial plan feel extremely or very comfortable with their currently savings compared to only 9 percent of federal employees without a financial plan – a 10-point disparity. A similar disparity exists between the two groups this quarter in terms of comfort with current debt levels.

The percentage of federal employees concerned about the state of the economy has dropped over the past 12 months, from 69 percent in Q308 to 60 percent in Q309. Not surprisingly, federal employees are less likely to be concerned about job security (20%) than the general population (31%). Federal employees are also slightly less likely to feel extremely or very stressed (20%) about the current economic situation than the general population (23%), and they are slightly more likely to believe that the U.S. economy has hit rock bottom and is on its way to recovery (45%) than the general population (41%).

Average amounts put into short-term savings, long-term savings and retirement accounts all increased among federal employees from Q109 to Q309. Strikingly, the amount put into retirement accounts increased dramatically in the current quarter. Federal employees increased their contributions from an average of $749 in Q109 to an average of $1,388 in Q309.

Interestingly, federal employees are significantly more likely to agree with the statements, “It is important to plan for the future by consistently saving and investing a percentage of income” and “Having a financial plan helps provide a sense of security” than the general population, but they are also significantly more likely to agree with the statements, “Financial service professionals pressure people to put away more money than they can afford” and “The fees and costs of working with a financial planner are not worth the benefits gained.”

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First Command Financial Behaviors Index: Attitude, Behavior and Intention sub-indices – Federal employees

The jump in the Behaviors Sub-Index in Q309 is largely due to a 85% increase in the amount put into retirement savings from Q109 to Q309. The amount put into short-term savings and long-term savings also increased.

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Financial Security – Federal employees

FBI02: How financially secure do you feel month to month?

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Financial Optimism – Federal employees

Financial optimism has rebounded among federal employees with a financial plan from Q308 (18%) to Q309 (42%).

FBI02A: How would you rate your confidence that your financial situation will improve in the next year?

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Retirement Confidence – Federal employees

Retirement confidence is also up among federal employees with a financial plan in Q309 (36%).

FBI03: How confident do you feel about your ability to retire comfortably?

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Financially Stretched – Federal employees

Notably, only seven percent of federal employee households with a financial plan feel financially stretched this quarter.

15% of the general population feel financially stretched in September 2009.

FBI04: How financially stretched do you feel month to month?

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Comfort with Current Savings – Federal employees

A greater percent of federal employees with a financial plan feel extremely or very comfortable (19%) than those without a plan (9%).

SAVE: How comfortable do you feel about the amount of savings you currently have?

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Comfort with Current Debt – Federal employees

Feelings of comfort with debt levels remained consistent from Q109 to Q309 in federal employees with a financial plan, but did increase slightly among federal employees without a financial plan.

DEBT: How comfortable do you feel about the amount of debt you currently have?

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Comfort with Current Life Insurance Coverage

Q309 – General Population

Q309 – Federal Employees

LIFE: How comfortable do you feel about the amount of life insurance coverage you currently have?

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Financial Concerns – Federal employees

31% of the general population are concerned about job security in September 2009.

FBI05: Which of the following financial issues concern you the most? | Total Mentioned

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Short-term Savings – Federal employees

FBI06A: How much money did you put into savings and investment accounts last month? Short-term (savings accounts, CDs, liquid money market funds)

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Long-term Savings – Federal employees

The amount of money, on average, federal employees put in long-term savings increased among both respondents with and without a financial plan from Q109 to Q309.

FBI06B: How much money did you put into savings and investment accounts last month? Long-term (stocks, mutual fund, bonds, college savings 529 plan)

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Retirement – Federal employees

The amount of money, on average, federal employees put in retirement savings increased dramatically from Q109 to Q309.

FBI06C: How much money did you put into savings and investment accounts last month? Retirement (401k, 403b, Simple IRA, Personal IRA accounts)

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Savings and Investments Intentions – Federal employees

FPI6d: Will you increase or decrease the amount you put into savings and investments next month?

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Short-term Debt – Federal employees

FBI07A: How much did you pay on your short-term and long-term debt last month? Short-term (car loans, credit card debt, etc.)

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Long-term Debt – Federal employees

FBI07B: How much did you pay on your short-term and long-term debt last month? Long-term (mortgages, student loans, home equity loans/lines, etc.)

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Debt Reduction Intentions – Federal employees

Increase amount pay on debt

Decrease amount carry on debt

FPI7c: Will you increase or decrease the amount you pay on your debt next month? FPI7d: Will you increase or decrease the amount of debt your carry next month?

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Level of Stress About the Current Economic Situation

Q309 – General Population

Q309 – Federal Employees

FBIMar1: Please indicate your level of stress concerning the current economic situation in the United States.

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Has the U.S. economy hit rock bottom and is it on its way to recovery, or will the U.S. economy continue to fall deeper into a recession?

Q309 – Federal Employees

Q309 – General Population

FBIMay1: Has the U.S. Economy hit rock bottom and is on its way to recovery, or will the U.S. economy continue to fall deeper into a recession?

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How long do you think you will continue to cut back on spending?

Q309 – Federal Employees

Q309 – General Population

FBIFeb4: How long do you think you will continue to cut back on your spending? | Among respondents who have cut back

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What has your household experienced?: Q309 – Federal employees

FBIDec1: What, if any, have you or someone in your household experienced as a result of current economic conditions? | Total Mentioned

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How have you cut back in the past year?: Q309 – Federal employees

FBIDec2: How have you cut back in the past year? | Total Mentioned

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Agree / Disagree: Uncertainty

Federal Employees

General Population

FBIMar2-4: Do you agree or disagree with the following statement … ?

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Agree / Disagree: Financial Plans

Federal Employees

General Population

It is important to plan for the future by consistently saving and investing a percentage of income

Having a financial plan helps provide a sense of security

Individuals who have a financial plan are doing the right thing for their financial future

Financial service professionals pressure people to put away more money than they can afford

The fees and costs of working with a financial planner are not worth the benefits gained

Having a financial plan makes it hard to have enough disposable income on a monthly basis

FBIMar5-10: Do you agree or disagree with the following statement … ?

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Agree / Disagree: Control

Federal Employees

General Population

I take pride in being able to do everything myself

I tend not to seek outside advice for the decisions I make in my life

It is important to surround yourself with people who have expertise in areas that you don’t

Delegating responsibility is an effective way to manage

FBIMar11-14: Do you agree or disagree with the following statement … ?

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Agree / Disagree: Fear

Federal Employees

General Population

I am very concerned about losing my shirt in the stock market

Now is a great time to invest in the stock market

I am concerned about getting caught up in a scam and losing my retirement investments

I get a strong sense of security from knowing that my money in the bank won't depreciate in value

FBIMar15-18: Do you agree or disagree with the following statement … ?

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Agree / Disagree: Means Table

* Indicates difference is statistically significant at 90% confidence level

*

*

*

*

*

*

*

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