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Partnership with USO PathfinderSM offers military families financial wellness training and support

By Adam Hunter

February 26, 2018

Kylee Durant prepared her family for shock at the supermarket.

Before her husband, a U.S. Army sergeant, transitioned from active duty, Durant took her shopping list off base to see how prices compared to the Army commissary.

“Our grocery bill doubled, and that was just at a normal grocery store,” Durant says. “That’s a pretty big cost for a family with three kids. It’s one of those costs you don’t think about but it has a big impact.”

Kylee’s husband is one of approximately 200,000 servicemembers who will transition out of the military this year, according to the Department of Defense—a number that has held steady following a 2014 peak in troop drawdowns after wars in Iraq and Afghanistan. For these men and women, the switch to civilian life can present significant financial challenges. Many military benefits and discounts designed to lift the financial burden during active service end upon discharge. Even veterans who quickly enter post-military careers find that today’s employer benefits don’t measure up to those provided by Uncle Sam.

In addition, the military’s shift from a traditional pension plan to the new Blended Retirement System (BRS), which combines a defined benefit with a defined contribution plan—means that future generations of servicemembers will have increased responsibility for planning their retirement.

Durant understands these challenges well. Not only is she a military spouse, she’s vice president of Transition Technology and Innovation Programs for the USO’s Pathfinder program, which takes a holistic approach to preparing military families for their civilian lives. Last year, the USO Pathfinder program partnered with Prudential to pilot a free financial education program at a selection of the USO’s more than 200 global locations, and developed an online financial wellness platform.  

Prudential’s Chuck Sevola, vice president and head of Prudential’s Veteran Initiatives office and an Army veteran, hopes the collaboration will serve as a model for public-private partnerships that help military families.

“Our collaboration with the USO allows us to pool expertise and resources to ensure that those who have sacrificed so much to keep our country safe can enjoy long-term financial security,” Sevola says.

The program’s in-person seminars feature presentations from financial professionals on various topics including budgeting, saving, college funding and taxes. They also will address issues unique to transitioning servicemembers such as military pensions and the BRS, options for healthcare, and life insurance available to veterans.

“The USO and Prudential are natural partners,” Durant says. “Both organizations understand the unique challenges military families face and we put our heads together to create programming that was relevant, meaningful, and very accessible.”

Feedback has been positive. According to internal surveys cited by Durant, the program has received a above a 95 percent satisfaction score since inception.

One satisfied Pathfinder program participant? Durant’s husband.

“He ended up getting assistance and figuring out what he wanted to do next, which was actually different than he had thought,” Durant says. The program helped point him toward a career as an FAA-certified airplane mechanic.

Kylee and David Durant (left), Prudential Financial Advisor Arthur Bush (right)
Kylee and David Durant (left), Prudential Financial Advisor Arthur Bush (right)

Prudential Financial Advisor Arthur Bush, who left active duty with the Army in 2015 and is currently a first lieutenant and operations officer with the Georgia Army National Guard, offers financial counselling to hundreds of military servicemembers a year. Bush says, that while servicemembers often build a bigger nest egg than their non-military peers, they deal with the same financial uncertainties in today’s economy.

“The previous generation had less financial education and fewer resources than we have today,” Bush says. “However, they had a greater dependence on military and employer pensions than what future generations will have.”

Many of the questions he gets from his military clients are about the Blended Retirement System. Servicemembers active as of year-end 2017 are grandfathered into the traditional pension system, but many will be eligible to opt into the BRS. Depending on age and time of service, some may benefit from opting into the new system. The Department of Defense offers a BRS comparison calculator to help servicemembers decide.

“If you’ve been in for 12 years-plus, it may not make sense to opt-in to the BRS, because the legacy pension will likely pay you a higher benefit,” Bush says. “But the new system can be attractive for younger servicemembers because of compounding interest on allocations they make toward their Thrift Savings Plan and the fact that the military will match a percentage of your contributions, like many of our civilian employers do.”

The new system makes programs like the USO Pathfinder-Prudential partnership all the more important.

“These men and women, their focus is not on the market, it’s on defending the Constitution of the United States of America,” Bush says. “They can’t all take the time to understand what funds are available in the Thrift Savings Plan and how they can truly influence their retirement. Because of that, it’s just another added stress.”

For Military Saves Week (Feb. 26 through March 3), both Durant and Bush urge servicemembers to take the opportunity to sit down and discuss a financial strategy with their family and an advisor.

“Spouses need to talk to each other and a financial advisor about what pensions they have and what the benefits are going to be,” Bush says. “One problem we run into more often than we should is servicemembers not knowing that their pension might not be spousal, and that income may not continue after they pass away. It’s very easy to avoid, if they make the right election or do some strategic insurance planning.”

 “The one big thing the USO Pathfinder program encourages is to think ahead,” Durant says. “Start thinking about your financial plan 12 months prior to transition. How much savings do you need? What is your civilian budget going to look like? Even the little tiny steps—like not shopping at the commissary anymore—can better prepare you for your next chapter.”

For more information about USO Pathfinder, visit USO.org/pathfinder

For media inquiries about the USO Pathfinder-Prudential partnership and the financial challenges faced by military families, please contact Alicia Rodgers Alston.

The Prudential Insurance Company of America Newark, NJ

0315329-00001-00

Contact(s)

Alicia Rodgers Alston
973-802-4446
alicia.rodgersalston@prudential.com