As we recognize Veterans Day today and the 19 million Americans who have served in the U.S. military, it’s important to also recognize the more than 1.8 million military spouses who support our active duty servicemembers.
These husbands and wives are the bedrock for their families. Military spouses, often referred to as the CFOs of military households, support their families through relocations and deployments, frequently sacrificing their own career aspirations – and often their ability to save for their own retirement. As Congress considers retirement security legislation, it must consider how to better support military spouses, who serve our country as much as their partners in uniform.
According to the U.S. Department of Labor, 92 percent of military spouses are women. Only 53 percent participate in the labor market, compared to 76 percent of their civilian counterparts. Since military families typically move every two to three years, military spouses often seek flexible, temporary jobs with smaller employers or in the gig economy. Frequently they don’t stay long enough to be eligible for an employer-provided retirement plan or to vest in employer contributions. These factors curb their ability to contribute to employer-provided retirement plans that do a tremendous job of building the savings habit and helping Americans secure their financial futures.
Lawmakers have recognized this challenge faced by military families by including a provision in both H.R. 2954, the Securing a Strong Retirement Act of 2021 and S. 1770, the Retirement Security and Savings Act of 2021, to improve military spouses’ access to retirement options. These bills would provide a tax credit to small employers if they make military spouses eligible for their retirement plan within two months of hire, provide matching or non-elective contributions to the plan and ensure that spouses are 100 percent vested in all employer contributions within the same time frame. Small employers would be able to claim the credit for three years for each military spouse.
We urge support for these thoughtful proposals to increase military spouses’ retirement savings and improve military families’ financial readiness. We look forward to working with policymakers to advance legislation and explore other policies to support our military families.
Kathleen Coulombe serves as the Senior Vice President, Federal Relations, for the American Council of Life Insurers (ACLI). In this capacity, she is actively involved in a multitude of public policy issues on Capitol Hill that impact the life insurance industry.
