Today, I am talking about ways our nation's military and their families can deal with financial challenges.
What are some of the financial challenges military families face?1
- Moving often both domestically and internationally.While the service member will have consistent income, it can put financial stress on the spouse or partner as they may have to continuously look for new employment.
- Managing debt. According to a recent survey by the National Foundation for Credit Counseling, twice as many members of the military applied for credit cards as did the general population and nearly 60% carried credit a balance on their cards. Moreover, about 77% of those surveyed expressed worry about their finances.
- Transitioning from military life to civilian life. Not everyone can afford to retire from the military with a pension for numerous reasons. It’s important to be prepared to transitions to a second career both financially and professionally.
What are some financial tips for military service members?
- Take advantage of education benefits
- The GI Bill refers to various education benefits from the Department of Veterans Affairs and includes the following programs:
- Post-9/11 GI Bill
- Active Duty Montgomery GI Bill
- Reserve & Guard Montgomery GI Bill
- Vocational Rehabilitation and Education Program
- Programs available to survivors of service members who die in the line of duty or dependents of disabled veterans:
- Dependents’ Education Assistance
- Fry Scholarship * Source: www.military.com
- Save for your transition to civilian life
- A savings account can help reduce the likelihood of racking up credit card debt during, especially if a job search takes longer than anticipated.
- VA Loans for Home Purchases
- Unlike conventional mortgages that can require up to 20% down, a VA loan is a $0 down payment option available to veterans.
- Consider where you have legal residency
- Different states have different rules for military pay and retirement benefits. Having legal residency in state that does not tax pay or retirement income can have a big impact on finances.
- Take advantage of special retirement and savings plans
- The Thrift Savings Plans has a number of low cost investment options and military service members can deposit between up to $19,000 (plus $6,000 for those ages 50+) depending on their income and deployment status.
- Deployed members can take advantage of a special savings account that allows them to deposit up to $10,000 for deployment and has a guaranteed interest of 10%.
- Consider using a Roth IRA, especially for income received tax-free. when reaching age 59 1/2.
- Look for military discounts
- Hundreds of companies offer military discounts for a variety of different goods and services. These companies can be found on military.com or militarybenefits.info.
- Other Benefits to Consider
- Veterans’ Administration Home-Loan Program has competitive rates and can eliminate the need for a down payment or mortgage insurance.
- The VA offers a number of low-cost life insurance programs for service members and their families’
- Numerous vocational and employments resources from the VA * Source: www.benefits.va.gov
1 individual circumstances varies so the general public should speak with their Financial Advisor to see what strategies are appropriate for them to implement.