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Military Retirement Planning: Serving Your Country and Yourself

Military Retirement Planning: Serving Your Country and Yourself

October 23, 2017

When it comes time to prepare for retirement, veterans and their families have many resources available to them. Those resources include pensions, a civilian income, Social Security (or possible disability income), VA healthcare and tax-advantaged savings.

Once you have determined what military benefits are available to you and established your eligibility, you’re well on your way to putting together a solid retirement plan.  By combining military offerings with Social Security income, savings plans and annuities you will be one step closer to a secure future.

Military pension plans provide a pension equal to 50% of salary after 20 years of service but 50% of pay is likely not enough income with which to live a comfortable life. While it may be a good amount, it is still not adequate and this is exactly why veterans and military members need to take retirement planning seriously. Not to forget the fact that most military members don’t serve 20 years and are therefore not entitled to receive retirement benefits.

Also, VA payments are not considered to be a source of income and hence they are tax-free. So veterans who are entitled to receive benefits do not qualify to contribute to an IRA. They can, however, take advantage of other retirement savings options.

For all these reasons, it is necessary that veterans and military members plan their retirement regardless of whether they serve the military or separate from it to join a different sector.

Entering a different income-producing sector either private or non-profit, can provide daily cash flow needs, allowing your retirement dollars to be stockpiled and/or redirected. If your new job provides adequate income to live on, you can leverage the power of compounding with your military retirement dollars.

At One Financial Services, we are proud to assist our veterans and those currently serving, to evaluate your needs. We’ll help you think through issues like, “Should you use your pension now or let it compound and build?” If you take your pension, can you make it work harder by using it to make other investments?” What about benefits; “Does your private sector position offer top-tier benefits, do you have good medical insurance, is your family protected by life insurance?”

You’ve served our country; now let the One Financial Services team serve you by helping you find the answers to all these questions and more.