May Is Military Appreciation Month: 5 Financial Tips For Every Military Family
In honor of Military Appreciation Month, we’re recognizing those in the military as well as their families. Military members and their families face one-of-a-kind challenges, such as deployment to conflict zones, overseas assignments and the constancy of change - all of which make dedicating time to personal finance a challenge. Luckily, there are special tax breaks and other benefits unique to service members. Follow these five tips to take advantage of potential benefits and simplify your military family’s personal finances.
Tip #1: Focus on Retirement Savings
The Thrift Savings Plan is one way to save for retirement that's specific for military members. You may also have access to a Roth TSP, which acts similarly to a Roth IRA but without income restrictions. By contributing to a Roth TSP, you don't lower your taxable income now, but you will be able to withdraw the money tax-free when you enter retirement.
Tip #2: Save with High Interest
The Savings Deposit Program allows eligible personnel serving in designated combat zones to deposit up to $10,000 and earn up to 10 percent in annual interest.1 This can be an effective way to get a boost on your savings for the future. By comparison, it's not uncommon to find savings accounts at various banking institutions that offer less than one percent in annual interest rates.
Tip #3: Tax-Free In, Tax-Free Out
Saving in a Roth IRA may be a good idea if you receive tax-free combat-zone pay. This allows you to deposit tax-free income and take tax-free qualified withdrawals in retirement. You can also withdraw contributions to a Roth IRA at any time, without the income taxes or penalties.
Tip #4: Take Advantage of Your Education Benefits
The Post-9/11 GI Bill covers the full cost of in-state tuition, up to 36 months, plus housing fees and $1,000 a year to use for books and supplies.2 You can even transfer these benefits to your spouse or children if you don’t plan on using them yourself.
Tip #5: Low-Cost Life Insurance
Backed by the Department of Veterans Affairs, the Servicemembers’ Group Life Insurance protects your family with low-cost term life insurance coverage. If you are an eligible service member, you may be automatically enrolled in this program.3 Depending on your status or branch, you may have other life insurance options available to you as well. If you haven’t already, you’ll want to review your options and determine whether or not your coverage is up-to-date.
More Ways to Maximize Your Money
Aside from specialized programs and offerings, there are a few things every military family can do to help get or keep their financial standings in order.
Like any mission, success begins with articulating goals you want to pursue. Make sure they’re measurable, attainable and timely.
Establish a Budget
A budget can serve as the foundation of financial discipline. Having a weekly or monthly budget set in place can help you control spending impulses that lead to greater debt levels.
Pay Yourself First
Determine how much money you need to set aside to reach your savings goal, deduct this amount from your paycheck and budget yourself to live within the limits of what remains.
Establish an Emergency Fund
Uncertainty marks the life of military families, so be sure you have an emergency fund that allows you to be as prepared as possible for these changes.
Control Your Debt
Indebtedness is one of the enemies of financial independence. Focus your efforts on paying down high-interest debt, like credit cards or personal loans.
As you think through your financial goals, remember that taking action today is your first and most important step. Take advantage of all your unique benefits and opportunities, so that you and your family can live your best financial life.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
This information is intended to be educational. Hicks & Associates Wealth Management does not provide tax or legal advice. You should consult with a qualified tax, legal or financial professional before making any decisions.
Investment advisory services are offered through WealthShield Partners, LLC (“WSP”), an investment adviser registered with the Securities and Exchange Commission, doing business as Hicks & Associates Wealth Management. Registration as an investment adviser does not imply a certain level of skill or training. More information about WSP can be found in Form ADV Part 2 which is available upon request.
Past performance is no guarantee of future returns. WealthShield Partners, LLC reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The visuals shown are for illustrative purposes only and do not guarantee success or certain level of performance. This material contains projections, forecasts, estimates, beliefs and similar information (“forward looking information”). Forward looking information is subject to inherent uncertainties and qualifications and is based on numerous assumptions, in each case whether or not identified herein.
This information may be taken, in part, from external sources. We believe these external sources to be reliable, but no warranty is made as to accuracy. This material is not financial advice or an offer to sell any product. There is no guarantee of the future performance of any WealthShield Partners, LLC portfolio. The investment strategies discussed may not be suitable for all investors. Before investing, consider your investment objectives and WealthShield Partner’s charges and expenses. All investment strategies have the potential for profit or loss.