3 Best Financial Planning Tips for Veterans
From battlefields to boardrooms, our military and public safety professionals are protecting and ensuring the lives of Americans daily, yet we are often surprised to discover that most have not planned adequately for their loved ones now or into the future.
Those in the military and public service have a heightened awareness that we never know what tomorrow may bring, thus being prepared helps ensure our family will maintain the lifestyle they are accustomed to, that your business will be taken care of, and that you can rest assured that not only did you give back while alive that you can leave a legacy that will touch your family and generations to come.
A financial plan is important for every military service member and family.
Their unique lifestyle requires planning for various moves around the country, perhaps moving to another country, providing for a family while on deployment, or transitioning from military life to civilian life.
It’s important to take the time to understand each military member’s unique situation in order to help them best control it.
Officers and senior enlisted personnel retiring on a military pension also face financial planning choices.
They may have tax issues, may not be able to make direct contributions to a Roth IRA if their pension, combined with the income they’re earning in their civilians jobs, puts them beyond qualifying limits.
They may need to understand how their military benefits can be protected and leveraged to work within their overall retirement savings plan.
3 Best Financial Planning Tips for Veterans
A very common misconception is that service members and veterans have a lot of money and do not have to worry with paying bills because everything is provided for them such as food, clothing and shelter.
The reality is that service members do not make a significant amount of money and in some cases have family members that they are supporting.
Financially supporting multiple households due to PCS [Permanent Change of Station] every three years makes it difficult to sell previous homes and can leave service members and veterans with a large financial obligation that is difficult to take control of.
1.Military service members can benefit greatly from using the Thrift Savings Plan.
One of the lowest-cost retirement savings plans available, it lets you either choose one of five index mutual funds or opt to set a target date fund instead. Your contributions to the plan reduce your taxable income.
Deployed personnel are eligible for the military’s Savings Deposit Program, which allows them to invest up to $10,000 for each deployment.
The program lasts for three months following deployment.
Members receive 10% annual interest which is compounded quarterly. Restrictions may apply as to the liquidity of this account while it is in use. Please consult with your benefits coordinator prior to selecting this option.
2.Take Advantage of a Roth IRA
A Roth IRA can be particularly beneficial if you’re receiving tax-free combat-zone pay.
All contributions are tax-free.
Withdrawals from the account may be tax-free, as long as they are considered qualified. (Limitations and restrictions may apply.
Future tax laws can change at any time and may impact the benefits of Roth IRAs.
Their tax treatment may change.)
Speak to a financial professional to see if this option is right for you!
3.Understand Tools for Debt Relief
According to the Financial Industry Regulatory Authority , military service members typically have more credit cards and more costly spending behaviors than civilians.
Yet, military members have some unique programs and rights that can help ease this debt.
For starters, the Service Member’s Civil Relief Act places a cap on the interest rates for any loans that you took out prior to active service.
Unlike civilians, military members are allowed to terminate a house or apartment rental agreement if they have been permanently moved to a new station or will temporarily be assigned to a new base for 90 days or more.
Mintco Financial Independent Financial Advisors for Veterans
One of the most important aspects of helping veterans with their financial affairs is to help them understand their entitlements.
In some cases, veterans are required to seek qualified financial and/or legal advice before making decisions regarding their entitlements.
The complexity and variability of the issues requiring qualified, independent financial advice.
Call 813-964-7100 or 716-565-1300
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