Finance Blog

Retirement Planning Tips for Military Personnel

Written by Steve Repak on November 1, 2013 in Retirement  |   6 comments

November is Military Family Appreciation Month , and Veterans Day is Monday, November 11. Servicemen and women face many unique financial challenges, and planning for retirement is one of them. No matter if this is your first enlistment or your last, the fact of the…

retirement planningNovember is Military Family Appreciation Month , and Veterans Day is Monday, November 11. Servicemen and women face many unique financial challenges, and planning for retirement is one of them.

No matter if this is your first enlistment or your last, the fact of the matter is that anyone who serves in the military will eventually have to leave. Don’t fret, though—the military instills many great traits that you can carry over to the civilian world.

Case in point: You are trained not to allow your emotions to affect the way you perform on the battlefield. That same mindset will also help you follow your investment strategy when the market fluctuates. How about planning? In the military, planning is a skill that every leader must master in order to accomplish the mission, and these same steps can be used for retirement planning.

Here are four tips that military personnel can use to start planning for retirement.

1.     Take charge of your money.

Nobody is going to be more concerned about your money than you. That means you have to take charge (or in civilian lingo, accept responsibility) and be proactive instead of reactive.

Think of your money like your soldiers—except that instead of your soldiers taking care of you on the battlefield, it will be your money taking care of you on the financial battlefield. Your money will require constant supervision, direction, and care.

2.     Eliminate (or at least reduce) your debt.

It doesn’t take a general to understand this concept: You will need less money to live on during retirement if you have little or no debt. If you are still making a house payment or one or two car payments, your pension will be stretched pretty thin.

Put a plan together so you can eliminate all of your debt. Consider meeting with a personal financial manager on your post, base, or installation.

3.     Fully funded short-term savings.

While you are working, most experts recommend that you have at least three to six months of your monthly non-discretionary spending in a liquid account, separate from your checking and your long-term savings.

When you’re planning for retirement, you will need to increase that cushion to at least 18 months of your non-discretionary spending. In the military, you are taught to plan for the worst so you are prepared for anything that comes your way. The same applies to your retirement.

4.      Take advantage of resources and networking.

Let’s assume you have completed enough time in service to start receiving your pension once you get out. Keep in mind that your pension likely won’t be enough on which to live. That means you will have to find either a part-time or full-time position, depending on your cash flow, in order to move successfully to the next stage of your life.

Take advantage of Military OneSource or Transition Assistance Program (TAP) service providers. Both are designed to help service members and their families by providing resources and information to make the transition to civilian life a little less painful.

For retirement, preparation is key. You should feel confident that the traits and tools your military training instilled in you are the same ones that will help you take charge of your money and properly prepare for retirement.

Steve Repak, CFP®, is the author of  Dollars & Uncommon Sense: Basic Training for Your Money.


  1. SGM (R) says:

    I am thankful that I stayed in for over 26 years and receive my monthly retirement check. My civilian counterparts are not as lucky. Definitely take advantage of all the programs and the assistance that is offered.

  2. PFC Cole says:

    I have only been in the service for a few months. Which is better, the Roth TSP or the regular one?

    • EFX Moderator, KB says:

      PFC Cole, good question. One is not necessarily “better” than the other. There could be situations where one might make sense but the answer depends on your individual situation. TSP.Gov has a Contribution Calculator that can provide a side-by-side comparison of a traditional TSP and a Roth TSP to see which one might be right for you: https://www.tsp.gov/whatsnew/roth/compareRoth.shtml

  3. JC in NC says:

    Are the Lifecycle funds any good? There are a bunch of choices in the TSP and I don’t know which fund is right for me.

    • EFX Moderator, KB says:

      JC in NC, that is a great question. There is NO one size fits all answer. The TSP has 6 Funds to choose from: the G Fund, F Fund, C Fund, S Fund, I Fund and the Life Cycle Funds called the L Funds. Each fund has its own risk, fees and objectives to evaluate. You can go to https://www.tsp.gov/investmentfunds/fundsoverview/comparisonMatrix.shtml to view the Fund Comparison Matrix, and you may want to consider meeting with a personal financial manager on your post, base, or installation for more information.

  4. John in Georgia says:

    If you want to recognize the “true” millionaires in your neighborhood, look at the the vehicles in the driveway. The guy who has a pickup truck with a ladder on top is probably richer than the guy with a mercedes benz and a boat in his. You don’t have to be wealthy to be able to build your wealth no matter if you are in the military or not.

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