Military service members face unique challenges in their lives, including financial challenges. However, there are also many financial benefits available to military members that can help them protect their future and secure their finances. The following are some of the financial benefits available to military service members.
Retirement saving and investing
Military members are eligible for a retirement savings plan called the Thrift Savings Plan (TSP). This retirement savings plan is similar to a 401(k) plan in the civilian world, allowing service members to contribute a portion of their pay to a tax-deferred account. The TSP offers low fees and a range of investment options, making it an attractive retirement savings vehicle. Additionally, service members who serve for at least 20 years are eligible for a pension.
In addition to the TSP and pension benefits, military members can also take advantage of Individual Retirement Accounts (IRAs). A traditional IRA allows for tax-deferred contributions, while a Roth IRA allows for tax-free withdrawals in retirement. Military members should consult with a financial advisor to determine which IRA option is best for them.
In addition to retirement savings plans, military members are also eligible for a range of other financial benefits. For example, service members receive a housing allowance based on their rank and location. This allowance can help offset the cost of housing, making it easier for military families to make ends meet.
Loan and debt benefits
Military members can also take advantage of the Service Members Civil Relief Act (SCRA), which offers protection and benefits to service members and their families. The SCRA can help military families by capping interest rates on loans and credit cards, allowing them to focus on paying off their debt.
Military members can also take advantage of education benefits, including tuition assistance and the GI Bill. The GI Bill provides financial assistance to military members and veterans who want to pursue a degree or vocational training. The Post-9/11 GI Bill, in particular, provides a generous package of education benefits, including full tuition and fees for in-state public schools, a monthly housing allowance, and a stipend for books and supplies.
Military members are also eligible for a range of insurance benefits. For example, service members can purchase life insurance through the Servicemembers Group Life Insurance (SGLI) program. The SGLI program provides low-cost life insurance coverage, with premiums based on the service member’s age and coverage amount.
Have a comprehensive financial plan
If you are a military service member, be sure to take advantage of the financial benefits that make sense to you. However, you should also be sure to have a comprehensive financial plan to maximize these benefits and ensure you remain on the right financial path. This should include a budget, estate planning, investment strategies, and retirement planning. Talking to a financial advisor can get you started with developing a financial plan that is customized to your financial goals and the needs of your family and loved ones.
Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.