How to Live on a Military Pension

Pensions are offered to military personnel based on length of tenure in the military.

Your military pension is an invaluable resource for your retirement. The pension is a way for the United States to thank you for your 20 or more years of military service while ensuring that you do not have to totally rely on a civilian job later in life.

Instructions

1. Pay off debts and credit obligations before you retire on your military pension. If you have outstanding credit cards, loans, car payments or a mortgage, your military pension will be stretched. The benefits of paying off debt obligations include lower interest payments and the freedom to enjoy your retirement without using most of your income for fixed expenses. Remember, your military pension will be half of your usual military income; spend that extra income on your debt obligations before you live entirely on a pension.

2. Apply for part-time opportunities that interest you once you retire. You do not have to apply for positions immediately after you retire, but the extra income will be beneficial. For example, if you are a fishing enthusiast, you could offer to give fishing tours. You will have a lot of free time on your hands once you retire from the military career.

3. Invest in money-making opportunities using your military pension so that your income becomes less "fixed" over time. For example, opening a mutual fund or savings account is a way for your pension to make more money. A mutual fund with a low-risk, long-term growth strategy will steadily increase the original amount you invested. Invest a percentage of your pension that is appropriate for your budget. If your pension is your only income source, you must still have enough money to live at the end of the day.

References

• The Military Wallet: Military Retirement
• U.S. Securities and Exchange Commission: Mutual Funds