How to Plan for Military Retirement
The military teaches discipline and cohesion when you first set foot in boot camp. These attributes are not only important on the battlefield--they are fundamental to a successful retirement that leaves you wanting nothing. You must budget, invest and spend your money wisely before military retirement so that your pension and benefits are enough to maintain the life to which you are accustomed.
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Instructions
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Create a budget that takes into account all of your monthly expenses, income and miscellaneous emergencies. Part of creating a stress-free military retirement is planning. Your budget should set aside a certain amount per month for savings. You can create a set dollar amount, or devote a percentage of your leftover money at the end of the month. Stay organized with your budget. Use a spreadsheet or budget program that keeps your finances up-to-date.
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Place some of your money into a 401K account with the military. A 401K account acts like a savings account in many ways, except that you can deduct your contributions to the account on your taxes at the end of the year.
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Invest in low-risk financial options. Certified Deposits (CDs), Roth IRAs, mutual funds and bonds offer investment opportunities geared toward long-term growth. Unlike savings accounts, you cannot take money out of most investment plans without a monetary penalty. Many investment options are FDIC insured to prevent loss in the event of economic collapse.
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Pay off any outstanding secured and unsecured debt before you retire from the military. Secured debts include house and car payments while unsecured debts include loans and credit cards. Debt during retirement can strain your fixed income. Military pensions are a percentage of your highest average base pay. Paying off debt before retirement will let you have more freedom with your income later on.
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Check with your military adviser before seeking employment after the military. Depending on the position and company, you may not be allowed to receive a military pension concurrently. Additionally, positions in foreign governments are only allowed with special approval from Congress. Do not risk losing your pension by accepting positions without consulting your military adviser.
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References
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