Discover essential financial strategies tailored for military personnel. From optimizing your Thrift Savings Plan and choosing the right investment options to updating estate plans and leveraging military benefits, this guide helps service members secure their family’s financial future and make informed money decisions during and after service. Stay proactive with personal finance insights customized for the military lifestyle.

Financial Planning Tips for Active Duty and Veterans

Serving in the armed forces or having loved ones in the military fosters pride, but the associated long separations can be emotionally taxing. During these periods, securing your family's finances is essential. Proper financial preparation can help you manage unexpected costs or emergencies effectively. By adopting key financial tactics, you can enjoy peace of mind even when deployed or on duty. Here are critical financial practices to help you protect your family's future throughout your military service.

Optimize Your Thrift Savings Plan (TSP)

The TSP functions similarly to a 401(k), offering tax benefits, low fees, and flexible contributions.

You can annually contribute up to $18,000 to your TSP, plus an additional $6,000 if you're over 50. Those deployed in combat zones can contribute up to $54,000 per year to maximize savings. Proper use of your TSP helps establish a solid financial cushion for future needs.

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Explore Roth TSP Contributions

The TSP provides two main options:

Traditional TSP, which lowers your taxable income now but taxes withdrawals later.

Roth TSP, where taxes are paid upfront, and qualified withdrawals are tax-free after age 59½.

Choosing Roth TSP can be especially beneficial if you anticipate being in a higher tax bracket during retirement, making it a strategic move for younger service members.

Review Investment Choices within the TSP

The TSP offers a variety of low-cost investment options, including funds focused on large and small companies, international markets, bonds, and government securities. The Lifecycle Fund automatically adjusts its asset allocation over time to become more conservative as you approach retirement, aligning with your service length.

Update Estate Plans and Utilize Military Benefits

Prepare vital documents such as a will, power of attorney, and healthcare proxy to safeguard your family's interests if you're deployed. Additionally, take advantage of military-specific benefits like Servicemembers’ Group Life Insurance (SGLI), which costs about 7 cents per $1,000 of coverage monthly. Spouse coverage is available up to $100,000 at affordable rates, providing essential financial protection.

Keep Up with Personal Finance News

Stay informed about financial tips and updates by following reputable sources and military-friendly social media channels. Staying current helps you make smarter financial choices throughout your service career.