By Matt Samson, CPWA®
Many retirement planning tips for civilians don’t serve the needs of military service members. These retirees must consider factors like pension structure, healthcare access, disability compensation, and transitional services.
If you’re a veteran or a current service member closing in on retirement age—or even if it’s still years away—it’s time to learn about military financial planning and retirement.
1. Know Your Benefits
Military and Veteran benefits work alongside your retirement funds and personal savings as the backbone of your financial support in retirement. Have a clear understanding of the benefits you have now and what you might gain after you retire.
If you have access to a support specialist, talk with them about your pension, TRICARE or VA healthcare benefits, VA disability pension, and state benefits you may take advantage of. Verify your TRICARE options and any other perks you can earn in retirement.
2. Review Your Financial Situation
Before settling down for retirement planning, take inventory of all of your investments, savings, debts, credit accounts, living expenses, insurance policies, and retirement accounts. Include your Thrift Savings Plan (TSP) in your total.
If you detect areas where you’re falling behind, speak to an advisor who specializes in military financial planning. They might identify opportunities for building your savings, paying down debt, or generating income.
3. Prepare to Find a Civilian Job (Possibly)
Though some military retirees are ready to relax and settle down, others extend their working lives, whether out of preference or financial need. They may want to change careers, use their skill sets in new ways, or simply earn some extra income.
To find a new post-retirement career, conduct a personal inventory of the education, skills, and certifications you have, as well as your interests. Think about taking vocational classes, enrolling in a trade school, or educational program to fill gaps. Look for certification programs that can enhance your prospects in the job market. Job fairs can be helpful as well. Use your network of fellow veterans to learn of new opportunities.
4. Make a Timeline for Retirement Planning
A big part of retirement planning is establishing a timeline to execute your goals. Your timeline can help you stay on top of responsibilities, mark milestones, and minimize confusion about finances. It can also make transitioning to your next chapter much easier.
Set deadlines for all important functions, including applying for benefits, scheduling medical appointments, inquiring about your DD-214, meeting with a financial counselor, and updating insurance.
5. Consider Moving to a New Location
After their military careers end, many veterans set their sights on relocating. They may be looking for new job opportunities, a more comfortable climate, or a home nearer to family and friends. However, the expenses of relocating can build up quickly.
Research your target destinations; include factors like the cost of living, healthcare amenities, housing and job markets, and recreational opportunities. If you’re thinking about moving to a new state, learn about its tax policies and benefits for military retirees.
6. Lock Down Your Healthcare Needs
Many military retirees switch to TRICARE for their medical needs, which may mark a change from their active-duty years. Check out the different TRICARE coverage tiers to find one that fits your needs and budget. Consider how these plans work with Medicare. Some veterans are also eligible for VA healthcare, so research all possibilities when retirement planning.
7. Develop a Tax Strategy
Most retirement income is taxable at the federal level, and your state may tax it as well. To cover all the bases, set aside some of your monthly income for tax payments at the end of the year. If you take on a new career in a civilian capacity, remember to include that salary in your taxable income along with your military pension. Ensure you have a solid understanding of how your VA disability pension may affect your taxable income.
By developing a clear understanding of your post-retirement tax exposure, you can help avoid unexpected liabilities.
Retirement Planning With ILS Financial
Are you looking for a financial advisor who keeps clients at the center of the financial planning process? ILS Financial focuses on the financial needs of military members, veterans, and their families. Watch this quick video where I explain what the client experience looks like.
To find out how we can help you, contact us online, call (402) 281-0447 or email matt.samson@ilsfinancial.com.
About Matt
Matt Samson is a financial advisor at ILS Financial, a financial services firm based in Omaha, Nebraska, empowering military members and veterans toward financial freedom. In his role, Matt is dedicated to serving clients with tailor-made financial strategies that help them work toward work-optional lifestyles. He values the trust his clients place in him and thrives off helping them live out their dreams and enjoy less stress. He is proud to have the opportunity to be a positive influence on the individual’s life, their family members, and possibly for generations to come.
After a distinguished career spanning over 21 years of active and reserve service as a United States Marine, in 2015, Matt made the transition from military service to financial planning, discovering his true calling as a financial advisor. His passion led him to establish ILS Financial—a place where he could leverage a refined and structured process to design and help clients pursue the lifestyle of their dreams.
Matt holds a Bachelor of Science in Actuarial Science from the University of Nebraska – Lincoln, an MBA from the University of Nebraska – Omaha, and a Certificate in Wealth Management Theory and Practice from the Yale School of Management. He also obtained the Certified Private Wealth Advisor® certification from the Institute of Investments and Wealth. Matt continues to proudly serve our nation as a member of the United States Marine Corps Reserves, where he currently serves as a Space Operations Officer. Outside of the financial world, Matt enjoys spending time with his wife, Laura, and their three sons,30730 Brayden, Connor, and William. A big sports fan, he engages with his local sports community as a coach for high school football, youth football, and travel baseball. To learn more about Matt, connect with him on LinkedIn.
Advisory services are offered through ILS Financial LLC, an investment advisor in the state of Nebraska.
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