Frequent relocations and extended deployments could be difficult for military members, their families, as well as their finances. Fortunately, special benefits programs specifically developed for members of the military could help them in achieving their financial goals, which include paying off loans and tuition fees, and most importantly, saving up enough money for retirement.
To get the most out of your benefits, you need to know how to use your benefits wisely. It’s crucial that you start planning for your future as early as possible to help ensure a comfortable future for you and your loved ones. These basic tips could help you do just that.
You Need to Create a Financial Plan
People actually plan and put the work in to ensure that they’ll have a great future ahead of them. With this in mind, senior planning advisors in Utah specializing in veterans benefits remind to ensure that your financial plan should include these vital elements — how much you need for retirement, when you want to retire, how much you should contribute yearly to accomplish your goals, and where you should invest so that you could retire comfortably.
Save at least 10%
While 20 years of service would make you eligible for a pension plan, don’t think for a second that this would be enough when you retire.
First of all, you’re not 100% certain you’re going to serve for 20 years. Likewise, your pension might not be enough to finance the lifestyle you’re envisioning when you retire. That said, try to save at least 10% of your monthly income so that you have a cushion to fall on. Also, if possible, consider setting aside at least three to six months’ worth of living expenses that would serve as your emergency fund.
Keep in Mind that Your House is NOT an Investment
Once you retire, you would need to live somewhere, so don’t think that you could use your house to finance your retirement. Plenty of individuals fail to save enough money for their retirement, so avoid being one of them and don’t include the value of your house when you calculate your retirement fund. If you must tap into your home equity in the future, you could do so and not end up on the street.
Remember to Pay Yourself
Consider automatic transfers of at least 10% of your monthly paycheck into a savings or investment account such as Roth IRA or Thrift Savings Plan. This way, you won’t have the chance to spend the money because you technically didn’t have it in the first place.
To ensure your and your family’s financial future, you need to plan and invest your money in the right way. Prior to just spending your money, always ask yourself if spending it is the right thing to do. Research your investment options and evaluate the potential risks and benefits of each. With proper planning, you could rest easy knowing that your benefits are working for you and would come through for you when you’re ready to retire.