How to Save and Plan for Retirement as a Veteran

Chelsy Meyer  | 

There are many retirement benefits for military service members who spend 20 years or more in the military, but what about those that become a veteran earlier? Retirement savings options come in many different shapes and sizes for all people, including those that serve in the military. In order to prepare for retirement, it’s important to take advantage of the retirement benefits available to you. Regardless of veteran status, you’ll want to start saving as early as possible. Accurate retirement savings requires diligent budget planning and knowing which retirement savings options are available to you. Whether you’re career military, or a veteran that didn’t retire military, you’ll have some similar benefits to take advantage of.

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Taking Advantage of Retirement Benefits

The best way to begin saving for retirement is to take advantage of all of the benefits available to you. Whether that’s a pension, a 401(k), or taking advantage of military benefits that are not directly tied to retirement, it’s important to find the benefits available to you depending on your veteran status.

  • Pension: Military pension is only eligible for those that spend 20 years or more in the military. There are a variety of retirement systems depending on when you served. Taking advantage of your pension benefits is a great way to live when you’re retired, though it may be difficult to live only on retirement pay depending on how long you’ve served. This is because your monthly payment will be dependent on your base pay when you retired. The longer you served, the higher your pay, the greater the percentage of that pay you’ll receive per month.
  • Thrift Savings Plan: A pension is great, but not many service members stay in the military long enough to receive it. However, that doesn’t mean you won’t have the ability to save for retirement in other ways. The Thrift Savings Plan (TSP) is sort of like a 401(k) account while you’re in active duty. The military will contribute to this account along with you starting at 1 percent and matching up to 5 percent after 2 years. As always, its best to save as much as you can and receive as much employer match as you can.
  • Non-Retirement Benefits: The military offers a lot in terms of benefits, pay, and financial resources. These benefits aren’t directly related to retirement, but taking advantage of those benefits will make saving money for retirement easier. Lower mortgage rates means a lower mortgage payment in retirement, for instance. There are also resources to help veterans with disabilities or medical debt that have the potential to make retirement easier. Not all benefits are directly related to retirement, but can still be beneficial for veterans who are retired.

Saving Ahead of Time

Some retirement savings plans aren’t specific to military or civilian retirement. Some of the basic rules of retirement savings are universal. The most absolute rule of retirement savings is to start saving as soon as possible. You can’t go back and save, so it’s best to start right away. Military service is full of bonus opportunities. If you make your bonus work for you, you may get a jumpstart on retirement savings that many civilians aren’t able to, or the ability to put some money in retirement if you didn’t start early enough.

  • Start Right Now: No matter where you are in terms of a military career, whether joining up, working active duty, serving in the reserves, or retiring as a veteran, start saving for retirement right now if you haven’t already. Whether you are able to take advantage of a TSP, you’d like to work toward a pension, or you’re looking for a personal retirement savings account, start saving immediately.
  • Make Your Bonuses Work for You: Service members get enlistment bonuses, extra hazard pay, a 12 year bonus (depending on your retirement plan), and reenlistment bonuses, to name a few. Instead of blowing your bonus, make your bonus work for you. This doesn’t have to mean just putting it in an account. You can also make your bonus earn its keep by deciding on an investment opportunity to grow your savings further.

Accurate Budget Planning

Saving for retirement means budgeting for that savings each month. Be sure to include some sort of retirement savings into your personal budget. How much you should be saving for retirement is really dependent on each person and their own financial situation. For this reason, it’s important to not only budget plan for retirement savings each month, it’s also good to think about how much you may need to live on for retirement. The average cost of retirement is a staggering $738, 400. Thankfully, by the time you retire you will have hopefully paid off your home. Plus, being a veteran means being eligible for VA health care. When retirement is so far off, it’s difficult to prepare for how much money you’ll need to have saved in order to live comfortably. Until that number becomes easier to see, it’s best to just be sure to keep a retirement savings plan in your budget for as much as you can comfortably afford.

Know Your Retirement Savings Options

As a veteran, you have a few ways to plan for retirement. However, those aren’t the only options. You also have options to save for retirement outside of the military. Once you’ve left the service, you’re no longer able to contribute to your TSP, for instance, so you’ll need to find another means of savings. For most, that means non-military retirement with another employer, or funding their own account.

  • Non-Military Retirement: Post-military employment is a journey that many veterans find themselves on if they don’t make the military their lifelong career. If you have an employer that offers a retirement savings option, such as a 401(k), you can utilize this benefit to help you with retirement later on. Look into their employer match options and save for retirement through your next career choices as well as any savings you accumulated through your time in the service.
  • Additional Savings Options: An individual retirement account is available for anyone to use as a way to save for retirement. There are many different IRA options depending which is best for you. This savings account offers many tax incentives that make it ideal for a retirement savings option even if you’re also saving for retirement through other means.

Retirement savings is difficult for everyone. For veterans who don’t spend the time to become eligible for retirement pension, it can be stressful to find ways to save for retirement outside of the military once they become a veteran. Thankfully, there are options that can help. It’s helpful to understand which retirement benefits are available, or even benefits that aren’t related to retirement that may make saving money for retirement easier. It’s also helpful to save as soon as possible in order to get your money growing as fast as possible. In order to do that, it’s important to add retirement savings into your budget. In reality, the options for retirement savings don’t have to be tied to the military, there are additional retirement options through post-military employers or individual savings options. Whether you’re in the military or not, it’s important to just start saving as soon as you can.


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Chelsy is a writer from Montana who now lives in Boise, Idaho. She graduated with her journalism degree from the University of Montana in 2012. She enjoys talk radio, cold coffee, and playing Frisbee with her dog, Titan. Follow Chelsy on Twitter @Chelsy5

This post was updated January 10, 2018. It was originally published January 3, 2018.