Military servicemembers face critical challenges but also have a few unique opportunities for financial stability. Whether you’re an active-duty servicemember or about to transition into civilian life, a few financial strategies for military families can help you and your loved ones find solid footing.
Ease into your post-military life with practical and simple tactics from the financial professionals with AAFMAA Wealth Management & Trust LLC (AWM&T). Ensure that your financial strategy is positioned for success, from transition to beyond.
Strategies for Active-Duty Servicemembers
While on active duty, take these steps to preserve your financial stability. One of the most common financial strategies for military families is to set up an emergency fund with a savings or brokerage account. This fund is for unexpected or critical events that could result in sudden expenses. Most financial planners recommend setting aside enough money to cover three to six months of total living expenses. This is an ideal use of your tax refund or military sign-on or deployment bonus, for example.
Saving money is easier to accomplish when you automate the deposit process. You can set up direct deposit from your employer via your myPay account and then request your bank or financial institution automatically deposit funds into your desired account.
When setting money aside for retirement, you can take advantage of the government’s Thrift Savings Plan, a retirement plan exclusively for federal employees and military servicemembers. The plan offers all the benefits of civilian retirement plans at slightly lower fees.
Many servicemembers run into problems managing debt from mortgages and credit cards. The Servicemembers’ Civil Relief Act (SCRA) offers relief from some of the most troublesome effects of debt, like terminated leases or evictions. It can also help control interest rates and settle your tax obligations. You can find more information about the SCRA from the U.S. Department of Justice.
Strategies for Servicemembers in Transition
After leaving the military for work in the private sector, some servicemembers must contend with drastic changes to their income streams, taxation, and benefits. It’s always wise to get as prepared as possible for the change in employment and potential income gaps.
If you haven’t yet lined up civilian employment, it’s a smart idea to set up a transition fund to cover expenses like housing and transportation. Like an emergency fund, it’s best to have enough for three to six months of living expenses.
You may also encounter changes in how you get paid and your tax responsibilities. Once you’ve determined what your typical income is, make a budget that comfortably covers typical living expenses. Be aware that you’ll have to file your tax returns by April 15 every year—you’ll no longer get automatic extensions for being in combat zones.
After you leave the military, you may still be entitled to certain benefits through the Veterans Administration (VA). These include financial aid for education, the post-9/11 GI Bill, career counseling, VA home loans, disability assistance, and more. Learn about the opportunities the VA may provide that you qualify for.
Look Toward the Future
Whether you currently serve or plan on departing the military, it’s important to think about long-term savings for retirement. There are many financial strategies for military families to contribute to retirement funds that can earn interest over time.
After transitioning, you’ll have to be aware of insurance and healthcare expenses. Your insurance coverage may go through some adjustments, especially in the areas of life and disability insurance. You may find health insurance options through TRICARE that can help you stay covered during the transition.
Get Help With Financial Strategies for Military Families
Whatever your career stage, these financial strategies for military families can get you through challenging times—and you don’t have to face them alone.
AWM&T exclusively serves military families just like yours. We’re here to deliver the wealth management solutions and the specialized financial advice you need and deserve. To get in touch, call 1-910-307-3500 or click here to speak to a professional. Learn more about us and your options on our website.
About Us
AWM&T was created in 2012 to meet the financial needs of military families. We provide experienced, trustworthy, long-range financial planning, investment management, and trust administration services to support financial independence and security. We aim to be the premier provider of fiduciary services by always working for AAFMAA Members’ best interests.
We are proud to share the mission, vision, and values of AAFMAA, our parent company, consistently building on AAFMAA’s rich history and tradition to provide Members with a source of compassion, trust, and protection. Through AAFMAA’s long-standing legacy and our financial expertise, AWM&T is honored to provide personalized wealth management services to military families across generations.
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