You raised your right hand and did solemnly swear (or affirm) that you will support and defend the Constitution of the United States against all enemies, foreign and domestic. So, now what? Did you know that military enlisted personnel, on average, receive cash compensation higher than that of approximately 90% of civilians of the same age and education level? Not only is your cash compensation higher, but your military benefits are great!
So how can you, as a new recruit, navigate your many military benefits? As an Army veteran with 12 years of service, I’ve learned a thing or two about using military benefits. Here are five insights to get started.
- Educate Yourself. The first step to navigating your military benefits is knowing what they are so you can take advantage of them. You can keep up with your benefits by visiting Military.com. You might be surprised by what your benefits cover. Take your education benefits, for example. The GI Bill not only helps pay for college and graduate school, but it can also fund vocational training and trade schools, licensing and certification courses (including CFP® certification) and can even pay for flight school! You only need to honorably serve three years to access the full financial benefits.
For those with student loans, the Loan Repayment Program can repay close to $65,000 of your certain student loan debt, depending on the branch in which you serve. - Use Savings and Discounts. If you want to keep more of your money, you must spend less. New military recruits can save by taking advantage of both on-base and off-base financial savings.
The on-base grocery store is a great place to start saving money on your everyday essentials. You will find the same items and brands as you would at any store, but at much lower prices. From banking and car repair services to entertainment and legal services, take advantage of all financial benefits offered at your base or post to save as much money as possible.
The same goes for off-base savings. Car rentals, travel, cellphone plans, vacation spots — before you ever pay for anything, always ask, “What are your active-duty discounts?” If you don’t ask for it, you won’t get it. Make saving part of your financial plan. - Access Retirement Savings Plans. Sadly, you won’t serve in the military forever. Whether you are planning to serve 20 years or still figuring it out, one day you will be back to living your life as a civilian. The good news is that even if you serve for just a few years, you still have access to one of the finest retirement savings plans available: the Thrift Savings Plan (TSP). The TSP works like a 401(k), where you can contribute part of your paycheck pre-tax, allowing the account balance to grow without paying taxes until the funds are withdrawn. There is also a Roth TSP option, where you contribute after taxes and withdraw some, or all, of your funds tax-free.
One of the biggest advantages with your TSP over most 401(k) investors is lower fees, which means more of your contribution is working for you. - Reach Out for Support. You don’t know what you don’t know. One of the best websites for anyone in the military is the Military OneSource website: militaryonesource.mil. Military OneSource is a 24/7 information hub that supports servicemembers and their families to help them reach their goals, overcome challenges and thrive. This Defense Department-funded program can be accessed anytime, anywhere. You can also call 800-342-9647 for help.
- Work With a Professional. Lastly, check out LetsMakeAPlan.org, which has resources for the unique financial needs of members of the military as well as the “Find a CFP® Professional” search tool. When you work with a CFP® professional, you can be confident that you are working with a financial advisor who has met rigorous qualifications and has made a commitment to putting your best interest first. They can help you set up a financial plan that works for you. Find your CFP® professional today.
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