A seasoned military career brings a unique professional experience for millions of people each year. We have roughly 1.3 million active-duty military service members. And at least 1.47 million non-disability military retirees receive retirement payments after leaving the military. As this specific demographic prepares to retire and return to a civilian life, their financial life also uniquely changes. They will lose a variety of military perks and experience often unexpected living costs, creating unique financial needs to address.
If you or someone you know will soon retire from the military, here are 4 financial details to manage in order to support a stable transition.
1. Know your budget.
Once you retire, you no longer receive the stable military salary you’re used to, among other perks. As such, identifying your costs of living as a civilian is essential. Details like car expenses, rent or mortgage checks, schooling, or even clothing expenses add up quickly. Further, you need to identify how much retirement savings you have to support you. While military service members have access to unique savings opportunities and military pensions, a vast majority don’t qualify or take advantage of them. In fact, less than 18% of service members enlist long enough in the military to qualify for retirement savings. As a result, identifying your savings gap against your living expenses is an essential planning step.
2. Understand how taxes will affect you.
If you’re one of the near 18% of service members retiring with a pension, then you have specific tax details to navigate. Tax liabilities on retirement payments differ depending on what state you live in. In addition, the tax environment on other details such as income, Social Security, and property also vary. As you plan your military retirement and move, be sure to take into account the tax environment for your future city and state.
3. Cover your life insurance gap.
When on active duty, service members and their spouses have access to the military’s unique life insurance program. But once retired from the military, this perk disappears. Retiring service members can enroll in the Veterans’ Group Life Insurance with no medical underwriting, if they do so within 120 days of leaving active service. However, the cost-prohibitive coverage generally is best for a small niche of veterans with deeper health issues. As a result, finding adequate commercial life insurance coverage is usually important to help cover protection gaps.
4. Be sure you understand your specific military retirement benefits.
Service members who enlist long enough to qualify for the military’s pension (20 years) will have helpful income once they retire. But, the date you enrolled in the military will dictate what specific retirement benefits you’ll receive. Service members who entered the military:
- Before September 1980: Are eligible for the military’s Final Pay retirement system
- Between September 8, 1980 and August 1986: Can receive the High 36 system
- After August 1986: Are eligible for the REDUX system
More fully understanding which system you qualify for and how it pays out is essential to your financial life.
No matter when you plan to retire, the annual expenses and income you have will define the specific financial strategies you need. To explore how retiring from the military could affect you or a loved one, feel free to contact us at 408-227-2700. As a Wealth Management firm in San Jose, CA, we’re ready to help you make the most of your financial opportunities.
- 1 tsp olive oil
- 6 small chicken thighs (2 lbs.)
- 1 medium onion, chopped
- 2/3 cup dry white wine
- 1 TBSP butter
- 14 oz. artichoke hearts, quartered
- 1 medium lemon, sliced thinly with seeds removed
- Parsley for garnish, chopped
- Rice, steamed
- Preheat oven to 425°F.
- Heat olive oil on medium-high heat in a 12-inch skillet.
- Cover chicken with 1/2 tsp of salt and pepper, each.
- Place chicken skin-side down in the skillet, and cook for 5 to 8 minutes or until it turns golden brown.
- Move chicken to a rimmed baking sheet lined with aluminum foil, with the chicken’s skin-side up.
- Place in chicken in oven and roast for 15 minutes or until it fully cooks to an internal temperature of 165°F.
- Add to skillet the chopped onion and 1/4 tsp salt, and cook for 3 minutes on medium heat.
- Pour dry white wine into skillet, and simmer onions for 2 minutes, scraping up browned pieces.
- Add butter and stir until melted. Add artichoke hearts and lemon to the skillet.
- Plate chicken with steamed rice, and spoon sauce over dish.
- Add flair to the dish by garnishing with the chopped parsley.
Recipe adapted from Good Housekeeping[7
Receive In-Person Tax Support From the IRS
If you need helping managing your taxes, the IRS has an array of services online that can provide a Do-It-Yourself (DIY) platform. Sometimes, however, you may need a deeper level of support. Taxpayers seeking in-person support have the choice to schedule a face-to-face meeting.
- Find your closest IRS Tax Assistance Center (TAC): You can locate the nearest TAC by using the Contact Your Local Office Tool on the IRS website.
- Request to schedule an appointment: To receive in-person tax support, you must call the following number to make your appointment: 844-545-5640.
Before You Call
Just remember that the IRS encourages you to manage your tax details through their DIY platform or phone support before requesting an in-person meeting.
Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov
Overcome the Fried Egg Lie
Golfers facing the difficult bunker lie, the fried egg, need to use a soft-yet-powerful swing to get the ball out in one stroke. Unless you make some adjustments to how you approach your swing, you could find yourself stuck in the sand time and again.
To overcome your fried egg lie, follow these steps:
1. Open clubface slightly.
To start, make sure that you control your ball’s velocity. Focus on shifting your weight toward your front foot to open your clubface and relax your hands. By doing so, you emphasize your clubhead’s dig, which further requires this approach. This shift in weight allows the club to dig more effectively into the sand trap.
2. Follow an outside-and-up backswing path.
Some golfers mistakenly think they need to follow through to a normal position to get out of a fried egg lie. However, when you swing, you want your momentum to transfer into the sand rather than move through it. To do so, once you’re ready to swing, relax your hands to allow your club to naturally follow a backswing that moves outside and up. You need your clubhead buried into the sand by at least an inch behind the ball. By stopping the clubface at impact-while keeping soft hands and an open clubface-you will encourage more height and less speed.
Tip courtesy of Tom Stickney / Golf Tips Magazine
Eat These Foods to Help Your Eye Health
Many people eat carrots to help improve their vision. But we can go beyond just one root vegetable to boost our eye health. Research reveals that most food with antioxidant properties are good for your eye health. These foods have carotenoid compounds like beta-carotene, zinc, and omega-3 fatty acids, among other nutrients. You can give your vision a boost and support improved eye health by eating the following foods:
Tip courtesy of Mayo Clinic
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