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Personal Finance Tips for Military Families

One survey found that military personnel has higher credit card debt and fewer tangible assets than their civilian counterparts.¹

While the financial situation of military personnel and their families mirrors the general population in many respects, heavy indebtedness and mismanagement of credit cards may be especially acute issues for service members.

Of course, military families face unique challenges, such as deployment to conflict zones, overseas assignments, and the constancy of change, making personal finance even more critical.


  1. Take Full Advantage of What’s Available
    1. The Thrift Savings Plan is one way to save for retirement, and a Roth TSP is now available.
    2. The Savings Deposit Program allows eligible personnel serving in designated combat zones to invest up to $10,000 and receive a return of up to 10%.²
    3. Saving in a Roth IRA may be a good idea if you receive tax-free combat-zone pay. This allows you to deposit tax-free income and take tax-free qualified withdrawals in retirement.³
    4. The Post-9/11 GI Bill covers the total cost of in-state tuition, up to 36 months.
    5. Servicemembers’ Group Life Insurance protects your family with low-cost life insurance.4
  2. Set Goals—Like any mission, success begins with articulating goals you want to pursue.
  3. Establish a Budget—A budget provides the financial discipline that may help you control spending impulses that lead to greater debt levels.
  4. Pay Yourself First—Determine how much money you need to set aside to reach your savings goal, deduct this amount from your paycheck, and attempt to live within the limits of what remains.
  5. Establish an Emergency Fund—Uncertainty marks the life of military families, so be sure you have an emergency fund that allows you to be as prepared as possible for these changes.
  6. Control Your Debt—Indebtedness is one of the enemies of financial independence.

As you think through your financial goals, remember, acting today is your first and most crucial step.

  1. The National Foundation for Credit Counseling (NFCC), 2017
  2. The Savings Deposit Program is a benefit offered to eligible personnel serving in designated combat zones. The guaranteed rate of return is subject to change.
  3. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawal can be taken under certain other circumstances, such as the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.
  4. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Stocks Closed Lower

Stocks Closed Lower

Stocks closed lower again yesterday, with the tech-heavy Nasdaq leading the way.

Rising bond yields, again, weigh on stocks as some worry that future inflation could cause the Fed to raise rates sooner rather than later.

It’s worth repeating that Fed Chair Jerome Powell has previously said rates are likely to stay near zero for the next three years. Last week, in testimony before Congress, he essentially said that the Fed has no plans to raise rates anytime soon and that their asset purchases will continue for the foreseeable future.

He expressed more concern over the lack of inflation than inflation rising.

I believe what we are seeing is just expected profit-taking and an ordinary pullback taking place.

Stocks usually pull back about -5% roughly 3-4 times per year. (A pullback is defined as a decline between -5% and -9.99%.) It’s quite common.

Stocks Closed Lower

There could also be some unease over stimulus talks. Congress has said they are determined to pass something by March 14th, which is when millions will begin losing some of their extended federal unemployment benefits.

In the meantime, the economy is doing well. The Atlanta Fed is estimating Q1 GDP to come in at 10.0%. And other forecasts have full-year GDP growing at the fastest pace in 38 years!

With virus case counts dropping, more people getting vaccinated, and more big cities and states loosening restrictions and allowing businesses to open, we should see significant pent-up demand unleashed.

That’s bullish for the economy and the market.

If you’re feeling uneasy, that’s normal, and we should remember that staying disciplined towards your financial plan is especially critical during times of volatility. I’ve seen many investors move from logic to emotion during volatile times. The reaction to fear reduces their chances of long-term financial wellness. Stay the course!

About the Author: Scott Cadieux, CFP®, AIF®

Scott started his Financial Services industry career in 1998. He holds his FINRA Series SIE, 7, 9/10, 63, 66 licenses and is an Arizona Life and Health Insurance Agent. An active CERTIFIED FINANCIAL PLANNER™ practitioner (CFP®) and Accredited Investment Fiduciary® (AIF®). Scott is also a dynamic and effective Arbitrator for FINRA.

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