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Military Families and Financial Planning

Military Families and Financial Planning

November 10, 2020

As a military family, you often have to deal with the stress of moving relatively frequently or potentially getting deployed. Managing your finances through these situations takes some finesse. To help ensure you're moving in the right direction, keep these tips in mind. 


  1. Set Aside Cash Reserves


Whether you are military or not, you should ideally always have enough cash on hand to cover a few months of expenses. Then, if you ever face an interruption in your earning potential, you have a cushion until you get back on your feet. 


If you're in the military, the Savings Deposit Program1 can assist you in your efforts. Through this program, deployed service members receive a guaranteed 10% return on up to $10,000 in savings, and this continues for up to three months after you return. 


Many credit unions and banks also offer attractive savings options and special rates for people currently and formerly in the military. 


  1. Take Advantage of Education Benefits


Furthering your education can help you make the next move in your career, and thanks to the Post-9/11 GI Bill, you can receive full coverage for the cost of four years of in-state tuition and fees for public colleges or up to $17,500 per year for a private or foreign college. 


Best of all, if you don't have an interest in going back to school, you don't have to miss out on this great program. You can transfer the benefits to your children or spouse. 


  1. Invest in Life Insurance


To prepare for the worst, everyone should have life insurance. In exchange for a monthly premium, life insurance helps protects your family if you're not around to support them, and again, service members have access to special programs. 


Through the Servicemembers Group Life Insurance (SGLI), you could potentially pay just a few pennies a month per $1,000 of coverage up to $400,000. As of 2018, you can access the maximum coverage for about $312 per month, and you can insure your spouse for as little as $60 per year. Unlike other plans that require you to have a doctor's exam, this plan offers the same level of coverage regardless of your age, health, or likelihood of being deployed. 

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.



  1. Look Into Low-Cost Investments


Some investment opportunities can be expensive, but luckily, there are programs that let you get into the stock market without spending too much on brokers' fees or similar expenses. For instance, the Thrift Savings Plan charges a small management fee of just 25 cents per $1,000 invested, and this program gives you access to a variety of mutual funds as well as guiding you toward more conservative investments as you get closer to retirement. 


  1. Explore Low-Interest Loans


When you're investing, you want the highest possible interest rates, but of course, when you're borrowing, you want low rates. The VA helps to make this possible with special home loans for current and former members of the military. Beyond that, the Servicemembers Civil Relief Act caps all of your loans at 6% if you go into active duty, but you have to contact your lenders directly to make sure they're giving you the right rate. 



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.



Content Provider: WriterAccess

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