Military Retirement Planning

Military Retirement Planning

There are several ways to start military retirement planning. To properly do it, one must have a diverse portfolio. It is not all about traditional securities like stocks and bonds. It is about time to level up and put precious metals like gold and silver IRAs in the mix.

Reasonably distributing money over a collection of investment options opens maximum protection over time. Take advantage of the benefits and start investing now.

It is fundamental to remember that no two individuals have the same risk tolerance, budget, or financial goals, but a wide variety of investments make up for it. They just need to know where to look.

For instance, military investors must consider what to do with their pensions when planning their retirement. One must include precious metals in their investment portfolio.

To know more about which companies provide the leading products and services of precious metals, keep reading!

Augusta Precious Metals

www.augustapreciousmetals.com

Star Rating

Isaac Nuriani founded Augusta Precious Metals in 2012 with the prime intention of supporting retirement investors to diversify their portfolios — shielding them from the stock market’s volatility and inflation. It is an investment firm that supplies gold and silver individual retirement accounts (IRAs).

If money is not a concern, one may consider investing in Augusta because the initial deposit to open an IRA account with this firm is at an all-time high — it starts at 50,000 USD. The saving grace here is Augusta has lower annual fees than its competitors.

With ten years of industry experience, Augusta has served retirement investors across all 50 states, has over 45 years of industry experience as a self-directed individual retirement account provider, and manages over 34 billion USD worth of assets.

Moreover, they offer precious metals in partnership with a preselected custodian — Equity Trust. Augusta Precious Metals investors have a wide selection of bars and coins to pick from, including:

  • American Eagle Proofs
  • American Eagles
  • Gold Canadian Eagles
  • Canadian Maple Eagles
  • 10 oz Gold Bar
  • 1 oz Gold Bar
  • Canadian Silver Eagles
  • Many more

The current listing for their products is not yet available on the website. Nonetheless, Augusta Precious Metals does not charge administration fees, but retirement investors must pay to set up their accounts and cover the security and deposit fees with the gold custodian.

Pros

  • Setting up an individual retirement account (IRA) is quick and easy.
  • Augusta offers a transparent fee system. They also offer gold buy-back guarantee programs subject to modification.
  • There is a streamlined strategy that starts with client education.
  • Unlike other precious metal suppliers, Augusta does not charge administration fees.
  • There is constant customer assistance from passionate market experts.
  • The bullion prices for silver and gold are competitive.
  • There are zero negative criticisms regarding Augusta’s products and services on independent review websites.
  • Augusta Precious Metals are accessible across the United States due to its many available depositories.

Cons

  • The price list is not on the website.
  • Clients must download several documents when they sign up.
  • Augusta Precious Metals require retirement investors with a minimum deposit of 50,000 USD. This is one of the causes why most investors back out from opening an account with them.
  • Augusta Precious Metals do not have platinum and palladium individual retirement accounts.

Goldco Precious Metals

www.goldco.com

Star Rating

Goldco Precious Metals is well-renowned in the investment industry, exceeding competitors and being on par with its prominent rivals. It was in 2006 when Trevor Gerszt gave birth to this monster of a company in California, and the online reviews have been overwhelmingly flattering since then.

Retirement investors should consider Goldco if they value an organization’s reputation and recommendations. The most distinguished American Business Awards picked Goldco Precious Metals as the financial services category’s company in 2021. The Los Angeles Business Journal also named them the region’s fastest-growing business in the same year.

With quality customer service, reliability, and ethical industry practices, Goldco has garnered thousands of favorable judgments by satisfied clients. A Goldco representative helps retirement investors to diversify their money with precious metals.

Goldco delivers acquisitions in precious metals like platinum, gold, silver, and palladium. It is also worth saying that Goldco claims to buy back clients’ IRA-approved gold and silver coins at the highest fee.

They operate with mints around the globe to find high-quality coins qualified for investment through a Gold and silver individual retirement account. The coins include the following:

  • Gold Freedom and Hope Coins
  • Gold American Eagle Gold Coins
  • Gold Maple Leaf Coins
  • Silver Lucky Dragon Coins
  • Silver Maple Leaf Coins
  • Silver American Eagle Coins
  • Many more

Pros

  • New clients are qualified for unique and exclusive offers.
  • The pricing is highly competitive and transparent.
  • There are several educational resources for clients.
  • Goldco has notable public figure endorsements, like Sean Hannity and Ben Stein.
  • Goldco offers a high buy-back rate, unlike its competitors.
  • The financial experts from Goldco have long-term investment experience.
  • A gold IRA provides retirement investors with similar tax benefits to the traditional IRA.

Cons

  • Goldco does not offer palladium and platinum precious metals in their IRA category.
  • The minimum initial deposit for a Goldco silver or gold IRA is 25,000 USD, higher than its rivals.
  • Goldco is not upfront about the fees it charges to its customers.
  • Clients are not applicable to open accounts online. Ask for a free gold IRA instead.

American Hartford Gold

www.americanhartfordgold.com

Star Rating

American Hartford Gold is one of the precious metals brokers that opened its services in 2015 and has gathered fairly sizable clients since then. It is a California-based investment company that deals in silver and gold individual retirement accounts (IRAs).

In addition to trading metals like bullion coins and bars, this precious metal firm offers notable settlements, such as buy-back assurance.

With an abundance of payment waivers, American Hartford is an ideal preference for retirement investors looking for a more practical IRA or individual retirement account provider. It does not have fixed fees, and investors can take a better deal depending on their financial situation.

One of the many goals of American Hartford Gold is to assist its consumers in formulating a more diverse investment. Retirement clients do not need to fret about the security of their assets. All orders are safe until they make it to the storage house.

American Hartford Gold has acquired top ratings for customer support service. The customers of American Hartford are naturally pleased with the company’s speedy reply times and solutions.

However, there is one notable flaw American Hartford Gold has. To check how much a service or product costs. The company does not have its product fees listed on the website.

Pros

  • Several depositories are available around the United States, making the company’s services more accessible.
  • A minimum of 10,000 USD is sufficient to create an individual retirement account.
  • American Hartford Gold provides reasonable pricing with superior customer support service.
  • The representatives from American Hartford Gold are receptive to client concerns and queries any time of the day. The market expert appointed to a specific retirement investor will provide customized explanations depending on their financial affairs.
  • Retirement investors have a secured buy-back assurance. They may acquire their gold and silver assets without any liquidation costs.
  • The American Hartford Gold’s inventory supplies a variety of gold and silver commodities.

Cons

  • The prices of the precious metals are not in the American Hartford Gold’s online list.
  • Gold and silver are the only coins available for purchase from American Hartford.
  • Any shipping services outside the United States will not work.
  • Their website has unclear information regarding its products and service. Retirement investors must call a company representative for clarification.

Birch Gold Group

www.birchgold.com

Star Rating

The Birch Gold Group has been a recognized individual retirement account (IRA) provider in the precious metals industry for more or less than 17 years! It is crazy to think that this precious metal provider has only minimal drawbacks after being in the industry for almost two decades — no surprise why they deserved to be on this list in the first place.

The company is one of the most proficient IRA providers based on its offerings. The Birch Gold Group delivers reasonable buy-back insurance on all products to ensure investors can efficiently exchange their precious metals, such as gold and silver, for cash.

Furthermore, Birch Gold Group has countless optimistic reviews on reputable independent websites. Investors wishing to have their IRAs rollover may consider partnering up with Birch Gold Group.

Like other precious metal companies, Birch Gold Group provides educational materials for clients to become more aware of IRA investments. The content will assist them in further educating themselves with investment jargon. Additionally, it clarifies tax benefits they may encounter in precious metal investments.

With more than fifteen years of experience, the Birch Gold Group is prepared to manage clients of all kinds with their customized investment portfolios. The company ensures its clients do not require extensive measures to set up an individual retirement account, making it particularly simple but comprehensive enough for clients to fund IRAs.

Pros

  • Birch Gold Group has been in the industry for 17 years already.
  • The 10,000 USD minimum required deposit is considerable for most clients.
  • The company offers palladium, aside from gold and silver.
  • Birch Gold Group representatives handle the client’s paperwork and help set up an account.
  • Similar to other precious metal firms, Birch Gold Group offers free information bundles with precise and reasonable fees.

Cons

  • Not having an online web conference may be a drawback for some investors.
  • Birch Gold Group’s website needs an update. Clients must contact a company representative for queries, but most clients do not have the time to do so.

Know the Five W’s of Military Retirement Planning

When Should You Start?

No one knows what tomorrow looks like. This is precisely why individuals work and save money for the future.

Since no one knows when or where military members will get separated in life, they should plan for retirement the moment they join the service. Evaluating, preparing, and saving to execute viable options as early as possible is crucial.

Take note that military personnel may serve for 20 years or longer depending on their career options, goals, and family needs. Although it is still a long way to go, there is no such thing as doing something too early.

Creating more flexibility in their military retirement planning allows them to adjust, edit, and update as needed.

Who Should You Involve in the Process?

Everyone has their own set of people they prioritize in life. Some may list their family members on top, or just anyone they think is most important to their lives.

Next is the so-called military family. This consists of the influential network they meet at work, including leaders, mentors, and fellow service associates who inspire them in various things.

These people most likely helped pave the way by sharing their firsthand knowledge and experiences on multiple subjects, such as creating resumes, paying negotiations, and decoding civilian health care.

Remember that service members do not leave co-members behind and that help is abundant for those who ask. Besides, colleagues would not want their comrades to duplicate their previous mistakes!

What Steps Can You Take To Meet Your Goals?

The first step towards meeting a specific goal is to define what to achieve. It does not have to be an elaborate vision. A comprehensive set of capabilities to execute certain things can suffice.

There are two areas in achieving military goals. One is about financial well-being, and the other is about a smooth transition from active duty to civilian life.

In terms of assembling financial well-being, one should pay close attention to the saying “pay yourself first,” starting from a young age. This is achievable by initiating saving and investing once they start earning.

After that, create a long-term investment strategy and take advantage of a wide range of retirement investing options. When opportunity knocks in, it is time to put some of the hard-earned money in individual retirement accounts (IRAs), Thrift Savings Plans, and 401(k).

Make sure to understand how to use the service-related benefits fully. Concentrate on preparing for the shift to the following career and address potential gaps between leaving active duty and starting a new job.

They may join pre-retirement workshops when they hit 18 years of service. This lets service members get acquainted with the long-lead components of their military retirement planning process.

Note that military retirement planning does not solely revolve around monetary terms. One should take everything into profound thought in more essential things, including how to time a career hunt, to decide where to live, what to do, or, more importantly, what not to do.

Where Should You Go for Financial Advice?

Take advantage of complimentary help, like the Transition Assistance Program, for informed decisions. Fortunately, there are nationally accredited personal counselors or financial advisors at the Military and Family Support Center to help workers with their money.

They help review a client’s financial objectives and make a sound plan to achieve them. In addition, they can ask about their veteran’s affairs benefits.

If they feel awkward with counselors, it is also alright to talk to parents or others they trust to ensure they understand what IRAs are, how compounding works, and how they can save and invest their money.

Talking to supervisors and peers regarding savings plans and strategies is also reasonable when asking for financial advice. Furthermore, they can also start reading highly regarded money publications, articles, and some basic textbooks on investing for the long term.

There are no one-size-fits-all keys, especially in monetary terms. That is why it is vital to ask tough questions and ensure all details and risks of any financial transactions. Most importantly, always stay critical about what the mind absorbs.

Why is Retirement Planning So Important?

The sooner a person starts saving and investing, the more time their wealth grows through compounding. For military retirees who work a second career, the combination of their second career and the army assistance allows increased savings to adjust and catch up with financial retirement plans.

Even though retirement may not seem so urgent in one’s career, it is one of the most consequential decisions to make in life — with or without planning. In addition, It is best for military retirees to get involved early on to have a say in what retirement looks like.

Retirement Requirements: Must-Dos Before Your Retirement Date

Initial Counseling and Pre-Separation Counseling Brief

The counseling services cover various topics, including education and training, financial management, health and well-being, employment and career goals, and relocation and housing.

At least 365 days before the separation or retirement date, a military retiree must complete the Individualized Initial Counseling session and the Pre-Separation Counseling Brief. However, if they do not meet the timetable, they are free to reschedule up to two years or 24 months before the separation or retirement date.

Core Transition Curriculum

As part of the Transition Assistance Program, a military retiree must attend the mandatory briefings regarding employment preparation, transition preparation, and the benefits presented by the Department of Veterans Affairs.

This program provides the necessary information, tools, and training to help military members and their spouses prepare to move from service to civilian life successfully.

Final Medical Exam

Note that scheduling the mandatory, final dental and medical examinations with the installation’s medical clinic must be no later than 90 days before retirement or separation date. Of course, earlier is more okay to account for all probable appointments and permit extra time to have them scheduled.

Scheduling Final Move

Like taking the final medical exams, the sooner they schedule the final move, the higher the chance of getting the desired date. Besides, a service member has one year after leaving their active duty to finish the final move.

Planning Your Post-Retirement Budget: Know What You’ll Have To Work With

Income

A military service member is eligible for one of the three non-disability retirement payments. This includes the following:

  • Final Basic Pay
    As the name implies, this method establishes that the retired pay base equals the final basic pay. This is the payment for service members with an entry date prior to the 8th of September, 1980.
  • High 36
    High 36 Pay is for service members who did not elect the REDUX bonus or opt into the Blended Retirement System.This income program is the standard computation of the highest 36 months of basic wage divided by 36.This payment is for members with an entry date between September. 8, 1980, and the 31st of July, 1986. Moreover, those with dates after the 1st of August, 1986, and before the 1st of January, 2018, are eligible for the High 36 Pay.
  • Career Status Bonus / REDUX
    This retirement payment is for service members with an entry date after the 31st of July 1986. Also, those who accepted a mid-career dividend at the 15-year mark and agreed to remain on active duty for at least 20 years can acquire the career status bonus.Remember that service members enrolled in the new Blended Retirement System must have slightly different retirement payments than the three on the list. It includes a different monthly retired payment formula — a possible lump-sum amount taken at departure time, and a Thrift Savings Plan.

Payouts

A service retiree’s check withholds federal and state taxes. Moreover, take note of the dental and medical premiums as well as Survivor Benefit Plan premiums.

Annual Adjustments

The Department of Labor computes such adjustments based on the Cost of Living Adjustment (COLA). Like active-duty pay, retirement pay adjusts yearly based on living costs to shield the income against inflation.

Social Security Benefits

The military retiree or their dependent is qualified for social security benefits. Check the Social Security Administration website to explore the benefits and how to apply and qualify for the benefits.

Retirement Planning Options for Military Members 

Federal Military Retirement Benefits

The federal government provides two retirement plan alternatives for military service members. It includes Legacy Retirement System (LRS) and Blended Retirement System (BRS).

The program the members enrolled in and the benefits they enjoy significantly depend on when they enlist in the military. First, the Legacy Retirement System (LRS), also known as the Uniformed Services Retirement System, applies to all service members who enrolled on or before the 31st of December 2017.

This defined-benefit plan yields a lifetime monthly allowance to service members at retirement. To qualify for this plan, one must have served for about 20 years or longer.

On the other hand, the Blended Retirement System (BRS) applies to military members who enlist on or after the 1st of January 2018. If they start the service on or after the specified date, the authority automatically enrolls them in the BRS. Also, this type of military retirement method combines a defined contribution plan with a defined benefit pension plan.

Thrift Savings Plan (TSP)

The Thrift Savings Plan (TSP) is a federal retirement plan offered to qualified government workers, including military personnel enlisted in the BRS. Such accounts are parallel to 401(k) retirement plans.

Service members can elect to contribute from their base salary. The lowest vote to donate is only 1% of base pay. These contributions are on a pre-tax or after-tax basis — depending on whether they choose a Roth TSP or a traditional TSP.

Take note that TSPs have IRS limitations on yearly contributions. For 2021, service members can defer up to 19,500 USD into a TSP (increased to 20,500 USD in 2022). Additionally, the catch-up contribution limit for those aged 50 and older is 6,500 USD for 2021 and 2022.

Individual Retirement Accounts (IRAs)

Service members may also use individual retirement accounts (IRAs) to increase their TSP contributions and other federal retirement benefits.

For years 2021 and 2022, military members may contribute up to 6,000 USD to either a traditional or Roth IRA. As mentioned, an additional 1,000 USD catch-up contribution is allowed for military members ages 50 years or older.

Traditional individual retirement accounts (IRA) contributions can be tax-deductible, while Roth IRAs benefit from tax-free retirement withdrawals. Whether it makes sense to choose a Roth or traditional IRA depends on how much the retiree is making now versus their expected revenue in retirement.

Taking traditional IRA deductions could make sense if a service member is now in a higher tax bracket. If they anticipate being in a higher tax range at retirement, a Roth IRA may generate more tax benefits.

Moreover, choosing a Roth IRA means they will not pay any taxes on the money their savings have accumulated while they were investing in IRAs.

Savings Options for Military Members

Aside from retirement accounts, military personnel have other options to save. The choices include:

Savings Deposit Program Accounts

The Department of Defense offers the SDP to specific active-duty military members. To qualify for this program, a service member must serve in a qualified combat zone or get deployed for one day in three straight months or thirty consecutive days.

Military members may save up to 10,000 USD in a savings deposit program account (SDPs). These accounts generate a generous 10% interest rate, compounding every month, but only for the 10,000 USD amount. When deployment ends, the funds in an SDP account return to the service member.

Remember that members can make early withdrawals from their Savings Deposit Program account (SDPs) once it reaches a 10,000 USD balance and only for amounts above 10,000 USD or in case of emergencies when authorized by a commanding officer.

Military Savings Accounts At Banks/Credit Unions

Credit and bank unions can offer CD accounts, money market accounts, savings accounts, and other deposit accounts designed for service members and their families. These accounts may provide specific provisions or benefits, including higher interest rates or reduced deposit fees.

The benefit of opening service savings accounts at credit and bank unions is that there are fewer restrictions on how much they can save and when they can withdraw money. With savings deposit programs, a member is limited to saving 10,000 USD and can only pull early withdrawals under fixed events.

Taxable Investment Accounts

A brokerage account allows service members to save and invest money without constraints on contributions. Although they will not acquire any tax advantages by opening a taxable investment account at an online brokerage, they may have more choices and flexibility regarding how they invest.

For instance, a taxable investment account (TIAs) may limit a member to a particular range of mutual fund or exchange-traded fund (ETF) choices. Members can invest in mutual funds, stocks, options, ETFs, precious metals, bonds, futures, or even cryptocurrencies with a brokerage account.

It is also necessary to remember that any profits realized in a taxable brokerage account have capital gains tax. Both short-term and long-term capital gains rates must rely on how long the member wants to hold an investment before selling it for returns. Just do not forget to check the other fees when choosing a brokerage option, like commissions.

How to Create a Saving and Investing Plan

Knowing the suitable choices for saving and investing money as a military member is just a portion of a bigger equation. It is crucial to consider the final financial picture.

Military members must consider specific plans in shaping their financial goals. Check out the list below.

  1. If any, how much debt are they carrying
  2. The current financial approach for paying off that debt
  3. How much is their income likely to decrease or increase over time
  4. Their monthly budget and regular spending
  5. When would they like to retire
  6. How much money would they want to have in retirement
  7. Their current age as well as risk tolerance
  8. What they would like to save toward achieving other financial goals, including purchasing a house or paying for college

Meeting with financial counsel can help retirees create a more strategic intent for retirement saving and investing. If a military member does not have a financial advisor yet, they may want to search for one who specializes in assisting service members and their families.

Life insurance, for instance, can offer a monetary benefit to loved ones when something happens to a military member. The authority may qualify them for group life insurance via the Department of Veterans Affairs. Still, plenty of additional coverage is available to ensure their family is financially secure.

Preparation For Civilian Life

After serving in the military for years, civilian life must feel foreign to them. The most practical way to prepare is to learn what to expect and have sound strategies for days to come.

Also, having jumbled emotions about the transition is expected — a military member second-guessing their decision to leave service is exceptionally valid. The pressure they are experiencing may also get heightened during the transition.

After saying goodbye to the military, the roles and responsibilities are re-learned by ex-service members. For several months, they may also struggle to look for jobs.

Most are not familiar with interview conventions and resumes. Additionally, it may be challenging for ex-military who did not acquire a bachelor’s degree because some companies do not credit the skills they have obtained in the military.

Final Thoughts – Military Retirement Planning

Contemplating when to start military retirement planning for the future? It is always better to begin sooner, especially since there are plenty of government retirement benefits in the military. Military members may start allocating their monthly contributions to different investment avenues.

If unsure about the perfect investment options, look for a financial advisor to ask for advice. Fun fact, military members are eligible for a personal financial counselor at the military and family support center!

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