Military members and their families face one-of-a-kind challenges, such as deployment to conflict zones, overseas assignments, and the constancy of change, all of which make dedicating time to personal finance a challenge.

Luckily, special tax breaks and other benefits unique to service members that may make your financial situation a little easier to manage. From low-cost retirement savings plans to tax-advantaged Roth deposits, here are some exclusive ways for military members and their families to save money. Although certain eligibility criteria may apply, here’s some information to help you decide which options might be a good fit for you.

Follow these five tips to take advantage of potential benefits and simplify your military family’s personal finances.

1: Focus on Retirement Savings

The Thrift Savings Plan (TSP) is a tax-deferred retirement and savings plan sponsored by the Federal government and specific to military members. It’s a defined contribution plan that may help boost your retirement savings and income. You may also have access to a Roth TSP, which acts similarly to a Roth IRA but without income restrictions. By contributing to a Roth TSP, you don’t lower your taxable income now, but you will be able to withdraw the money tax-free when you enter retirement. Some potential drawbacks include limited investment options, higher contribution limits and no matching funds outside of civil service.

2: Save with High Interest

The Savings Deposit Program allows eligible personnel serving in designated combat zones to deposit up to $10,000 annually and earn 10 percent in annual interest. This can be an effective way to boost your savings for the future. By comparison, it’s not uncommon to find savings accounts at various banking institutions that offer less than one percent in annual interest rates. (1)

To qualify, however, members must be:

• Currently serving in SDP-eligible combat zones

• Deployed at least 30 consecutive days or 1 day in each of 3 consecutive months

• Actively receiving Hostile Fire Pay

3: Tax-Free In, Tax-Free Out

Saving in a Roth Individual Retirement Account (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. You can also withdraw contributions to a Roth IRA at any time, without the income taxes or penalties. There are income limits for a Roth IRA and tying up money in retirement funds can also leave you with less money to cover immediate expenses. However, all qualifying withdrawals after the age of 59 1/2 are entirely tax-free with a TSP or IRA.

4: Take Advantage of Education Benefits

The Post-9/11 GI Bill covers the full cost of in-state tuition, up to 36 months, plus housing fees and $1,000 a year to use for books and supplies.

To qualify for the full benefit, veterans must have served at least 36 months of active duty. If you don’t plan on using these benefits yourself, all or part of those 36 months can also be transferred to a spouse or child. Those who served less than 36 months could still receive partial benefits.2

5: Low-Cost Life Insurance

Backed by the Department of Veterans Affairs, the Servicemembers’ Group Life Insurance protects your family with low-cost term life insurance coverage. You may be automatically enrolled in this program if you are an eligible service member. Depending on your status or branch, you may have other life insurance options available to you as well. If you haven’t already, you’ll want to review your options and determine whether or not your coverage is up-to-date.3

More Ways to Maximize Your Money

Aside from specialized programs and offerings, there are a few things every military family can do to help get or keep their financial standings in order.

Set Goals

Like any mission, success begins with articulating goals you want to pursue. Make sure they’re measurable, attainable, and timely.

Establish a Budget

A budget can serve as the foundation of financial discipline. Setting a weekly or monthly budget can help you control spending impulses that lead to greater debt.

Pay Yourself First

Determine how much money you need to set aside to reach your savings goal, deduct this amount from your paycheck, and budget yourself to live within the limits of what remains.

Establish an Emergency Fund

Uncertainty marks the life of military families, so be sure you have an emergency fund that allows you to be prepared for whatever changes are thrown your way.

Control Your Debt

Indebtedness is one of the enemies of financial independence. Focus your efforts on paying down high-interest debt, like credit cards or personal loans.

As you think through your financial goals, remember that taking action today is your first and most crucial step. Take advantage of all your unique benefits and opportunities so that you and your family can live your best financial life.

1 Defense.gov, 2023, 2 Absher, Jim. “Post-9/11 GI Bill Overview.” Military.com, July 2023, 3 VA.gov, 2023

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