4 Key Steps in the March Toward a Comfortable Retirement

Most service members know that the military offers a generous pension—50% of your recent base pay. The trouble is, only about 15% of active-duty personnel will spend the 20 years in the force required to receive any benefit. (If you join the Reserves you can continue accruing time toward a military pension.) Even if you do qualify, 50% of your pay might not set you up for life. “People think, “I’m in the military. I have this great retirement.” The reality is that they need to be saving,” says J.J. Montanaro, a financial planner with USAA, which specializes in advice for members of the armed services.

Here’s how to get started toward your retirement goals.

While you’re still in uniform

1) Pump up your savings

Fewer than half of today’s service members participate in the military’s Thrift Savings Plan (TSP), which is similar to a company 401(k). You can contribute up to $18,000 pretax a year for 2015, though people 50 and older can put away $24,000, and those serving in a combat zone can save up to $53,000. While some service members complain that they can select only from a handful of broad index funds and a life-cycle fund, the expense ratios on all of those are among the lowest in the country. “In this case, simple is good,” says Norfolk financial planner (and retired Marine) Rob Aeschbach. Congress also just passed a revised military retirement plan, which would make enrollment in the TSP mandatory and provide an initial 1% government match. (President Obama has not said whether he will sign the bill into law.)

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