A Realistic Way to Plan for Your Military Pension
To U.S.
When it comes to pensions, a critical issue is how quickly your benefits are "vested" -- that is, how quickly you really earn the right to a benefit.
Row 0 - Cell 0 | To U.S. Military Personnel and Their Families |
Row 1 - Cell 0 | Savings Strategies for Military Families |
Row 2 - Cell 0 | Avoiding Scams That Target Military |
Row 3 - Cell 0 | Be Prepared for Deployment |
Row 4 - Cell 0 | Home-Buying Tactics for Military Families |
Row 5 - Cell 0 | Time to Become a Civilian Again |
Row 6 - Cell 0 | Financial Resources for Military Families |
In the civilian world, for example, an employee might become 20% vested after two years on the job and 100% after seven years.
But there is no partial vesting for military pensions. If you don't stay for 20 years, you generally get nothing.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
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For that reason, it's usually best to avoid including the pension in your retirement-planning calculations until you're just a few years away from qualifying. "So many things can happen between start and finish that you just don't know what to bank on," says Patrick Beagle, a former Marine helicopter pilot who is now a certified financial planner in Fairfax Station, Va., specializing in military families.
For help figuring out how much you might receive if you do end up staying in the military, go to Defenselink.miland click on retirement.
MAIN: PERSONAL FINANCE GUIDE FOR MILITARY FAMILIES
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As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.
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