Military Retirement Planning: Are You on Track to Retire?

Retirement planning is part art, part science. The science part is generally fairly easy to figure out. It’s just math. The problem, however, is knowing which numbers and inputs to use. With retirement planning, you’re often dealing with imperfect data. That’s where the art comes in.

Experienced financial planners are trained to look at the future retiree’s entire financial plan, including retirement savings and investments, pensions, current and future financial obligations and much more. Then they take this information, along with additional information you provide, and give you feedback on your retirement outlook. The result is often extremely useful to help you see if you are able to retire now, if you are on track for retirement or if you need to do a little more to prepare for retirement.

Steps to Prepare for Military Retirement

Everyone is in a different situation and place in life. Here are some steps you can take to ensure you are moving in the right direction.

Start Contributing to Retirement Accounts Early

Start saving and investing for retirement as early as possible. Contributing to the Thrift Savings Plan and opening a Roth IRA are two of the best moves a military member can make early in their career. Every dollar you save today will be even more valuable in the future. The younger you start the better, as the power of compound interest will do the heavy lifting as you get older. But it’s almost never too late to get started, most people still have time to increase their retirement savings.

For 2026, military members can contribute up to $23,500 to their TSP annually, or $31,000 if age 50 or older. Roth IRA contributions are limited to $7,500 per year, or $8,600 if age 50 or older.

Eliminate or Avoid Debt – The Killer of Financial Dreams

Eliminating debt is one of the most important steps you can take toward financial independence. It may take time to pay everything off, especially if you have large student loans, credit card bills, or other large payments. But paying off all debt will be one of the most important financial decisons you ever make.

Take a moment to imagine how quickly your investment accounts would grow if you could invest the amount you currently make in monthly debt payments. Your investment accounts would grow very quickly if you could add a few hundred or a few thousand dollars to them each month. If you have a mortgage, making it a goal to pay it off before retirement will help your retirement dollars go further and eliminate a major ongoing expense.  

Reduce Ongoing Expenses to Accelerate Retirement

Making it a goal to avoid excessive financial obligations, even those that don’t seem significant, can make a major difference over time. Regularly shopping for lower insurance rates, finding an affordable cellphone plan, and cutting unnecessary subscriptions are small steps that add up quickly. Each dollar you don’t spend on ongoing expenses is another dollar you can use to reach financial independence more quickly. 

I encourage you to review your spending every few months to identify items that cost money on a regular basis but don’t bring equal value in return. Once the habit of mindful spending is established, it will be much easier to afford retirement.

Understanding the Value of Your Military Pension

One of the most valuable and often underappreciated retirement benefits available to military members is the military pension. Understanding the full value of your pension, including its inflation-adjusted cost-of-living increases, is an essential part of military retirement planning.

How Valuable are Military Retirement Benefits?

I recommend reading these articles for more information:

• Is Military Retirement Pay Enough to Retire On? – a breakdown of whether military retirement pay can cover your living expenses
• A Military Retirement is Worth Millions of Dollars – an analysis of the long-term value of a military pension
• How to Calculate the Present Value of a Military Pension – a practical guide to understanding what your pension is worth in today’s dollars
• How Much Is the COLA On My Military Pension? – an explanation of how cost-of-living adjustments work and why they matter

Military and government pensions are inflation adjusted, meaning your pension will receive cost-of-living adjustments each year based on the same formula used for Social Security benefits. This is incredibly powerful and will help you maintain your spending power as you age.

How Social Security Fits Into Your Military Retirement Plan

You should be eligible for Social Security benefits once you reach age 62, though you will receive a discounted rate if you begin then. Full benefits start at age 67 for most people. If you wait beyond age 67, you will receive a higher payout. 

Depending on when you served, your military service may increase your Social Security benefits.

You can create a free account with the Social Security Administration at SSA.gov to view your earnings history and an estimate of your future retirement benefits at age 62 and beyond. Additionally, Social Security benefits are based on your highest earning years, working a few more years at a higher pay rate may increase your benefits. 

Protect Your Legacy: Insurance and Estate Planning

Buying adequate life insurance is one of the most important steps you can take. If anything happens to you, the right coverage will ensure your family is taken care of. I recommend reviewing all your insurance policies at least once a year, including auto, home, life, health, an umbrella policy if needed, and anything else relevant to your situation. The hope is that you will never need insurance, but if you do, the benefit will almost certainly far outweigh the cost.

For military retirees, Tricare is one of the most valuable insurance benefits available. Understanding your Tricare options at retirement, including Tricare Prime and Tricare Select, is an important part of your overall insurance planning. Review your Tricare coverage options well before your retirement date to ensure a seamless transition.

Estate planning is equally essential. A current, up-to-date will and estate plan will ensure your desires are met and help your survivors avoid costly probate, court, and legal fees. If you have recently moved to a new state, gotten married, had children, or experienced any other major life change, now is a good time to review and update your estate plan. 

Putting It All Together

This seems like a lot to do and, in some ways, it is. But the good news is that you don’t have to do it all today. Retirement planning is a process, not a single event. The earlier you start, the more time you have to course correct along the way.

Start with the steps that will have the biggest immediate impact on your situation. If you have high-interest debt, focus there first. If you aren’t maximizing your TSP contributions, increase them now. If your estate plan is outdated or nonexistent, put it on your calendar. Small, consistent steps taken over time are what separate those who retire comfortably from those who don’t.

For military members, the foundation is already stronger than most. A pension that is inflation-adjusted for life, access to Tricare, Social Security benefits, and the TSP put you in a better position than the vast majority of American workers. The key is to build on that foundation by eliminating debt, reducing expenses, and saving consistently, so that when retirement arrives, it is a choice rather than a necessity.

Meet the Author

Ryan Guina

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Tennessee Air...

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