Best Investment Options for Deployed Military Members

One of the biggest benefits to going on a deployment is the extra income. Tax-free pay, hazard pay, imminent danger pay, family separation pay, and other financial benefits abound. Of course, they don’t make up for the danger of being in a hostile environment or being separated from your family, but the dollars are real and you should use them wisely while you are receiving those benefits.

I highly recommend saving money while deployed, but if you are already doing well in that department, then it is time to start investing your money for growth. The Thrift Savings Plan and military retirement pay are both great benefits, but not everyone reaches the service requirements to earn the military pension and the TSP may not be enough. Here are some places to start investing while you are deployed.

Where Should Military Members Start Investing When Deployed?

Open a Roth IRA

Roth IRAs are among the best investment options available to military and civilian members alike. Roth IRAs are retirement accounts with a great tax advantage – you make contributions with income that has already been taxed, and you are able to make tax free withdrawals in retirement. But, being deployed has its advantages – your income is already tax-free, meaning you don’t pay taxes on your contributions or withdrawals!

Prior to 2006, this prohibited you from making Roth IRA contributions, but the Heroes Earned Retirement Opportunities (HERO) Act was signed into law to allow military members to open IRAs even if 100% of their income was non-taxable due to deployments.

In 2026, most military members can contribute up to $7,500 annually, or $8,600 if age 50 or older. Higher earners should also be aware that the ability to contribute phases out above $153,000 for single filers and $242,000 for married couples filing jointly. Our military Roth IRA guide covers everything you need to know, including a list of the best Roth IRA companies to get started.

Benefit of Roth IRA contributions in a tax free zone: Tax free contributions with tax free withdrawals.

Contribute to Your Thrift Savings Plan

The Thrift Savings Plan is a great benefit available to military members. It functions the same way as a traditional 401k plan: you take pre-tax dollars and invest them without the drag of taxes until you make a qualified withdrawal in retirement years. This is the opposite of a Roth IRA, you don’t pay taxes now, but pay taxes later.

But there is a big difference if you invest in the TSP while deployed. Your contributions are already tax-free, but since your income is tax-exempt, you will not pay taxes on the contributions made while in a tax-free zone. This in effect gives you some tax benefits similar to a Roth IRA.

Your withdrawals in retirement will be less flexible than a Roth IRA, however, and you will still be required to make minimum withdrawals known as Required Minimum Distribitions (RMDs) beginning at the age 73 under current law. Your taxable and tax-free withdrawals will be made in proportion to the contribution amount, meaning you can’t determine how and when you withdraw the tax-free funds (keep in mind these rules are subject to change in the future).

It is also worth noting that the TSP offers a Roth TSP option, which allows you to make after-tax contributions and enjoy tax-free withdrawals in retirement, similar to a Roth IRA but with higher contribution limits. Military members can contribute to both a Roth IRA and a Roth TSP simultaneously to maximize their savings.

Benefit of TSP contributions in a tax-free zone: Tax-free contributions with tax-free withdrawals.

Participate in the Military Savings Deposit Program (SDP)

The Savings Deposit Program (SDP) is a military investment benefit available only to those currently serving in a designated combat zone. It offers a guaranteed return of 10% interest for deposits up to $10,000. You can start it as soon as you are in-country for 30 days and you can continue earning 10% interest for up to 90 days after you return home from the combat zone.

There are some limitations and inconveniences with the SDP (you can only contribute the amount of your paycheck each month until you reach $10,000 and you can only leave it in there 90 days after you redeploy), but it is probably the only place in the world right now where you can earn a guaranteed 10% return on investment. It is worth noting that interest earned in the SDP is taxable, even though your income while deployed is not. There are also some limitations regarding when and how you can withdraw your money from the SDP program.

See your finance department for more information.

Benefit of Savings Deposit Program: Guaranteed 10% interest on deposits.

Self-Directed Investment Options for Deployed Service Members

If you are more concerned with short term investing and having access to your investments in the near future, then you probably want to avoid investing with a Roth IRA or the Thrift Savings Plan because both are retirement accounts which limits availability to your contributions. The Savings Deposit Program also locks your money away without access until you return from your deployment.

If you are looking for a non-retirement investment option and don’t want to lock your money away for the duration of your deployment, then consider investing in stocks or mutual funds. Here is a list of the best brokerage accounts for cheap stock trades, most of which now offer commission-free trading, if you are interested in going that route.

Which Deployment Investment Option Is Right for You?

The answer depends on your financial situation, how long you will be deployed, and what your long-term goals are. That said, in my opinion the first three investment options, the Roth IRA, the TSP and the Savings Deposit Program, are the best place to start.

Here is a simple way to prioritize:

• Start with the SDP if you meet the eligibility requirements. A guaranteed 10% return is unmatched anywhere else and should be your first priority while deployed.
• Max out your Roth IRA next. The ability to contribute tax-free combat pay and make tax-free withdrawals in retirement is an opportunity that many do not have access to.
• Contribute to your TSP to take advantage of tax-free growth, and if you are under the Blended Retirement System, any matching contributions you are eligible for.
• Consider self-directed investments only after you have maximized the first three options, as they don’t offer the same tax advantages but provide more flexibility for short-term needs.

The combination of these three military-specific investment opportunities is truly unmatched. Take advantage of it while you can, these benefits exist precisely because of the sacrifice you are making by serving in a combat zone.

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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