Veterans Financial Literacy: How To Prepare For Retirement

When politicians discuss veterans’ care, they are almost always referring to healthcare and how they cope up with life after serving. But there’s another major problem many veterans face when they leave their military service: financial care.

Financial problems are an even larger factor for veterans than they are for civilians. A FINRA Investor Education Foundation study from a few years back found that vets are 9% more likely to have credit card problems and 40% more likely to be underwater on their home mortgages.

We also shouldn’t forget about how mental health affects some veterans due to challenging lifestyles, they may experience PTSD, traumas, anxiety, etc. So as much as we put importance to the financial problems they go through, it is also apparent that we have them checked. And thanks to how the world is constantly improving or changing we now have online therapy sites that you can visit or talk to.

The BRS Didn’t Solve Everything

An even more recent study by the Government Accountability Office found that veterans are continuing to struggle with financial literacy, despite the introduction of the Blended Retirement System.

The BRS started on Jan. 1, 2018. Anyone who enlisted after that date was automatically enrolled. And anyone who enlisted between 2006 and 2018 had the option to remain with the legacy system or join the BRS.

Basically, this new system is a three-part strategy to helping with financial problems for veterans. It includes a Thrift Savings Plan (which is similar to a 401(k) retirement plan), an annuity, and a continuation pay bonus at the 12-year mark for those opting to stay in for an additional four. 

The problem, however, is that this new system isn’t always easy to understand. According to that GAO study, “service members will make more financial decisions that may impact their ability to successfully save for retirement under BRS than under the Legacy Retirement System, which makes providing effective financial literacy training to service members particularly important.”

According to veteran studies research fellow at the American Enterprise Institute Rebecca Burgess, this lack of financial literacy tools is an even greater stressor to vets than accessing mental health resources.

Solving For Debt and Savings

In this article, we broke down many of the obstacles veterans face financially when they leave military service. These can include everything from the cost and strain of frequently moving to being targets of fraud at higher rates than civilians. We went on to show how these problems can be overcome as veterans plan around retirement because the good news is that there are options available to serve veterans—they just need to know about them.

At the end of the day, however, the financial obstacles fall into two categories: debt and savings. Addressing each ahead of time is important in veterans overcoming this problem.  And then, knowing whom to reach out to and how to do so for help and information is crucial to planning a financially sound retirement.

Tackle Debt

Planning for retirement and saving for it is virtually impossible if you are also battling out-of-control debt. Unfortunately, veterans face more serious debt problems than civilians. 

According to that first FINRA study, credit cards and late mortgage payments top the list for veteran debt concerns. And while many vets have access to some kind of health care – either through the VA or a post-military employer-sponsored plan – medical debt can still wreak havoc on anyone’s financial picture.

Fortunately, there are tools at hand to help out here:

  • Free credit reports are rather easy and painless to get online. These are great tools to assess exactly where everything sits financially and what areas someone can work on improving. Checking once or twice a year can really offer a helpful perspective.
  • Budgeting tools are great at helping turn around someone’s cash flow situation. That’s as true for veterans as civilians. Intuit’s Mint is a great resource here.
  • Veteran-specific groups such as the NFCC,, and Veterans Plus have programs tailored to addressing debt problems for vets. 

These tools are important in taking care of the first and largest problem when it comes to retirement planning. After all, you’ll never be able to adequately save for your golden years if you are still being crushed by debt.

Retirement Savings

Even if a veteran is debt-free, that doesn’t determine if they are set for retirement. No one can work forever; and so, saving for retirement is paramount in the planning process. 

As noted above, veterans have not always been given the best of tools when it comes to planning for retirement. Even the introduction of the BRS, which is an improvement, doesn’t solve all concerns. 

First of all, the annuity part isn’t enough to cover all expenses in retirement, even for the most cost-conscience veteran. The continuation bonus comes with a full 16 years of service, which might not be available to everyone. And finally, the Thrift Savings Plan is only helpful if you contribute to it throughout your years of service. On top of all of this, veterans who enlisted prior to 2006 didn’t even have the option of signing up for the BRS.

This still leaves many vets without proper savings or even plans to save for retirement. Fortunately, here too there are tools available to help out.  

One of the most important parts of retirement savings is finding the right plan. If you are a veteran with a post-military job, see if it has a 401(k) or other retirement savings plan on offer. Oftentimes, employees aren’t even aware of what options they have when it comes to saving.


Virtually all defined-contribution plans offer deferred taxes for savings or even tax exemptions on deductions in retirement. Many plans also come with employer-matching contributions. Find out if yours does and try to reach that contribution level to get the most matching you can.

Finally, veterans do have other sources of help, and information civilians don’t. There are plenty of organizations like the Foundation for Financial Planning and Veterans Advantage that has veteran-specific programs to help get vets started with their savings. 

As more and more studies come out showing the problems of veteran financial illiteracy, these kinds of tools are even more important. And with so many available to both help combat debt problems and to help set up a savings plan, veterans can overcome these problems.

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