Military Financial Report Video Series - Episode #7 - Military Retirement Information

Check out the seventh video in my Youtube series.  I show you the value of your military retirement, using the U.S. treasury 30-year bond interest rate.  I also show how rising interest rates can impact the "value" of your retirement.

Top 3 Personal Finance Sites and Apps

The first step towards financial success is to track your money. You need to know where your money is going before you can make any sound decisions. There are many personal finance websites and apps that can help you do this. They integrate into your bank accounts and have amazing tools to help you manage your finances. Many of them are free so you may have to deal with some advertisements, but other than that, they are strong/powerful tools to aid you with your finances. Here are the top three that I’ve had personal experience with and/or had discussed with others about.

• Mint - I used this for almost a year and I liked it a lot. I was able to integrate all my accounts in it and it helped create good trackers and it let me track some of my personal goals. I had it on my desktop and the iPhone app. The iPhone app had a lot of advertisements, but it’s worth it. I want this blog to become a good source of information and I also rely on advertisements to help earn income. The app is owned by Intuit so if you’ve used Quicken to prepare your taxes, then some of your Mint information can quickly transfer over when filing your taxes.

  
• You Need a Budget (YNAB) – The full service costs money but it offers a social experience to it too. You can go on their forums and talk to others, view their tutorials and lessons and get real advice from professionals. They’ve recently released a free “lite” version of their product and it’s still very powerful. Some of my friends love the feature that gives you tailored advice if it notices you’re living paycheck-to-paycheck. I’ve been helping people with their finances for over a decade now and a lot of people don’t like asking for financial help (especially men). A friend of mine loved getting good advice from the app while retaining his privacy.

  
• Personal Capital – A friend personally recommended I post about this one. This site is less about the budget and more about investing and managing your money. I’ve read a lot of good reviews from users and they are very happy with the reduced amount of advertisements compared to Mint.com. I’ve never personally used it before but I trust the recommendation.

These are very powerful tools that you can use. Working with a Certified Financial Planner can be very costly, so even paying $60 for YNAB will save you money over the long run. Check out each website and let me know which one you prefer or like to use.  What other sites do people use?

Financial Advice for Military Reduction In Force (RIF)

Most departments in the Department of Defense are facing a Reduction In Force (RIF) which is the military's version of "downsizing".  The Air Force is currently looking at military members with more than 1 year of service and less than 18 years.  Officers and enlisted have different programs, but leaving at 10 years or more would have significant financial implications for many.  Here are some suggestions on planning for a potential RIF.

1. Emergency Savings - The most important thing in financial planning and for preparing for emergencies is to have an emergency savings account.  This should be about 6 months of living expenses in a "high-yield" savings account that you can access when needed (1 week or less).  I use Capital One 360, and I have a referral link and more analysis on this blog post: Capital One 360 Link.  This emergency savings account will be your first line of defense against a RIF.
2. Post-Service Entitlements - Make sure you take full advantage of all post-service entitlements.  If the military isn't going to be as loyal as you were during your military service, then take as much as of the entitlements as you can.  The Montgomery GI Bill and Post 9/11 GI Bill will be the primary sources of entitlements for those going back to school if RIF'd.  But some entitlements have a time limit to use them like a VA home loan and both GI Bills (usually 10 years after service).
3. Start Saving Now! - If you were reluctant to start saving before, then now is a perfect time to take advantage of the ROTH or Traditional Thrift Savings Plan.  You will be unable to contribute to these once you are separated, but you can roll it over to an IRA.  It's a cruel system, but unless you qualify for the 15-year retirement that may be offered, then you get 0% of your retirement.  In a civilian company you would retain some portion of your pension and/or your 401(k) with employer contribution.  In the military, you get NOTHING!  It's called the retirement cliff and is a quick way for the military to make and save money in the long-term.
4. Reduce Your Debt - If you get notified that you will be RIF'd, you may be facing limited to no income for a while and you should use your current income to reduce your overall debt totals.  I suggest going for the smallest balances first and then roll all that money into the next smallest balance.  If you two balances are similar then pay off the higher interest rate.
5. Lastly, Stay Connected - If you get RIF'd, it's not a good idea to start all over with a new passion in a new place you've always wanted to go.  There are few exceptions where this has worked for people, but the best thing to do is to go where you have support (i.e. family, old neighborhood, old job) and find a job in a similar field you were in to ensure you have continuity.  Unemployment may have dropped to 7%, but some people (like me) feel this is just economic trickery and doesn't reflect an actual increase in jobs.  Corporations are able to borrow money at low to no interest rates and are able to hire people because it doesn't affect their bottom line.  The interest rates will have to go up soon and corporations will cut employment to restore their bottom lines.

This is a tumultuous time for many but smart financial moves now can help reduce anxiety and prepare for a possible RIF.