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Planning for retirement is one of the most important financial steps you can take to ensure a secure and comfortable future. As a service member, you have unique retirement benefits and options available to you. Navigating these can be overwhelming, but understanding your choices and making informed decisions can help you achieve your retirement goals.
From taking advantage of military-specific retirement programs to managing debt and utilizing financial tools, there are many resources to help you plan for retirement. Keep reading to learn how to navigate the path to your golden years, worry-free.
For serving our country, you have access to a variety of retirement account options that can form the foundation of your retirement plan. You may also choose to open retirement accounts that are available to civilians, such as IRAs.
The BRS combines a traditional pension with contributions to the Thrift Savings Plan (TSP). Under BRS, you receive a pension after 20 years of service, along with automatic and matching contributions to your TSP.
The TSP is a retirement savings and investment plan for federal employees and members of the uniformed services. It offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
IRAs provide another way to save for retirement. There are two main kinds: Traditional and Roth IRAs. With a Traditional IRA, contributions are made pre-tax, and the returns grow tax-deferred until you withdraw them in retirement. With a Roth IRA, you make contributions after-tax, yet qualified withdrawals are tax-free.
A CD IRA combines the benefits of a certificate of deposit (CD) with the tax advantages of an IRA. They provide fixed interest rates and are a low-risk investment, making them a great option for conservative investors looking to save capital while earning a modest return.
In money market IRAs, your contributions are invested in low-risk securities, providing a conservative approach to retirement savings. That can make it an appealing choice for individuals who prioritize safety and accessibility over potentially higher returns offered by riskier investments, like stocks.
Diversifying your investments guarantees that you don’t have all your eggs in one basket, offering a balanced approach to risk and return.
By including a mix of stocks and bonds in your retirement portfolio, you can help balance your risk and return. Stocks have growth potential, while bonds offer stability and income. Adjust your allocation based on your risk tolerance and timeline.
Mutual funds and Exchange-Traded Funds (ETFs) let you invest in a diversified portfolio of stocks, bonds, or other assets. They are a convenient approach to accomplish diversification without having to choose individual securities.
CDs are low-risk savings accounts that typically offer higher interest rates than regular savings accounts. These can be an excellent choice for conservative investors who want a secured return on their investment and are willing to tie up their funds for a specified length of time.
Money market accounts provide higher interest rates than traditional savings accounts and are considered safe investments. They offer liquidity and can be a great place to park your cash while earning some interest.
It’s important to manage your debt to avoid financial strain in retirement.
Before focusing solely on retirement savings, it's crucial to manage and pay off high-interest debt, such as credit card balances. Reducing debt improves your financial health and frees up more money to contribute to your retirement accounts.
If you have a mortgage, consider strategies for paying it off before retirement. Retiring without having to make a monthly mortgage payment can significantly reduce your expenses and provide financial peace of mind. Be sure to weigh the benefits of keeping a low-interest mortgage versus using those funds for potentially higher-yielding investments.
Financial calculators are useful tools that can help you on your financial journey. By making informed decisions, based on calculations, you can stay on track with your financial goals and make the most of your retirement planning efforts.
Calculators for retirement can help you predict how much you need to save for retirement based on your current savings, expected retirement age, and desired lifestyle. They can also help you understand the impact of different savings rates and investment returns.
Take advantage of Armed Forces Bank’s retirement planning calculators, including the Roth IRA Calculator, Roth IRA Conversion Calculator, Regular IRA Calculator, Social Security Benefits Calculator, and the 401k Calculator.
If you're dealing with debt, loan calculators can help you grasp the total cost of your loans, including interest, and develop a repayment strategy. They can also assist in comparing the benefits of paying off debt versus investing.
Explore our loan calculators: Current Loan Calculator, Home Equity Credit Calculator, Loan Comparison Calculator, Amortization Schedule Calculator, Debt Consolidation Loan Calculator, Line of Credit Payoff Calculator, and many more.
If you are 50 or older, you can make catch-up contributions to your retirement accounts. This allows you to save more than the standard contribution limits, helping you boost your retirement savings as you move towards retirement age.
For instance, in addition to the annual standard contribution limit for the TSP in 2024 – which is $23,000 – you can contribute an additional $7,500.
Creating a retirement budget is important for planning your financial future. Begin by estimating your retirement expenses, including housing, healthcare, travel, and leisure activities.
Then, compare these expenses to your anticipated income from retirement accounts, military pensions, Social Security, and other sources to ensure you can sustain your desired lifestyle.
Your retirement plan should be flexible and evolve with changes in your financial situation, goals, and market conditions. Regularly assess your investments, savings progress, and overall retirement strategy to ensure you're on track.
Be ready to make adjustments as needed – whether that's increasing your savings rate, tweaking your investment mix, or revising your retirement budget. Staying adaptable and proactive will help you navigate unexpected changes and keep your retirement goals attainable.
Planning for retirement involves careful preparation and informed decision-making. By understanding your military retirement benefits, diversifying your investments, managing debt, utilizing financial calculators, and more, you can create a robust retirement strategy.
At Armed Forces Bank, we offer a range of financial products and services to help you achieve your retirement goals. Whether you're interested in a CD IRA,* Money Market IRA,** or need assistance with financial planning, our team is here to support you.
What else can we help you find?
Money Market IRAs* and CD IRAs**
Premier Money Market Accounts
Certificates of Deposit (CDs)
All Financial Calculators
Member FDIC
*CD IRA
**Premier Money Market IRA