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Veterans Day Retirement Tips

NEW YORK (MainStreet) — Retirement planning for the 22 million military veterans and 1.4 million active service members has its own nuances.

Veterans and active service members have different benefits, lifetime earnings patterns and other issues to consider compared with civilians.

Many veterans enter second careers after their military one ends. Vets need to manage both their military pensions and maximize their retirement savings through an employer-sponsored retirement plan or IRA, said Larry Rosenthal, an independent financial advisor with ING Financial Partners based in Washington, D.C.

Veterans should seek advice from a financial advisor to help manage their increased cash flow, establish a plan to pay for their children's college education or retire any existing debt, he said.

"Upon exiting the military, they have to learn to maximize their new benefits," he said. "They often have the mentality of the military taking care of their needs. Now they have to figure out things for themselves. It is a whole new world to them. They usually adjust very quickly."

Some veterans have additional income generated from their rental homes, which can double their income and creates additional opportunity for investments.

One option is to build their reserves, rollover their military retirement into an IRA and maximize the matching programs a new employer may offer in their 401(k) plan, Rosenthal said.

Financial advisors suggest that spouses of active members who are serving overseas should be engaged in the planning process as well. This step ensures that finances and retirement planning are not neglected while the service member is away from home.

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