Being in the military can be a stressful profession. but knowing the 5 best investments for military can ease some of that stress. The military is a profession like any other, so investing wisely will make the eventual transition to the civilian world that much easier. For more information, watch some military videos to see what the military is like.
- Thrift Savings Plan. This is a retirement plan set up specifically for civilians employed by the United States Government and members of the military. The sole purpose of TSP is to be a source of retirement income. This program is set up the same way many private corporations set up their 401k programs. The Thrift Savings Plan is a contribution plan where the amount of retirement income you receive will depend on how much money was contributed and how much interest was earned on the money.
- U.S.Savings Bond, Series EE/E. A savings bond can be purchased by anyone and it is a safe and low risk way to save for retirement. Any bonds that are bought will earn a fixed rate of interest. The interest that is received for these bonds is added monthly and compounded semiannually. Savings bonds must be held for at least a year and there are penalties if the money is taken out early. These work great for investments for military members because very little work needs to be done. These are purchased and then they are left to accrue interest.
- Savings Deposit Program. The SDP is a program that is set up as investments for military members who are serving in a combat zone. To be able to contribute, the member must be in one of the designated zones, must be receiving Hostile Fire Pay and must be deployed for at least 30 days consecutively or one day in each of three consecutive months. The member can deposit up to $10,000 into this account. This money will earn 10% interest annually. While the money is in the account, the military member may withdraw the accrued interest over the $10,000 quarterly. Interest will continue to accrue for up to 90 days after the member leaves the combat zone. The account can only be closed once the military member has left the combat zone.
- Roth IRA. Roth IRAs are one of the most common ways anyone saves for retirement. To open a Roth IRA, the person must have a job. If they have spouse, working or not, the spouse can open and contribute to their own Roth IRA. The only stipulation with this is that the couple must then file jointly on their taxes. The amount that can be contributed to each Roth IRA is $5,000 per year. This money then sits in the account and accrues interest. The money can only be withdrawn five years after the account was created and if you are 59½ or older. This account works great as investments for military members because an allotment can be set up for a certain amount to be withdrawn each month and deposited into their Roth IRA.
- Certificates of Deposit. Certificates of deposits, or CDs, are commonly offered by banks and credit unions. These are great investments for military members because they are insured and there is almost no risk involved. Each CD will have a certain term length and will have a fixed interest rate. These CDs need to be held to maturity because there are huge fines if they are not. Once CDs have matured, the amount of the CD plus accrued interest is available to be taken. A wise investor would take that money and reinvest that into another CD.
Military professionals do vary from workers in the civilian world, but they way they invest does not have to. There are investments for military members set up so that only military members can take part in them, but they should not limit themselves to just these programs. Having a diversified investment portfolio will take away some of the stress of investing.