LDS Living Magazine - Let the Military Handle It?

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Let the Military Handle It?
by Dave Ramsey

Dear Dave,

My husband has been active-duty Navy for 22 years. He plans to stay in for 30 years, and retire with a pension equal to 75 percent of his base pay. Considering that he’ll receive that money, should we still go ahead and save 15 percent in a Roth IRA for retirement?

Megan

Dear Megan,

That’s a pretty nice pension, so I don’t mind if you turn down the retirement saving a notch or two. I’d be okay with 10 percent instead of 15, but I still want you guys to save lots and lots of money!

Even though a military or government pension seems pretty stable, you should never rely on things that are beyond your control. So, don’t assume the Navy is going to take care of you. I’m not knocking the military, Megan. I just want you to have a separate nest egg over and above what they will provide. If something unforeseen happened and your husband couldn’t make it to 30 years, you guys would need an additional source of income more than ever!

– Dave

Photo by Eugene Myers

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Military Retirement Posted by Michael from Missouri Dave just so you know, the military is good but if her husband were to pass away that money stops and unless they opt for the survival benefit plan his wife would get nothing. With SBP she would get 50% of the retired paycheck until she remarried. (unless they pass the changes that are being considered.)