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Here Are 3 Of The Best States For Military Retirees

June 26, 2020 By Tamila McDonald Leave a Comment

best states for military retirees

When your military career comes to a close, you are often faced with a tough decision. Military retirees can essentially move to any state in the nation, allowing them to set up their post-military life. Deciding where to go is a challenge for many, especially since every state offers something different. If you are trying to figure out the best states for military retirees and whether one, in particular, is right for you, here’s what you need to know.

Understanding Military Retirement

Military retirement isn’t always the same as a traditional retirement. Active duty personnel can be eligible after 20 years of service. Suggesting that a person signed up for the military at age 18, they could qualify for retirement when they are 38 years old.

That means many military retirees aren’t necessarily leaving the workforce. When they decide where to retire, they usually factor in job prospects, as many will continue working full-time, potentially for the next two to three decades.

However, you aren’t required to retire from the military after 20 years of service. A person could remain in the military until they reach the mandatory retirement age of 62, in most cases, creating an opportunity for over 40 years of service.

There can also be other forms of military retirement to consider, as well. For example, a person may end up medically retired before the 20-year mark. Depending on the reason for the retirement, whether they choose to pursue additional work opportunities after separating from service could vary.

Choosing Where to Head After Retiring from the Military

Which states are best for military retirees isn’t universal. Each of the situations above could lead to different needs, altering where they may be best off.

Additionally, there are also other factors to consider. Some retirees would rather be near friends and family or in a particular region. If this preference is important, it needs to be part of the decision-making process.

Ultimately, military retirees need to examine the pros and cons of different options. That way, they can choose a destination that will serve them well for the years, if not decades, to come.

3 of the Best States for Military Retirees

1. Virginia

One of the biggest reasons to choose Virginia is for federal jobs and defense-related contractor positions. With its proximity to Washington DC and numerous government and military installations, opportunities in those arenas are plentiful.

Additionally, the climate is relatively mild, and housing in certain cities is decently affordable. There’s also access to military bases for medical care as well as VA hospitals in many metro areas.

It’s important to note that Virginia does fully tax military retirement pay. However, if you’re looking for a state with exceptional job opportunities for those with military and defense experience, it’s worth keeping on the table. Plus, sales tax in Virginia is relatively low, helping to offset the presence of an income tax.

2. Florida

If you don’t want to pay state income tax on your military retirement pay, Florida is a great option. The state doesn’t have its own income tax, allowing you to keep more of your money in your pocket.

Florida also offers a great quality of life for those who would like to retire near beaches and in a warmer climate. Additionally, the healthcare services for veterans are fairly accessible. Along with VA facilities, there are numerous military bases throughout the state, giving retirees access to certain clinics and other on-base or on-post amenities.

Defense contractor and federal positions are also widely available in Florida. This creates career-oriented opportunities for those who aren’t leaving the workforce.

3. New Hampshire

When it comes to state income taxes, New Hampshire only levels one on dividend and interest. That means, by and large, your military retirement pay isn’t going to be taxed.

Additionally, the state has a surprisingly high number of defense contractor positions, something that may appeal to military retirees who aren’t leaving the workforce yet. The state doesn’t have a sales tax, either, which makes daily living more affordable.

Housing itself isn’t necessarily incredibly expensive in New Hampshire. However, the property tax rates are some of the highest in the nation. But, since there isn’t income or sales tax to contend with, that isn’t necessarily a major financial burden as it is offset by savings in taxation.

Ultimately, all three of the states above are top contenders for anyone retiring from the military. However, they each come with pros and cons. It’s wise to consider your unique needs and preferences as you make a decision. That way, you can head to a state that offers everything you require and is a place that you’ll enjoy long-term.

Can you think of any other states that are great for military retirees? Share your thoughts in the comments below.

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Skipping the Extra Bedroom Could Mean Having $500K More in Retirement

June 15, 2020 By Amanda Blankenship Leave a Comment

An extra bedroom has become a fairly common (and acceptable) waste of space in your home. According to Finder.com, there are 34 million more bedrooms in America than there are people. However, the habit of purchasing extra space for your home could seriously be costing your retirement savings.

How an Extra Bedroom is Killing Your Retirement

Typically, spare bedrooms are largely unoccupied. Sometimes they house a lightly-used home office or an extra bedroom for company when they come to town. In general, your spare room doesn’t get more than two weeks’ worth of use per year.

Here is a piece of advice: just buy a pullout couch for your guests and downsize. In metro areas, a four-bedroom house is about $100,000 more expensive than a three-bedroom (plus the interest on your mortgage).

Let’s get a little more specific. In Boston, for example, the median price for a four-bedroom house was $540,000, while a three-bedroom sat around $380,000. Assuming a 20% down payment and a 30-year fixed mortgage rate of 4%, that is a difference of over $600 per month.

Now you’re probably thinking, “what about in smaller cities?” Well, there is still potential for savings. In Las Vegas, four-bedroom homes are $80,000 more expensive. Chicago home buyers will save $100,000 opting for the smaller space.

Breaking Down the Potential Savings

If six figures in initial savings isn’t enough to motivate you to give up the spare room, don’t worry. As mentioned above, in a city like Boston, this could equate to $600 per month in savings. That amount of money could make it possible to live in a better area and still be within budget. It could go towards paying off debt and help you reach financial freedom earlier.

Best of all, it could add serious funds to your retirement. If you invest the extra $600 per month and earn 5% per year, you will have an additional $500,000 stowed away by the time you pay off your home. Boomers closer to retirement may not be excited about moving, but downsizing by one single room could offer six figures of added retirement security (or extra trips with your grandkids).

Younger families focused on giving their kids their own bedrooms may think downsizing isn’t for them either. Making your children share a room doesn’t make you a bad parent and it can give you the financial freedom to spend more money and time with them.

No matter how you look at it, Americans are wasting money on extra bedrooms in a big way. In some cases, it could cost them their retirement. Readers, would you consider giving up your spare room to help pump up your retirement savings?

4 Ways to Avoid Filing for Personal Bankruptcy

June 10, 2020 By Susan Paige Leave a Comment

Debt is part and parcel of life to many people regardless of how much they earn per month. However, this can sometimes become too much to bear to a point where bankruptcy seems the only way out. Having to face the pressure from your creditors every day can push you towards that route. What’s more worrying is the fact that you can be a victim regardless of your previous financial strength.

The good news is that you can avoid falling into this trap. Bankruptcy doesn’t have to be the only solution to your financial problems. In addition, it will leave big wounds not only in your credit report, but also in the life of your spouse and family. Most financial experts rank it among the most significant life-altering events that could have a negative impact for a long time. So, before you get to a point where you need to call a personal bankruptcy lawyer, you can try out some of the tips in this article.

Sell Your Assets

Sometimes, you can be at the brink of bankruptcy, but still have assets worth a lot of cash. Keep in mind that being threatened with bankruptcy has nothing to do with your personality. It doesn’t mean you’ve made the worst financial choices because even the finest of people have also been victims before. Selling part of your property may salvage you in this time of need. The best way to deal with this issue is by assessing everything you own.

For example, do you have two vehicles in your garage? Well, if you don’t need the second one, then, sell it and use the proceeds to pay off part of the debt. You could also look through some of your electronics and other household appliances. These don’t have to generate a lot of money, but just enough to reduce the burden. In fact, it is a better option than being forced to surrender all your assets. Another thing you should note is that this is a temporary situation. You will be able to resume your normal life once you’ve tackled the problem at hand.

Restructure Your Mortgage Payment Plan

Are you still paying off your house? You can take advantage of this to stave off the threat of bankruptcy. One of the most common monthly or annual expenditures among many people is mortgage payment. If your current plan takes up a lot of your cash every month, you can consult your housing lender and device a new strategy. There are two ways you can make this situation beneficial.

The first option is to restructure the mortgage payment plan. Of course, this will depend on your agreement with the seller, but it should work out just fine. By stretching the installment period, you’ll have a lower monthly payment. This should ease your financial pressure and give you enough space to deal with most urgent debts. As you do so, remember that your mortgage might yield more interest and you’ll end up paying more money than your initial agreement.

If that doesn’t work for you, then, there is another way to go about it. Talk to your housing lender and see if they will accept a temporary refinancing of your mortgage plan. In other words, you’ll still be working under the initial contract, but with slight changes, at least for the first few months. This way, you’ll be able to work out your problems before they get out of hand. Whichever choice you take, it will be worth the struggle at the end of the day.

Get On A Strict Budget

The main reason why some people find themselves flirting with bankruptcy is because of poor budgeting. The fact that you have enough income to finance all your needs doesn’t mean you should spend all the money you have. One could have thousands of dollars at the start of the month, but end up borrowing more funds even before mid-month. Luckily, this is a habit that you can correct before it lands you into trouble.

The first step to doing so is by budgeting your money. If you plan for your income even before it lands in your wallet, you’ll be able to pay off some of the debt. Do not strategize in your head; write it down whether on a paper, in Excel, or any other budgeting software. The moment your monthly dues arrive at the bank, you might not have enough time to structure your budget because of excitement.

Increase Your Income

The most obvious of all points in this post is to generate more money. Many people overlook it and just depend on their one 8-to-5 job to cater to all of their needs. Well, that might work, but it is advisable to add something on top of it if possible. Remember, one reason why you are heading the bankruptcy route might be because you don’t generate enough money to serve all your monthly expenses.

The best part about this is that you might not need to look for a second job to earn more. Is it possible to work overtime at your workstation? If so, take advantage of it and gain as much as you can. Another option is to look for a part-time job that you can work for a few hours every evening. Anything that can generate a few dollars is a great idea at this point.

Increasing the monthly income is not for everyone. Perhaps, you are in a situation where you cannot re-adjust your daily routine. Well, if this is your story, then, you can ask for help from those around you. However, this doesn’t mean going for another loan as that could be tragic. If your family members and close friends can bail you out, do not hesitate to seek their assistance. A few extra dollars could do wonders for you.

Conclusion

Being threatened by bankruptcy is not something new. Contrary to popular belief, it doesn’t only get to those with poor financial habits. A lot of organized people may also find themselves at the edge due to a small mistake. As such, the way you got to this point doesn’t matter; what matters is how you are going to salvage yourself. It is not impossible to go back to your previous financial stability. All you need is a little extra effort and a good strategy to deal with the most demanding debts.