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5 Things Military Members Don't Know or Miss About Their Ultimate Retirement

Retirement Funding

Most military officers don't retire, retire when they retire from the military.  We have a second or ultimate retirement and that retirement is an expected phase in life for anyone who has spent a number of decades working, either as an employee or a business owner. That said, as much as people think they know how retirement works, there are a number of common things that many people don’t know or seem to miss even though the logic or evidence may be right in front of them.

Sometimes many of us have a bad habit of focusing on what interests us and missing those things that we don’t translate as directly related to our interest or goal. We only realize later, after the fact, how logical these things are towards a better retirement. Here are five items that people don’t know or miss when thinking about retirement and how it applies to them:

1. You Can Start Saving Anytime, Even if You've Already Retired from the Military

Many believe that retirement is only viable when one starts to save very early on. There is a myth that only those who started saving in their twenties or similar are the ones who produce big savings accounts that make them millionaires in retirement. This is based on a half truth that has morphed through cultural fairy tales. It is true that compounding allows money to build in value over time. However, saving is not exclusive to those at the beginning of their career. It’s quite possible for someone, especially a retired military officer in a second career, to save later in life and still produce the same amount of retirement saving.  It will require disciplined execution of a sound financial plan though.

2. Wait a Bit Longer for Social Security

Yes, reaching age 62 means a person can immediately begin receiving benefits from the government. And given everything one has been hearing, you might think it makes sense to start early in case the program disappears later. However, the fear of Social Security ending has been around for decades. What is a fact is that if a person waits at least until full retirement age, or age 67, people can generate a far bigger benefit, about 8 percent a year from the value received for age 62.1 That’s a difference of thousands of dollars a year.  It is also important to note that your surviving spouse, if you have one, will likely receive the larger benefit as well.

3. You’re Likely Going to Be Around, Longer

Many of the general lessons taught to people about retirement are based on principles developed when people usually passed away by age 65. In fact, many people 50 years ago didn’t make it to 65. It was quite common for people to die closer to 55 and 60. Today, average age mortality nationally is 75 and for many it can be well into their 90s.2 That means retirement savings have to last longer to cover living costs. Many baby boomers and older Americans are learning this surprise the hard way with the advent of modern medicine letting them live longer but also creating more expense doing so.

4. You’re Also Probably Going to Be a Caretaker

Add to the fact that people will live longer than in the past, they will also likely be taking care of older relatives in their later years. Caretakers who are also children of senior parents are finding themselves being caretakers in their 40s and 50s of parents in their 70s and 80s. This could  limit your ability to save and invest money.  Additionally retirement might no longer be a great free time; instead for many it’s turning into another period of responsibility after the kids leave home.

5. Goals Help People Live Better

Psychologically, people who have clear goals tend to live longer, healthier and function in more productive lives than those who go through life without purpose.3 And working for a specific retirement is clearly a long-term goal that requires focus, planning and commitment. Retirees who continue to keep working towards their life goals are frequently found doing the same year after year, living longer and enjoying a greater life than others who maybe just give up after retiring from work. These people were not defined by their past work; they are engaged in their future interests.

Retirement doesn’t have to be a big mystery and guessing game for a destination. Clearly, using a bit of common sense helps, but also increasing our awareness of choices available matters significantly too. Whether it be through a financial advisor or personal education, the trick to retirement success is to learn and know what options are available rather than waiting for retirement to just happen.

1 https://www.ssa.gov/planners/retire/1960.html

2 http://www.healthdata.org/data-visualization/us-health-map

3 https://www.cdc.gov/hrqol/wellbeing.htm

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