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Retired Military Finances 101: Is It Too Late to Start a Retirement Fund? Thumbnail

Retired Military Finances 101: Is It Too Late to Start a Retirement Fund?

Retirement Funding

Sometimes life gets in the way, and it is quite possible that you could retire from the military with minimal retirement assets. The good news is that you have a military pension, Social Security and potentially VA Disability Compensation. The bad news is that it may not be enough to support your desired lifestyle. Like planting a tree, the best time to start saving for retirement was 30 years ago. The second-best time is today. It's never too late.

What is Compound Interest?

Before we talk about saving for retirement later in life, let’s talk about compound interest. Compound interest is one of the best reasons to start saving for retirement as early as possible.

When you invest money, you earn interest on the initial amount (the principal); over time, you also earn interest on the already earned interest. This snowball effect can lead to significant investment growth over the years.1

For example, if you start saving $200 a month at age 25 with an average annual return of 7%, by the time you reach 65, you could have more than $500,000.2 However, if you start at age 45, with the same monthly contribution and return rate, you might only accumulate around $100,000 by 65.

While this difference highlights the benefits of starting early, it doesn’t mean starting a retirement fund later in life is useless.

How to Save for Retirement Later in Life

If you’re starting your retirement fund later in life, you may have to approach retirement planning a little differently. Here are some tips to help:

Increase Your Savings Rate
One of the best ways to build your retirement fund quickly is by increasing the amount you save each month. While younger people might contribute 10–15% of their income, those starting later might want to aim for 20–30% or more, depending on their goals.

Delay Retirement
If possible, consider retiring later. Delaying retirement, even for a few years, allows you to save more and reduces the number of years you'll rely on your retirement savings. In addition, delaying Social Security benefits can increase your monthly payout, increasing your retirement income potential.3

Maximize Retirement Accounts
Ensure you take full advantage of tax-advantaged retirement accounts like a 401(k), 403(b), TSP, or IRA. For those over 50, "catch-up contributions" allow you to contribute more than the standard limit, giving you a chance to boost your savings. As of 2024, annual catch-up contributions can be up to $7,500 annually.4 For those who turn 60 - 63 in 2025, you can make catch-up contributions of $11,250 as opposed to $7,500

Reduce Expenses and Debt
As you approach retirement, reducing your living expenses and paying off high-interest debt can free up more money to invest in your retirement fund. This also helps reduce the income you’ll need in retirement, making your savings stretch further.

The Benefits of Starting Now

Even if you’re starting late, building a retirement fund can offer several benefits:

  • Peace of mind knowing that you have some financial security for your later years
  • An improved lifestyle in retirement, even if you don’t accumulate millions
  • A retirement fund that not only supports you but can also help provide for loved ones or leave a legacy

Remember, every dollar saved is closer to a more secure and enjoyable retirement. So, no matter where you are on your financial journey, it's never too late to start building the future you deserve.

Military Finances are Different

The fact that you have an inflation adjusted military pension makes your retirement planning different than a civilian's. That is not the only way the finances of an Active or Retired Senior Military Officer or NCO is different than a civilian's. That's why we think you should work with a financial advisor or planner that deals with your unique issues each and every day. If you'd like to find out how we work with people just like you, use the button below to schedule a free initial consultation.

If you found this article useful, you might like the following blog posts:

Retired Military Finances 201: The New "Extra-Mega-Special-Bonus Catch-up Contribution"


Retired Military Finances 101: How Much Can I Make if I Claim Social Security Early?


How Much Do I Need to Make After Military Retirement?



  1. https://www.investopedia.com/terms/c/compoundinterest.asp
  2. https://www.nerdwallet.com/calculator/compound-interest-calculator
  3. https://www.ssa.gov/benefits/retirement/planner/delayret.html
  4. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions

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