Financial Advisors For Military Personnel: Everything You Need To Know

As of November 2023, there are approximately 2 million active duty and selected reserve service members. If you are part of that group—or you’re a military veteran—you may need the help of a financial advisor due to the unique nature of your jobs and benefits.

Military members often have to deal with relocations and deployments, which can make coming up with a stable financial plan difficult. And with the complexity of the benefits system, it can be difficult to know what you’re eligible for and how to best take advantage of those benefits.

A skilled financial advisor can help you navigate these challenges and create and follow a personalized financial plan.

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Benefits and Programs for Military Members and Veterans

As a military member or veteran, you may have access to unique benefits, including:

• Retirement plans: Depending on your years of service and enlistment date, you may be eligible for one of the main military retirement plans. If you’re eligible, you could qualify for government contributions or lump sum bonuses.
• Pensions: If you meet the eligibility criteria and served during one of the following wartime periods, you may be eligible for the Veterans Pension program: World War II, Korean conflict, Vietnam War or the Gulf War. Depending on your income and assets, you could qualify for up to $27,609 per year in pension payments—the maximum annual pension rate (MAPR) for veterans with no dependents. If you have dependents, that MAPR could be higher.
• Disability compensation: Veterans with service-related disabilities, including physical or mental health conditions, can qualify for tax-free monthly payments as compensation. Depending on your disability rating and the number of dependents you have, you could qualify for monthly payments between $171.23 and more than $4,400.
• Medical benefits: Qualifying veterans can receive the Department of Veterans Affairs (VA) medical benefits package, which includes preventative, primary and specialty care.
• VA loans: If you’re a veteran, you can take advantage of VA loans to buy a home with a low-interest mortgage and no down payment.
• GI Bill: If you served in the military, you may be eligible for GI Bill benefits, which can help you pay for education and training programs.
• Life insurance: As a military service member, getting an individual life insurance policy can be challenging since you may have to serve in high-risk areas. But some military members are eligible for Servicemembers’ Group Life Insurance. You can purchase up to $500,000 of life insurance at lower-than-average rates.

Why Financial Advising Is Important for Military Personnel

If you are currently in the military or are a veteran, you may face some unique financial challenges. A financial advisor can play a pivotal role in handling the following issues:

• Deployments can increase household expenses. When a service member is deployed, their spouse and dependents may have additional expenses, such as increased childcare or eldercare expenses. A financial advisor can help you budget to ensure your family’s needs are met while you are deployed.
• Relocations can increase your moving costs. Military members often have to move for their jobs. While the military will partially reimburse the service member for expenses incurred during a relocation, most families have to pay thousands out of pocket to cover their moving costs. Meeting with a financial advisor will allow you to create a plan for managing those expenses.
• It can be difficult for a nonmilitary spouse to have a steady job. Because of how often deployments and relocations can occur, many military spouses find that securing steady full-time employment is difficult. An advisor will work with you to create a contingency plan in case the nonmilitary spouse is unable to work and prepare for potential income losses.
• Injuries or service-related disabilities can make it hard to plan for the future. Injuries and service-related disabilities are unfortunately common. In fact, approximately one-third of military service members and veterans have a service-related disability. Injuries or disabilities may make it difficult to work, so you may have to retire earlier than you expected. With a financial advisor, you can build a retirement plan and invest with the worst-case scenarios in mind, and the advisor will also help you apply for all of the benefits you are entitled to receive.
• Military benefits can be complex. Eligibility requirements and application processes vary by program, and figuring out what programs you are eligible for and how to maximize those benefits can be difficult.
• You need to protect your family against loss of income. If you are in the military, you may serve in dangerous areas. In case you are injured or killed in the line of duty, you need to ensure your family is provided for. A financial advisor will review your finances and help you choose the right life insurance package for your needs.
• Taxes are often different for military service members. If you are currently in the military, you are taxed differently than civilians. For example, if you serve in a recognized combat zone, your income may be excluded from federal income taxes. A financial advisor who knows how military members are taxed can maximize your deductions and credits and reduce your tax bill.

How Much Will a Financial Advisor Cost You?

Financial advisor fees vary by location, advisor and the services provided. In general, you should expect to pay the following:

• Assets under management (AUM) fees: Advisors that handle your investments will typically charge a fee based on your AUM. The fee is typically 0.50% to 2.00% of the AUM.
• Hourly fees: If you meet with an advisor to create a budget, discuss your child’s education fund or to decide what life insurance coverage you need, you may pay an hourly fee. In general, financial advisor fees can range from $150 to $400 per hour.
• Fixed fees: If you have a specific need, such as the creation of a retirement plan or estate plan, your financial advisor may charge you a fixed fee. Generally, fixed fees range from $1,000 to $3,000 for a financial plan.

Things to Consider When Finding a Financial Advisor for Military Personnel

As a service member or veteran, you have unique needs and access to different benefits than civilians. Finding a financial advisor that specializes in the military is critical so that you can take advantage of all of the benefits you are eligible for and plan for the future. When looking for an advisor, ask the following questions:

• Are you a fiduciary? Fiduciary advisors are required to work in your best interest, so they can’t recommend investments or products based on commissions or referral fees.
• What background do you have with the military? The military has many acronyms and complex programs; having a knowledge of what those acronyms mean and what programs are available is essential. Look for an advisor who is a veteran or has a thorough knowledge of those programs.
• What are your fees? As previously mentioned, financial advisors can have different fee structures. Make sure you understand what fees are involved and how often you’ll be charged.

How To Find the Best Financial Advisor for Military Personnel

To find the best financial advisor for military personnel, check out these resources:

• Military Financial Advisors Association (MFAA): MFAA is a network of fee-only fiduciary advisors that specialize in serving military members and veterans.
• Service-related financial institutions: Financial institutions that limit their memberships to military members or veterans, such as Navy Federal Credit Union or USAA, usually offer financial advisory services. You can meet with an experienced financial advisor over the phone or in person.
• Let’s Make a Plan: This site is the official site of the Certified Financial Planner Board of Standards. It has a searchable database you can use to find a certified financial planner specializing in the military in your area.

Frequently Asked Questions (FAQs)