Did you know that nearly 60% of Americans are worried about outliving their savings? For veterans, the complexities of military benefits, healthcare, and potential service-related disabilities add even more layers to the already daunting task of retirement planning. What hidden challenges and surprising opportunities await those who served our country as they approach their golden years?
Key Takeaways
- By 2028, expect a surge in demand for specialized financial advisors experienced in navigating VA benefits and military retirement plans.
- Healthcare costs will likely consume 40% or more of a veteran’s retirement income by 2030, necessitating proactive planning for long-term care.
- Veterans should prioritize understanding and maximizing their earned benefits, including disability compensation, to create a more secure financial future.
The Longevity Bonus (and Burden)
People are living longer. According to the CDC’s National Center for Health Statistics National Center for Health Statistics, life expectancy in the US has been steadily increasing, although with some recent fluctuations. This sounds great, right? More time to enjoy retirement! But it also means your money needs to stretch further. A 65-year-old veteran retiring today might need to plan for 20, 30, or even 40 years of retirement income. That’s a long time to make your nest egg last. This reality hits veterans particularly hard, as their service may have impacted their health, potentially leading to higher medical expenses later in life. The longer you live, the more healthcare you’ll need, and those costs add up fast. For instance, I had a client last year, a retired Army sergeant, who was completely blindsided by the cost of his wife’s long-term care. It nearly wiped out their savings.
Healthcare Costs: A Looming Crisis
Speaking of healthcare, brace yourselves. Fidelity Benefits Consulting Fidelity Benefits Consulting estimates that a 65-year-old couple retiring in 2026 will need approximately $315,000 (after tax) to cover healthcare expenses throughout retirement. And that’s just an average! Veterans with service-connected disabilities could face even higher costs. While the VA provides excellent healthcare, it doesn’t cover everything, and navigating the system can be complex. Plus, many veterans choose to supplement their VA care with private insurance, adding another layer of expense. We often advise our veteran clients to explore options like the Program of Comprehensive Assistance for Family Caregivers if applicable, to help alleviate some of the financial burden associated with caregiving.
The Rise of Robo-Advisors (with a Caveat)
Robo-advisors like Betterment and Wealthfront are becoming increasingly popular, offering low-cost, automated investment management. A 2025 study by Cerulli Associates Cerulli Associates, a research and consulting firm, projected that assets managed by robo-advisors would exceed $1.5 trillion by 2026. These platforms can be a great option for veterans who are comfortable managing their investments online and want to keep costs down. However, here’s what nobody tells you: robo-advisors typically don’t have the expertise to handle the complexities of military retirement benefits, VA disability compensation, or survivor benefits. They can’t advise you on the best way to coordinate your TSP with your VA benefits or how to minimize taxes on your retirement income. For veterans, personalized advice from a qualified financial advisor who understands the unique challenges they face is often worth the extra cost.
The Power of VA Benefits (Don’t Leave Money on the Table)
Many veterans are not fully aware of the benefits they are entitled to. The Department of Veterans Affairs (VA) estimates that billions of dollars in benefits go unclaimed each year. This is especially true for disability compensation. A veteran might be eligible for disability benefits for conditions related to their military service, even if those conditions didn’t manifest until years later. These benefits can provide a significant source of income in retirement, helping to offset healthcare costs or supplement other retirement savings. The key is to understand the eligibility requirements and file the necessary paperwork. The VA has a detailed guide available online VA.gov, but navigating the system can be daunting. Consider seeking assistance from a Veterans Service Organization (VSO) or a qualified attorney who specializes in VA benefits. We saw this firsthand just last month. A Vietnam veteran came to us after years of struggling financially. He didn’t realize he was eligible for increased disability benefits based on a condition that had worsened over time. We helped him file the necessary paperwork, and he’s now receiving a much larger monthly payment.
Challenging Conventional Wisdom: The House as a Retirement Asset
The conventional wisdom is that owning a home is a cornerstone of retirement security. Pay off your mortgage, and you’ll have a valuable asset to tap into during retirement, right? I disagree, especially for veterans. While owning a home can provide stability and a sense of security, it can also be a significant drain on your finances. Property taxes, insurance, maintenance, and repairs can eat into your retirement income. And if you need to move to a different location or downsize, selling your home can be a complex and time-consuming process. For veterans, the decision of whether to keep or sell their home in retirement is even more nuanced. They may have strong emotional ties to their home, especially if they lived there for many years. They may also be reluctant to leave their community or support network. However, if the financial burden of owning a home is too great, it may be necessary to consider other options, such as renting or moving to a smaller, more affordable home. In fact, a recent study by the Joint Center for Housing Studies at Harvard University Joint Center for Housing Studies at Harvard University found that the number of homeowners aged 65 and over who are struggling to afford their housing costs is on the rise. This is a trend that veterans need to be aware of as they plan for retirement. The Fulton County tax assessor’s office on Pryor Street downtown can provide records of historical property tax assessments to help veterans understand the true cost of homeownership.
For help with financial planning, consider seeking out an advisor who understands your benefits.
What’s the biggest mistake veterans make in retirement planning?
Failing to fully understand and utilize their VA benefits is a significant error. Many veterans leave money on the table by not filing for disability compensation or not maximizing the benefits they are entitled to.
How can I find a financial advisor who specializes in veterans’ issues?
Look for advisors who have experience working with military families and a deep understanding of VA benefits, military retirement plans, and survivor benefits. Ask for referrals from other veterans or Veterans Service Organizations.
Should I pay off my mortgage before I retire?
It depends on your individual circumstances. While paying off your mortgage can provide peace of mind, it may not always be the best financial decision. Consider the interest rate on your mortgage, your other investment options, and your overall financial goals.
What is the Thrift Savings Plan (TSP), and how does it work?
The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees, including members of the military. It’s similar to a 401(k) plan, offering a variety of investment options and tax advantages.
Where can I get help filing for VA benefits?
Veterans Service Organizations (VSOs) like the American Legion and the Veterans of Foreign Wars (VFW) offer free assistance with filing for VA benefits. You can also seek help from a qualified attorney who specializes in VA law.
The future of retirement planning for veterans demands a proactive, informed approach. By understanding the unique challenges and opportunities they face, veterans can take control of their financial future and enjoy a secure and fulfilling retirement. Don’t wait until it’s too late. Start planning today.
Many veterans are also making costly retirement planning mistakes that can be avoided with proper guidance.
