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Military Saves E-Newsletter
Welcome
to the Military
Saver e-newsletter. This message is a supplement to the
monthly e-Wealth
Coach letters and the quarterly American Saver
newsletter, and is intended to keep Military Savers informed about
campaign news, suggest ways you can spread the message to build wealth
through savings and debt reduction, and to share inspiring stories
about individual Savers and military organizations that help themselves
and their members by promoting savings.
To
share your story, email info@militarysaves.org.
Please include your name, rank and/or title and organization name, duty
location, and the name and contact information for your public affairs
officer (if available). We'd like to include your photo and/or video of
your savings message.
Thank
you for your commitment to the movement to become a nation of Savers!
Ask Wendy
By
Wendy Christiansen
What
services are available to military members and their families when
going through a divorce?
MilitaryOneSource
is a great place to start - you can go to their website at www.militaryonesource.com or call them
at 1-800-342-9647. They have financial counselors that can help
you take the correct steps in preparation for dividing your assets.
They can also show you how to budget for a possible
change in income. They do have a few consultants that
specialize in divorce and that may be able to answer questions you might
have. Keep their number handy, as they have information on a wide
variety of topics ranging from child care, to personal health, to
career.
You
may also want to speak with the legal department on base to get a
general overview of the divorce process. They may
be able to give you insight on current law, but may not
be practicing attorneys in the state you are in. In any
case, they can only provide legal assistance and may be able to refer
you to an appropriate agency. Each active duty service and the
Guard and Reserve will all have different abilities to help.
Correction
to September 2008 Newsletter Ask Wendy column: Your tax savings
will be even greater if you pay state taxes. In addition, that $2,500
will be earning tax-free interest! It is not tax-free interest,
it is tax deferred.
Savers Tip:
By
Kathleen Wells
Senior Program
Analyst, N135
My
husband and I belong to a defense credit union. We are both
federal employees with the Navy. Long ago we established
Christmas Club and Vacation Club accounts. Each time the payroll
is deposited into the checking account, a set amount is automatically
transferred from the checking account to the Christmas Club and
Vacation Club accounts. This way, we never have to worry about
taking money from savings or using credit cards to pay for presents at
Christmas or for a family vacation.
If
you have never utilized Christmas Club and Vacation Club accounts,
start by transferring a small amount and as you get raises, increase
your deposits. This is a good method of budgeting and we have
found success in the process.
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 Savings Bonds Help to Make a
Lifetime Saver
By
Chris Strong
Arkansas Federal
Credit Union
Branch Manager,
Little Rock AFB
My
name is Chris Strong. I joined the Air Force on 25 March,
1985. On that day, my financial life changed forever.
I
was introduced to saving bonds in Basic Training. Savings bonds
were the big thing back then just like the Thrift Savings Plan is
today. A Colonel gave us a briefing. I cannot remember his
name but I can remember the 100 savings bonds he had posted to a piece
of card board. He gave us a speech on the importance of saving
money and how it can change your life. He inspired me to
save.
When
I got to my first duty station, McGuire Air Force Base, New Jersey in
July, 1985, I setup an allotment for $25 dollars to purchase a $50
bond. From there I just continued to save month after month. I
received the bond in the mail and I put it in an envelope. Every
time I got a pay raise I increased my bond allotment. I went from
investing $25 to $250 dollars a month. I saved bonds year after
year and never thought about seeing how much I had invested in
them.
People
laughed at me when I told them I was saving savings bonds. They would
say, "It's the worst investment, they earn very little
interest." Little did they know eventually I would have the
last laugh? When I reached my 18 year mark in the Air Force
with retirement in sight, I decided to pull all the bonds from my safe
deposit box and start adding them up. I was very surprised when
the total was over $80,000 dollars. People weren't laughing
anymore. All they would say was, "How did you do
it?" I gave them my speech about the Colonel from Basic
Training who inspired me.
It
wasn't just the Colonel who inspired me. I also had another
supervisor, Chief Master Sergeant Victor Cox, a man who cared a
lot about his "Troops." He came up to me one day
in the Spring of 1992 and said, "Troop, I need to talk to
you." I went into his office and came out 4-hours later a
changed Technical Sergeant. He explained to me in detail with
charts and graphs the mutual fund market. I later invested in some
mutual funds that did extremely well. From there, I bought a home and
some other property. Saving became fun.
In
August of 2005, I retired from the Air Force as a Master Sergeant after
20 ½ years. The key was I wasn't just a Master Sergeant. I was a
debt free Master Sergeant. I owned everything, my home, my cars,
and my property. And, yes, today I still save savings
bonds. Like the Colonel and the Chief, I hope I was a big
influence on the Airman and NCOs who worked under me. I sat down
many of them and explained the importance of saving for the
future. You just may never know the impact that you had on their
lives.
Today
I have the privilege of working for Arkansas Federal Credit
Union. I am a Branch Manager on Little Rock Air Force Base. My job
everyday is to help improve someone's financial life. That's what
it's all about, sitting people down and educating them, and letting
them make good sound financial decisions. Saving is not easy. It
takes hard work and discipline. It's worth it.
In
February 2008, I was introduced to the Military Saves Campaign. I
thought this is pretty neat. A few months went by and recently I went
to a strategic planning meeting and our CEO, Larry Biernacki mentioned
doing more next year with Military Saves. I came back from the meeting
and started doing some homework. I realized that technically the
campaign is all year long so we can really do a lot with Military Saves
and the America Saves Campaign. We can play a huge part and change a
whole bunch of lives. My goal now is learn as much as I can and get
more people involved. I want people to be excited about saving and that
is what I believe America Saves and Military Saves is all about.
People helping people "Build Wealth, Not Debt."
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 Dave Ramsey's Military Edition
Supports Military Saves and Offers Free Tools
Get
started by making a Quickie Budget.
You
need a budget every month, and this form will help get you started.
It's a fast way to figure out exactly how much money you need to live
each month. You will be amazed by how much further your money will go
when you spend it on paper first.
Download the Quickie Budget form.
Eliminate
debt using the Debt Snowball.
This
tool will give you a plan eliminate your debt. The strategy is to knock
out each debt, starting with the smallest one and moving toward the
largest. As you see the progress, you will continually gain momentum
until you can finally scream, "I'm debt free!"
Download the Debt Snowball form.
Start
Building Wealth With a TSP!
If
you haven't already, it's time to enroll in a Thrift Savings Plan (TSP), the government's
retirement program available to you as a servicemember. Ben and Arthur's story shows us just how much it
pays to start early! Retirement planning can be exciting when you see
how possible it is to retire wealthy.
Learn more about thrift savings plans or sign up for one now
Visit
www.daveramsey.com/fpu/military_saves/ for
more information.
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Military Saves Quarterly Themes
January - March: Save and Invest
April - June: Military Youth
July - September: Debt Reduction
October - December: Retirement
National Save for Retirement Week is 19 -
25 October 2008
Power Years to Retirement
With
mortgages, health care, tuition, and other day-to-day expenses eating
away at your paycheck, it's easy to put off saving for the future.
Since retirement won't always be a few years away, it's imperative to
begin saving now.
Here's why:
- The Employee Benefits Research
Institute reports that more than half of all workers aged 25 and
older have less than $25,000 saved for retirement. Even more
startling is the fact that 41 percent of workers aged 45 to 54
also report less than $25,000 in total savings.
- A healthy couple, both age 65,
stand a 50 percent chance that one of them will live to age 92.
With longer
life expectancies and rising costs, it's easy to see why having
personal retirement savings is important. There are ways to balance
life's checkbook and build retirement security. The good news
is: it's never too late to start.
Pay yourself
first. Take
advantage of your employer-sponsored retirement plans. One advantage of
saving through your employer-sponsored retirement plan, is that the
money goes to savings before you have a chance to spend it. An added
benefit is that you are saving pretax, which means you get the full
benefit of the money you save and reduce your taxable income at the
same time.
Play catch up
- literally. Catch-up provisions in the Economic Growth and
Tax Reconciliation Act of 2001 make it possible for workers who are age
50 and older to "catch up" on their savings by allowing them
to put away additional funds in their employer-sponsored plans or an individual
retirement account (IRA). The "Age 50" catch-up provision
allows workers to make an additional contribution of $5,000 to the
standard $15,000 amount allowed in employer sponsored plans, for a
total maximum contribution of $20,000. Employees age 50 and older can
also invest a catch-up amount of $1,000 to the $4,000 already allowed
for an IRA, for a maximum contribution of $5,000.
Consider
working longer. If you're a typical 50-year-old with
a household income of $62,500 and savings of $60,000, you would have to
put away $12,500 every year in today's dollars to retire comfortably at
age 62. That would drop to between $3,750 and $7,500 if you work
fulltime until 64 and then part-time until 75.
Save a little
every day. Stashing the equivalent of an extra $60 a month
in your retirement plan will boost your savings by more than $150,000
over 40 years if your investments earn 7 percent a year. Whatever
you do, don't delay planning and saving for your retirement - talk to
your benefits specialist and visit www.retirementweek.org
for
more information.
*Statistics compiled from the
2004-2006 Retirement Confidence Surveys, Employee Benefit Research
Institute
**Annual normal contribution limits is the
lesser of 100 percent of compensation or $15,000. The limit for a
457(b) plan participant within three years of normal retirement age may
be up to twice the "normal" limit (i.e. $30,000 for
2006).
***2005 Merrill Lynch New
Retirement Survey
Military
Saves was made possible in part through the generous support of the
FINRA Investor Education Foundation. Please visit www.SaveAndInvest.org.
Military
Saves is also supported by Wells Fargo Bank, Chase Bank, and
Dave Ramsey's Financial Peace University Military Edition. Together, we
can build wealth, not debt!
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