Create a Good Habit this Military Saves Week: Pledge to Take Financial Action
By Alecia D. Blair, Military Saves Communications Project Manager, AFC® Candidate, FINRA Foundation Fellow
Military Saves Week (February 27-March 4, 2017) is an opportunity to hit the pause button on the high-speed tempo of your military life and assess your financial fitness. So, how are you doing? Much like improving your PT score, could you improve your financial health? This Military Saves Week, create healthy savings habits by taking action. Here’s how and why it’s so important.
Take the Pledge to Save. It works, really.
Jumpstart your financial fitness by creating healthy savings habits:
- Save automatically (through direct deposit, automatic transfer from checking to savings or allotment)
- Spend less than you earn and save the difference
- Take the Military Saves Pledge to set short-term and long-term savings goals
- Set up a separate savings account for emergencies
- Pay down (and manage) debt
- Save for retirement, automatically, and take informed action in the Blended Retirement System (BRS)
And if you think taking a pledge won’t help you start your savings goals, think again!
A survey from earlier this year of 1,313 individuals who took the America Saves Pledge reveals that it helped many start or continue to save. Nearly two-fifths said that taking the Pledge was the main factor for starting to save more. Nearly one-fifth of respondents indicated that, while they had already started to save, taking the Pledge improved their success at saving. For more than one-quarter, taking the Pledge helped them maintain the success they were already having.
So, take the pledge today and commit to saving.
Educate Yourself on the BRS
Between January 1-December 31, 2018, the BRS goes into effect and servicemembers with fewer than 12 years of service (as of December 31, 2017) will be required to make an irrevocable decision—whether to opt-in or out of the BRS.
According to the Department of Defense (DoD), “the new BRS combines the legacy 20-year military retirement system (the defined annuity), with a defined contribution plan, known as the Thrift Savings Plan or TSP, as it’s more commonly referred to.”
“The defined contribution component or TSP, includes automatic 1 percent DoD contributions after 60-days and up to 4 percent additional matching contributions after two-years of service to the member’s TSP account.” That can mean a lot of retirement savings for you if you do your part—make an informed decision and commit to automatic retirement savings.
Currently, 81 percent of active servicemembers leave the military with no retirement benefits. The new BRS will “ensure that nearly 85 percent of military servicemembers leave the service with retirement benefits.”
So, take the pledge and educate yourself in 2017. Then, take informed, decisive action in 2018 to meet your retirement savings goals.
Know Where to Turn For Trusted Resources
If you’re looking for a coach in your corner to give you the gentle nudge towards setting savings goals and following through on them, Military Saves has you covered with our new Blended Retirement webpage.
Take the Military Saves Pledge to set your savings goal and follow the prompts to opt-in to receive text message reminders and tips. Think of us as your personal financial support system!
To learn more about the BRS, visit the one-stop DoD shop at http://militarypay.defense.gov/BlendedRetirement/. Here, you will find a BRS Opt-In Course (both CAC and non-CAC required), infographics, timelines, informational videos and, in late February, the BRS calculators to help you run the numbers.
Additional information on the BRS may be found here:
- Defense Credit Union Council
Blended Retirement System Guide
- Military OneSource
- FINRA Educational Foundation
- Thrift Savings Plan
Save With Confidence. You’ve got this!
Taking decisive action will give you a leg up in preparation for the BRS by getting you in the automatic savings habit now. If you’re already saving for retirement, maybe you can save 1 percent more or set your sights on another goal, such as beefing up that emergency fund or saving for a large purchase, such as a home or car. You can do this, and, remember, Military Saves is here to help. Now, ready, set, save!
Set a goal. Make a plan. Save automatically.
- Written by Alecia Blair
- Category: Blog
- Published: 22 February 2017