The latest re-enlistment bonus list released by the DoD stated incentives to stay in the military are running as high as $81,000 for select MOSs – a reason some might change their MOS to reap these larger payouts, or stay in the service longer to get the signing cash.
But what you do with a bonus can determine your financial future far beyond the three to five years you are being asked of to receive the extra compensation. Those still in their 20’s might want to pay close attention considering that a big payment now can compound significantly 20 to 30 years from now. Or, those considering a career after the service may want to ponder how a bonus plays out in that scenario as well. Even if you are near retirement and still need to save, it is never too late.
Martina Klabo, investment advisor at Harborstone Credit Union, said there is a hierarchy in the decision process regarding where to put a bonus to best work. And, if COVID-19 has taught us anything, she is right about the most important consideration – emergency funding.
Klabo said before anything else, we should all have three to five months of regular monthly income stored away for unexpected events in the future. These hiccups could put any of us out of work without an income for weeks or months, so having a nest egg to fall back on while coping through the crisis is a must. Certainly an unexpected event like COVID proves you never know what might happen.
After that, Klabo says she likes working with people on their goals and dreams to figure out how a lump sum bonus can support those plans.
“There are so many things to consider,” Klabo said. But those dreams are easier met with a financial plan that supports them. Rather than wing it or hope you’ll have the funding when opportunities arrive, you can actually compile a solid plan to support the future.
Klabo said that after an emergency nest egg is secure and high interest debts are paid off, the next consideration is finding investments that will outpace inflation – typically buying stocks and bonds, and investing in military programs such as the Thrift Savings Program.
This is where investment advisors are helpful, especially at a credit union where the focus is on supporting members and not trying to sell them things they don’t need.
“I want to help servicemembers and their families make the choices that help them – to put together a plan that gets them where they want to go, whether that is to purchase a home, open a business after the military, or to secure the type of retirement they want in the future,” Klabo added.
And, as a member at Harborstone, these consultations are free. Appointments can be arranged at hcuplanningcenter.com.
As for the current bonuses offered, according to an August 7 update, the $81,000 bonus referenced above is for an E-6 to E-7 for 60 months in cyber. Outside of cyber, 25 Whiskeys are wanted in the Ranger Regiment for $59,000 to $72,000.
Martina Klabo, Financial Advisor. 866-237-3764, 6019 Lake Grove Street SW, Lakewood, WA 98499.
Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Cetera is not affiliated with the financial institution where investment services are offered. Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services. Securities offered are not being offered by or provided on behalf of the federal government and are not sanctioned, recommended, or encouraged by the federal government.
Investments: • Are not FDIC/NCUSIF insured • May lose value • Are not financial institution guaranteed • Are not a deposit • Are not insured by any federal government agency.
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