Many people who serve our country on Active Duty are very aware of their benefits that they will eventually receive through their service. But Reserve and National Guard duty is also a way to build retirement points and Benefits. The pay that you receive as a National Guard or Reservist with U.S. Forces is regularly adjusted for Cost of Living and other adjustments designed to ward off inflation. This makes potential Reserve or Guard retired pay one of your largest assets.
You cannot over prepare for retirement. You never know what the unexpected will bring. Often Service Members will be very prepared for daily life, with a budget, and regular savings. But then a crisis happens that was unexpected and one must always try to be prepared. Some things that can get one off track financially include: Unexpected Disability (whether Service related or not) Civilian Job Loss after retirement from service, Storm, Weather, or other unexpected home damage, Family crisis or a relative who is in need of help, and legal or medical expenses. Despite having insurance, there are often costs with these issues, hidden costs that even the best insurance cant pay.
With insurance many of these unforeseen financial pitfalls can be avoided. But you still may have to borrow money, from sources such as a personal loan, credit sources, or even your home equity. Or, you may have to dip into your retirement, which can open a whole new can of worms in interest penalties and other fees.
Having an emergency fund is necessary to help prevent having to deplete your retirement funds that you have worked so hard to get prepared. Many experts consider the baseline for an emergency fun to be three to six months of normal living expenses. That sounds like a great deal of money, and it can be. But having an emergency nest egg can save you from having to rob your retirement accounts.
So you want to prepare for a financial emergency? Where do you keep your emergency fund? Well, it should be accessible, but your money should be working FOR you at the same time.
It should be structured for fast access, not long-term investment. Two types of accounts lend themselves to this, bank savings accounts, and Money Market accounts.
Either way, make sure you prepare for an emergency. Otherwise, your retirement savings may well suddenly disappear. Its always easier to spend it than save it, and you will be surprised in a time of crisis how those fund you have saved long and hard suddenly vanish.
