Best Places in the Country for Military Retirees
When you’re evaluating the best places for military retirees to live several criteria come to mind including weather, taxes, employment opportunities, crime, education, entertainment. Other, less tangible items like proximity to family and friends, are often more important to the individual retiree.
That said, Wallet Hub recently published their “Best Places” list for 2014. The methodology for the rankings was categorized as Economic Environment, Quality of Life, and Health Care. Different weights were placed on the scores to help emphasize issues that may be of interest to military retirees specifically, such as the number of bases in the state and the number of VA facilities.
I won’t steal Wallet Hubs thunder by repeating their top ten list, but will point out that it’s probably better to break this information down further and consider regional alternatives. In Nevada, Las Vegas is lumped in the mix with Elko and Carson City, but has a new, state-of-the-art VA Hospital and a recovering economy. It also is the home of Nellis AFB, offering military retirees all the amenities that come along with a world class facility.
Nevada is a Paradise for Military Retirees
No state income tax, great weather, seasonal changes (if you’re willing to travel just a bit), and so many activities…just a few reasons why Nevada is a paradise for military retirees. While the summer will be tough in Las Vegas for many, there is always respite in the Reno/Lake Tahoe area, and even Las Vegans can escape the heat on Mount Charleston.
What are your favorite retirement locations?
Consider “International Living”
I’ve been a subscriber to the “International Living Postcards” e-mail blast for quite a while. Nearly everyday I get an e-mail that highlights what life is like in another international destination. The company is also hosting their International Living Conference in Las Vegas in late September. It’s an exciting option for military members since your retirement can go a long way in many of these nations.
Preparing for a Delay in Military Pay
You’ve read that the government is quickly reaching its self imposed debt ceiling. This has, in the past, at least threatened a delay in military pay until congress acts. During my 25 year career we’ve seen the threats at least three times, but only once was there a delay in payment.
Here are a few strategies that you can use to prepare for a delay in your military pay.
- Tap into your emergency fund (EF). It’s a wise idea to have 3-6 months of expenses put aside in an accessible account for emergencies. By using the 8% challenge you can sock that away in a single assignment. When the military pay spigot gets turned back on you can refill your EF and then get ready for the next crisis.
- Open an account with a credit union. During the last threatened delay in payments the Navy Federal Credit Union announced that it would credit its members accounts for their usual military pay deposit without cost to the members. USAA later followed suit, but it was weeks after the NFCU announcement. That’s real customer service!
- Consider a loan through a Soldier, Sailor, Airman, or Marine resource, like the Falcon Loan. The Air Force Aid Society offers Airman a no-interest loan of up to $750 to pay for emergencies and basic living expenses. This is considerably better than a pay-day lender or a high interest cash advance on a credit card.
- Borrow from your TSP account. If you’ve contributed to the Thrift Savings Plan, you can borrow 50% of your account balance up to $50,000 for five years at very low interest rates. If you are discharged with a loan balance outstanding, however, you’ll have to pay the entire balance back within 60 days to avoid extra taxes and penalties.
- Talk to your creditors. In a military town, merchants understand that they get paid when you get paid. Once you’ve exhausted your other options the best plan is to often call your creditors and work out a plan to pay them once you get paid yourself. If you have loans with military friendly banks, they’ll usually work with you. If not, then you can at least understand what the consequences are from their point of view.
Don’t panic during the congressional debate regarding the debt ceiling. Use the discussion, however, to consider what you’d do if you didn’t get a paycheck for a month or two. This may motivate you to extend your emergency fund a few extra months and minimize your new debt acquisition. If you have more suggestions, e-mail us at suggestions@yourmilitarymoney.com or comment.
Should you pay for TSP advice?
The Thrift Savings Plan, or TSP, became available to military members more than a decade ago. It offers us the ability to save money before taxes come out, allowing the money to grow over time and then be taxed as ordinary income when we tap into it.
Most military members are not professional money managers, and you might be confused about the different investment options in the TSP. While there are just a few different options in the TSP it might still be a little overwhelming.
The TSP website offers a lot of general information that can help you make a decision over your investment mix. Too often, unfortunately, military members opt for either the safest possible fund, the “G-Fund” which is the default setting for contributions, or the fund that happens to have the highest rate of return when they sign up for the benefit.
As with picking mutual funds, sometimes the best choice is to get some help to pick the right funds for you. There are a couple of ways to get help. The first way is to go to your service’s support agency. The AIr Force Airmen and Family Readiness Center has personal financial management counselors who can explain the options and answer questions about the differences.
Another great option is Militaryonesource.com. You can use this service to get one-on-one counseling for all your financial concerns, including your TSP contribution choices.
A less attractive but very popular choice is asking your friends, family, or your supervisor how to invest your money. Like many gamblers, many of these individuals only recall their investment wins, avoiding or “forgetting” their investment mistakes.
A great choice is to hire a fee-only investment counselor to sit down with you and your spouse to discuss your entire financial situation. It’s really only in this holistic context that your TSP choices can be properly set. If you can afford a few dollars now, it has the potential of making a big difference in your eventual financial health.
Random “Great Places to Live” Postings
We continue to search for bargains around the world to recommend as great military retirement locations. So when Marketwatch posts an article entitled “5 cities where houses are still cheap” we immediately hit the link. This time we’re again disappointed. #1 on AnnaMaria Androitis’ list is SANTA BARBARA, CA. Inventory is Santa Barbara is non-existent (check out Realtor.com if you want to see for yourself.)
Phoenix is on the list, but prices in that sunny city are spiking.
We remain bullish on Las Vegas where significant inventory remains on the market, where visitor counts for the hospitality industry are climbing, and a lack of state income tax really stretches your retirement dollars.
MarketWatch lists top 10 global retirement options
We all love lists of retirement locations. Check this one out from Marketwatch if you are interested in international options.
Where You can Live Well in Retirement for Less Than 40,000
Living Large for Less
There have been a number of articles written recently about how to live in America on less money. Whether it is a function of the unemployment rate, the populist counter-Corporate movement, or a back-to-basics philosophy of consumption vs. value, these articles seem be be getting a lot of attention.
There’s the story of the school teacher who makes less than $40,000 a year who still has money to save for the future. Or the college graduate who plans of living in 10 cities in 10 years…just to experience them, on about $20,000 a year. US News ran a story last year about living abroad in order to live life on Social Security payments alone.
Of course all of this is relevant to a military retiree who either is planning for transition to civilian life or hopes to retire completely when their military service is complete. I recently corresponded with a military retiree who moved to Mexico to live after they left the service. This gentlemen encourages anyone interested in doing so to learn the language and adapt to the culture.
He wrote:
“Living on my pension here in Mexico wasn’t difficult since rent and food is inexpensive away from the international communities; however, one needs to speak the language and respect the culture. Of course, now that I’m also getting social security, it’s much easier.
If another retired AF member were to do what I did now, he or she could find an apartment or a small house for around $150 in a small community. Groceries would run around another $150. Miscellaneous costs would probably be around another $100. Since there is adequate public transportation, there’s no need to buy a car–so add in another $50 a month. As for medical, one uses TRICARE Standard; however, a lot of people buy the Mexican socialized medical package which costs less than $200 a year if you’re under 50, and after two years, you’re fully covered. Our little clinic here in Santa Cruz Tlaxcala, Tlaxcala is quite nice and the staff is adequate for normal medical maintenance. Looking at what I’ve given here, it looks like a person could live quite comfortably for less than a $1,000 per month. But you would have to be ready to accustom yourself to a retired life.
I’ve been here going on 18 years now, and I’ve found the Mexican people to be quite congenial and welcoming, especially after they find out you speak their language. Of course, one needs to be outgoing, respectful, and kind and always remember that you are an outsider even if you feel totally integrated. If one finds it difficult to meet people, then integrating him or herself in Mexican culture probably wouldn’t be his or her cup of tea. Interestingly enough, I’ve read that there are approximately one and a half million Americans living in this country. And I’ve found them everywhere.”
For those who choose to remain in the United States, millions of American’s live for less than $40,000 a year, and they don’t live in crime infested ghettos. US News ran an online article recently of ten additional choices. They included:
Auburn, AL
Blacksburg, VA
Boone, NC
Cheney, WA
Mount Pleasant, MI
Murray, KY
State College, PA
Sunland Park, NM
Syracuse, NY
West Lafayette, IN
In each case, affordable housing is the key to stretching each retirement dollar. So, where you decide to be is the key to living well for less money. This issue is so important that we launched a new page to focus on the best locations for military members to consider for their retirement. Click this link to learn more.
2011 “Best Places To Live”
Money Magazine has just released their annual list of the Top 100 Places to Live. I’m always attracted to the list because as I get closer to my military retirement I’m often asked where I’ll live. For many this question is a foregone conclusion. They’ll return to their home of record, closer to family, their follow-on job, or to a home they’ve purchased years ago.
For others, there is uncertainty. They aren’t tied to any particular area and are flexible to choose a home based on their tastes and experiences.
So, what criteria can you use to select the best places to retire?
Let’s consider Money Magazine’s list. The magazine considers criteria like average income, cost of a family home, weather, access to health care, education, entertainment and recreation.
For military retirees, access to military bases and facilities must be considered. Access to healthcare, commissaries, exchanges, fitness centers, and other benefits unique to military retirees is a huge factor in selecting a home.
Papillion, NE makes another appearance in the list, once again in the #5 position. It’s an attractive alternative for military retirees because of the close proximity of Offutt Air Force Base.
The Money Magazine list provides military members considering retirement a good resource to explore as they narrow down their choices. It’s interesting to note, I think, that the list is different every year. The bottom line is that America is full of great places to live. For military members, the added factor of living in reasonable proximity to major military bases helps narrow down the choices.
I am from Vermont, for example. Vermont doesn’t have a military facility, but nearby states like New York and Massachusetts do. By mapping out bases and then determining the distance you’d be willing to travel to get there on a regular basis, you can begin to create short lists of places to investigate.
For me, I am willing to drive 40 minutes to reach a base. While Vermont is out of reach, I could live in New Hampshire near the Portsmouth Naval Yard, and still be close to family while taking advantage of New Hampshire’s reasonable taxes.
Everyone has their own criteria, but a military retiree must consider access to services as an important resource. A good reference is About.com’s list of U.S. Military Bases and Installations.
Metro DC as a First Stop
Many military retirees are selecting the Washington DC area as their first retirement stop after completing their service. The job market is among the very best in the nation, there are abundant military bases for retiree services and health care, and there is an abundance of activities to choose from.
All of this makes Washington a popular spot for many people, and that has kept housing prices high. So where can a military retiree stake a claim in this high priced city? Should you buy or rent?
In my mind renting makes a lot of sense if you are relocating to DC for the first time. If on the other hand you’re familiar with DC you know that prices have come down in many areas, and there are bargains to be found in the region.
Military Retirement Locations 