People join the U.S. military for a variety of reasons, including patriotism and defending American values. In addition to these honorable motivations, joining the military does provide you with many material benefits that can improve your personal finances and economic opportunities. The following are some of the main personal financial benefits of enlisting in the military.

Education benefits

One of the most common reasons people sign up for military service is to obtain the various educational benefits offered by the government to armed forces members. Some of these education benefits include tuition assistance, help with paying for living expenses as a student, assistance in repaying college loans and even free tutoring help.

Federal military retirement benefits

There are two different retirement plans offered by the Federal government to those serving in the military. The Legacy Retirement System (LRS) applies to those who enlisted on or prior to December 31, 2017. Those who are eligible for the LRS will receive a monthly annuity paid for life starting at the time of retirement. Only those who have served a minimum of 20 years in the military will qualify for the LRS benefit.

The other military retirement plan is the Blended Retirement System (BRS) which applies to military personnel who have enlisted on or after January 1, 2018. Those that enlisted during this time period will be automatically enlisted in BRS which combines the defined-benefit pension plan with a specific defined-contribution plan known as the Thrift Savings Plan (TSP).

Thrift Savings Plan

Similar to 401(k) accounts, the TSP federal retirement plan allows servicemembers to make contributions to the TSP account from their base pay. These contributions can either be before or after taxes, depending on whether you have selected a traditional TSP or a Roth TSP.

The Internal Revenue Service (IRS) limits the annual contribution military personnel are allowed to make. This limit for 2021 was $19,500 and is set to increase to $20,500 in 2022 with an additional $6,500 for those 50 years of age and older.

Of course the TSP can be implemented in addition to a traditional or Roth IRA.

Savings Deposit Program

The Department of Defense offers qualified active-duty military personnel the Savings Deposit Program (SDP) which allows you to earn interest at a generous rate of 10% compounded monthly. The maximum amount you are allowed to deposit into the SDP account is $10,000. All funds are returned to you upon termination of deployment.

To qualify for the SDP you will need to be deployed in an eligible combat zone. Also, you must be deployed for 30 days consecutively or one day in each of three consecutive months.

Military savings account

Banks and credit unions commonly offer savings accounts, CD accounts, money market accounts and various other types of accounts with special provisions and benefits to military personnel. This may include higher interest rates as well as reduced fees.

Designing your savings and investment plan

As a military serviceperson you have many options when creating a plan for saving and investing for the future. However, not every option will be right for your particular situation. This will all depend on what you are trying to achieve through your family financial planning efforts.


Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.