Military families have unique lifestyles — including frequent relocations, deployments and transitions to civilian life — all of which require careful financial planning. Fortunately, various benefits are available to help offset costs and reduce financial stress, covering areas such as health care, housing and education. MoneyGeek has compiled a list of actionable steps to help military families build a strong and effective financial plan.
Financial Planning for Military Families
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Key Takeaways
Exclusive military benefits include access to TRICARE, VA health care, life insurance and housing assistance.
Consider frequent relocations, deployments and transitions to civilian life when planning your finances.
Programs like MyCAA and Spouse Education and Career Opportunities (SECO) provide financial aid and career opportunities for military spouses and dependents.
Free counseling services and protections like the Servicemembers Civil Relief Act (SCRA) help military families manage finances, avoid scams and protect their credit.
Military Health Care Options
When managing health care costs, military families can rely on comprehensive options, primarily through TRICARE, which provides coverage for active-duty service members, retirees and their dependents. They also have the flexibility to explore private insurance options. For example, veterans can enroll in employer-sponsored health insurance or get coverage as a dependent under a spouse's plan.
Below are some health care options available to military families.
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TRICARE
TRICARE is the primary health care program for service members, retirees and dependents. It offers various coverage types, including health insurance plans, prescription drug coverage, dental plans and specialized health programs. Most TRICARE policies meet the Affordable Care Act's minimum coverage requirements. Coverage levels depend on the selected beneficiary category (e.g., active-duty service members, veterans or dependents) and the specific plan.
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Veterans Affairs (VA) Health Care Programs
In addition to TRICARE, eligible veterans can access health care services through the Department of Veterans Affairs (VA). VA health care includes medical treatments, mental health support and long-term care services for veterans and, in some cases, their families. Benefits are determined based on factors like service history, disability status and income.
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Transitional Assistance Management Program
The Transitional Assistance Management Program (TAMP) offers transitional health care coverage for up to 180 days after TRICARE benefits conclude, with no premium costs required.
Life Insurance Through Military Programs
Life insurance for active service members and veterans is available through VA group programs. It offers up to $500,000 in coverage with options for dependents. Enrollment varies for active-duty and retired members, so it's helpful to review and compare life insurance policies to find the best fit.
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Servicemembers' Group Life Insurance (SGLI)
SGLI provides life insurance coverage for all active-duty service members, members of the National Guard and reservists. Coverage is automatic upon enlistment, with a maximum benefit of $500,000 starting March 2023. Service members can adjust their coverage in $50,000 increments or opt-out entirely if needed. Premiums are deducted directly from paychecks, making it a convenient option.
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Family Servicemembers' Group Life Insurance (FSGLI)
FSGLI extends coverage to the spouses and dependent children of service members insured under SGLI. Spouses can be covered for up to $100,000, depending on the service member's coverage, while dependent children are automatically covered for $10,000 at no additional cost. Spousal coverage premiums are determined by the spouse's age and deducted from the service member's pay.
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Veterans' Group Life Insurance (VGLI)
Upon leaving the military, SGLI coverage can be converted to VGLI within one year and 120 days of separation. VGLI provides lifetime renewable coverage, with amounts starting from $10,000 and increasing to the SGLI maximum. Premiums are based on age and coverage amount, but veterans can secure coverage without a medical exam if they apply within 240 days of separation.
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Traumatic Injury Protection (TSGLI)
TSGLI provides financial assistance to service members who suffer severe injuries while on duty. This benefit is included with SGLI coverage and offers a one-time payment of up to $100,000 to help service members and their families manage the financial impact of traumatic injuries, such as amputations, severe burns or loss of sight. TSGLI is designed to cover immediate expenses during recovery.
Tax Credits for Service Members
Military tax credits are a benefit service members receive based on their military service. For example, while serving in a combat zone, the IRS gives service members a deadline extension when filing their taxes. Note that tax credits can change, so service members and veterans should all carefully review their taxes each year to make sure they are receiving all appropriate tax credits and benefits, which may include:
- Military Spouses Residency Relief Act (MSRRA): The MSRRA allows military spouses to maintain their legal residence in the state where they lived before a permanent change of station for tax purposes.
- Filing Joint Returns: Typically, both spouses must sign a joint income tax return. Military spouses who are unable to get both signatures because of specific military duties or conditions may be able to sign for their spouses. Check with your installation's legal office to see if you need a power of attorney.
- Moving Costs: If you are left with unreimbursed moving costs, you can deduct them from your taxes if the move is due to a permanent change of station.
- Uniform Deduction: The costs of certain uniforms are tax deductible, including purchase and upkeep costs. If you are given an allowance for these costs, you must reduce your deduction by that amount.
- Reservists’ Travel Deduction: Reservists traveling over 100 miles from home for military duties can deduct unreimbursed travel expenses without needing to itemize deductions.
- Combat Pay Benefits: Combat pay is a tax-exempt monthly allowance provided to service members serving or stationed in officially designated hazardous zones. This benefit applies to personnel in any branch of the U.S. military assigned to such areas.
TAX SAVINGS TIPS FOR MILITARY FAMILIES
Take advantage of free tax preparation and filing assistance services, such as the Volunteer Income Tax Assistance (VITA) program, often available at military installations. Keep records of all expenses, as many may qualify for deductions or credits that are not immediately obvious during filing. Additionally, consulting a tax professional familiar with military-specific tax benefits can help ensure that all eligible credits and deductions are accurately applied, maximizing tax savings.
Military Housing Assistance Programs
If you're pursuing homeownership or need support with housing costs, military families can benefit from various assistance programs beyond VA loans. These programs are designed to help service members, spouses and dependents secure stable housing, whether actively serving, transitioning out of the military or entering retirement.
To access these benefits, service members should contact their installation's housing office or visit the VA website. Understanding eligibility criteria, maintaining documentation and planning ahead can help maximize the benefits of these programs.
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Basic Allowance for Housing (BAH)
BAH provides active-duty service members housing funds based on location, pay grade and dependency status. This allowance compensates for housing costs in areas where government housing is unavailable. BAH can be used to rent or purchase a home, depending on the service member's needs.
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Overseas Housing Allowance (OHA)
For service members stationed abroad, the OHA covers rental costs, utility expenses and move-in fees in foreign countries. The allowance is designed to offset the unique housing costs associated with overseas assignments.
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Temporary Lodging Allowance (TLA)
The TLA provides short-term financial assistance to service members and their families in transition, such as during a permanent change of station. This benefit helps cover the cost of temporary accommodations while searching for permanent housing.
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Adaptive Housing Assistance for Veterans With Disabilities
In addition to VA home loans, the VA offers resources like housing grants for service members with service-connected disabilities. Programs such as the Specially Adapted Housing (SAH) Grant and the Special Housing Adaptation (SHA) Grant help eligible veterans modify or purchase homes to meet their needs.
Military Savings Plan
Military service members can take advantage of specialized savings programs designed to address their unique financial needs, such as frequent relocations and deployments. Below are military savings plans to help service members and their families build financial security and plan for the future.
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DoD Savings Deposit Program (SDP)
The SDP allows service members deployed to combat zones to deposit up to $10,000 per deployment into a high-interest savings account. This account accrues 10% annual interest, significantly higher than most traditional savings accounts. Funds remain in the account until 120 days after the deployment ends, when the balance, including interest, is returned to the service member.
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Veterans Benefits Banking Program (VBBP)
The Veterans Benefits Banking Program partners with the Association of Military Banks of America (AMBA) to offer banking benefits that meet the unique needs of service members worldwide. AMBA is a nonprofit association of banks and banking facilities designated by the U.S. Treasury to provide banking services to service members and veterans.
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Military Banking Services and Credit Unions
Banks and credit unions like USAA and Navy Federal Credit Union provide specialized financial products for military families. These include high-yield savings accounts, deployment savings programs and lower fees for financial services. Additionally, they often provide financial literacy tools and resources to help service members maximize their savings.
Retirement Benefits for Military Members
Military retirement benefits offer service members a variety of options. Understanding the differences between available plans and exploring additional retirement benefits when transitioning to civilian life can help service members maximize their financial security. Below are some of the military retirement plans:
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Blended Retirement System (BRS)
Introduced in 2018, the BRS combines a traditional pension with contributions to the Thrift Savings Plan (TSP). Under this system, service members receive government matching contributions to their TSP, making it an excellent option for those who may not serve a full 20 years.
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Final Pay Retirement System
This retirement system applies to service members who entered the military before September 8, 1980. Under this plan, retirees receive 50% of their final basic pay after completing 20 years of service, with an additional 2.5% for each additional year of service.
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High-36 Retirement System
This plan calculates retirement pay for service members who entered between September 8, 1980, and August 1, 1986, based on the average of their highest 36 months of basic pay. Retirees earn 2.5% of the High-36 average for each year of service.
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Disability Retirement
Service members with service-connected disabilities may qualify for disability retirement. The monthly pay is calculated based on either the disability rating or years of service, whichever results in a higher amount. Additionally, disability retirement benefits are often tax-exempt.
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REDUX Retirement System
Applicable to those who opted for a $30,000 Career Status Bonus, REDUX offers reduced monthly payments but includes an annual cost-of-living adjustment. Retirement pay is calculated using a 2% multiplier for each year of service after 20 years.
Loan Benefits for Service Members
When facing major financial needs — such as relocations, home purchases or unexpected emergencies — service members and their families can explore specialized loan options and protections tailored to their unique circumstances.
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Servicemembers Civil Relief Act (SCRA)
The SCRA provides financial protections to active-duty service members by limiting interest rates on pre-service loans and credit to 6% annually. It also protects against foreclosure, eviction and certain legal actions, ensuring service members can focus on their duties without undue financial stress. SCRA benefits apply to various loan types, including mortgages, auto loans and credit cards.
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VA Home Loans
The VA Home Loan program offers eligible service members, veterans and their families access to mortgage loans with no down payment, competitive interest rates and no private mortgage insurance (PMI) requirement. This benefit makes homeownership more affordable for military families, even with frequent relocations.
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Advance Pay for Permanent Change of Station Moves
Service members undergoing a permanent change of station can request advance pay to cover moving-related expenses, such as packing supplies, transportation and temporary housing costs. This interest-free loan is repaid through deductions from future paychecks, easing the upfront financial strain of relocation.
Military Education Opportunities
One of the most significant benefits of military service is access to education benefits, which can cover tuition, training and certifications for service members, spouses and dependents. Beyond the well-known GI Bill, additional programs and scholarships are designed to help military families achieve their educational goals.
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Military Tuition Assistance (TA)
TA provides financial aid for tuition for active-duty, National Guard and reserve service members. It covers up to 100% of tuition expenses for eligible courses, with a cap of $250 per semester hour and an annual maximum of $4,500. TA can be used for degrees, certifications or vocational training, making it a versatile tool for continuing education.
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Post-9/11 GI Bill
The Post-9/11 GI Bill offers comprehensive education benefits to service members who served on active duty after September 10, 2001. Benefits include tuition and fees, a monthly housing allowance and a stipend for books and supplies. Service members can also transfer unused benefits to their spouses or children, providing additional educational support for their families.
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Yellow Ribbon Program
The Yellow Ribbon Program complements the Post-9/11 GI Bill by covering tuition and fees that exceed the maximum GI Bill benefits. It's particularly useful for attending private institutions, out-of-state schools or graduate programs. Not all schools participate, so check eligibility with your chosen institution regularly.
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Military Spouse Career Advancement Accounts (MyCAA)
The MyCAA scholarship provides up to $4,000 in financial assistance to military spouses pursuing professional licenses, certifications or associate degrees. This program supports career advancement in high-demand fields, ensuring military spouses can build their careers despite frequent relocations.
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Montgomery GI Bill (MGIB)
The MGIB offers education benefits for active duty and selected reserve service members. While service members must contribute, the fund provides significant financial support for degree programs, technical training and flight training.
Free Financial Counseling Services
Free financial counseling is widely available to military families through programs like Military OneSource, which offers confidential guidance on budgeting, saving and debt management. Installation financial readiness programs provide workshops and one-on-one counseling tailored to military life. Meanwhile, nonprofit organizations like the National Foundation for Credit Counseling offer specialized services for service members and their families.
Active-duty service members can also benefit from the free credit monitoring services offered by Experian, Equifax and TransUnion. These services send alerts about changes in credit files, such as new accounts or missed payments, enabling service members to quickly address fraudulent activity and protect their financial standing.
Employment Resources for Military Spouses
Military spouses can utilize various resources to help them find employment, build new skills and advance their careers. These programs are especially helpful for spouses who relocate frequently or need flexible career options to align with the demands of military life.
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Military Spouse Employment Partnership (MSEP)
The MSEP, an initiative by the Department of Defense, connects military spouses with over 500 employer partners committed to hiring and supporting military families. These employers offer flexible, portable jobs that align with the lifestyle and needs of military spouses.
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USAJobs Military Spouse Employment Preference
Military spouses may receive hiring preference for federal government jobs through the USAJobs portal. This program gives spouses of active-duty service members an edge in the competitive federal job market, offering stability and growth opportunities.
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Spouse Education and Career Opportunities (SECO)
SECO, provided by Military OneSource, offers personalized career counseling, resume assistance and job search tools tailored to military spouses. SECO also connects spouses with education and training resources to enhance their qualifications.
Additional Military Benefits and Discounts
Outside of essential categories like housing, health care and education, the military provides additional benefits and discounts. These include financial support for specific situations, such as family separation or adoption, and discounts on everyday expenses, travel and recreational activities. Exploring all available benefits ensures military families can make the most of the resources offered.
- Family Separation Allowance (FSA): FSA provides up to $250 per month to service members with dependents during unaccompanied tours of duty. This benefit compensates families for the financial and emotional strain of separation caused by military assignments.
- Adoption Reimbursement Program: Service members who adopt children may qualify for up to $2,000 in reimbursement per child for adoption-related expenses, with a maximum of $5,000 per year. This program helps offset the high costs associated with adoption.
- Morale, Welfare and Recreation (MWR) Benefits: MWR programs offer discounted access to recreational activities, fitness centers, travel services and entertainment options. These benefits enhance the quality of life for service members and their families at a reduced cost.
- Commissary and Exchange Benefits: Military families can save significantly by shopping at on-base commissaries and exchanges. These stores offer groceries, household goods and other products at reduced prices compared to civilian retail options.
- Child Care Assistance: Programs like Child Care Aware and military child development centers provide affordable, high-quality child care for service members. Subsidies and priority placement help reduce the financial burden of child care.
Military Family Finances FAQ
Below are answers to some of the most frequently asked questions to help military families effectively plan their finances.
How can military families manage frequent relocations financially?
Frequent relocations due to permanent change of station moves can strain a family's finances. Programs such as Advance Pay allow service members to request funds in advance to cover moving expenses, which are repaid over time. Dislocation Allowance (DLA) offers a one-time payment to offset unreimbursed relocation costs. Careful budgeting and planning for potential out-of-pocket expenses can ease the financial burden of frequent moves.
How can military families protect themselves from financial scams?
To avoid financial scams, military families should stay informed about common fraud schemes targeting service members. Trusted resources, such as installation financial counselors, can help families identify and report scams. Families should also regularly monitor credit reports and bank statements to detect authorized transactions and secure financial accounts.
How can military families manage child care and school enrollment?
For service members whose children are old enough to be enrolled in school, the Department of Defense Education Activity operates schools on military bases worldwide. Additionally, many public schools are available on military bases around the world. The DODEA offers a virtual high school option for teens who don't want to be on campus to receive an education.
The on-base school systems also offer several potential employment opportunities for military spouses, including teaching, substitute teaching and tutoring. Military members can also access Military Child Care. This online system allows military families to find military-based child care around the globe, including both in-home and daycare facility options.
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Below are additional resources to help military families and veterans navigate various aspects of finance, employment and daily life.
- Understanding Car Insurance for Military and Veterans: Military service members and veterans have access to car insurance discounts and coverage tailored to their unique lifestyles. Learn how to find the right policy and save on premiums.
- Tax Benefits for Military and Veterans: Understanding military-specific tax benefits can help service members and veterans reduce their tax burdens. Explore available credits, deductions and filing tips.
- Guide to Starting a Veteran-Owned Business: Veterans interested in entrepreneurship can access funding, training and resources to launch their own businesses. Discover how to take advantage of veteran-focused programs to achieve your goals.
- Job Search Guide for Veterans: Transitioning to civilian life can be challenging for veterans. This guide offers tips, resources and programs to help secure meaningful employment after military service.
- Transportation Support for Veterans: Accessing reliable transportation is crucial for veterans. Learn about transportation programs and benefits designed to make mobility easier.
- Mental Health Help for Veterans: Mental health resources are essential for veterans adjusting to civilian life. Explore support programs, counseling services and crisis intervention resources tailored to veterans.
- Financial Assistance for Women Veterans: Women veterans have access to specific financial assistance programs to support their unique needs. Learn about grants, housing aid and career resources available for female service members.
About Rachael Brennan
Rachael Brennan is a licensed insurance agent with over a decade of experience in the industry. She holds a property and casualty (P&C) license across all 50 states and a life, health, and accidental death and dismemberment (AD&D) license in New York and surrounding states. She writes personal finance and insurance content for MoneyGeek, specializing in property, casualty, health, life and accidental death and disability insurance.
Brennan earned her Bachelor of Science in Communications from Texas A&M University-Commerce. As a writer, she uses her insurance and personal finance experience to share practical knowledge and help people make informed financial decisions.
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