About one in five veterans in their 50s and 60s is making less than $25,000 a year, while almost a quarter of veterans younger than 40 years old are earning at least $50,000, a recent survey of veterans from all branches found.
The Veterans Financial Preparedness Report 2019, produced by the Legionnaire Insurance Trust (LIT) for the Departments of The American Legion, surveyed about 1,500 veterans on financial confidence and retirement planning, breaking down the results by age. LIT provides insurance and other benefits to American Legion members.
While the report focused mostly on ways for veterans to get on track financially for retirement, its breakdown of household income showed that older veterans are not making as much as their younger counterparts.
"The younger veterans are way more prepared than their older veteran peers," Kim Crisanti, LightForce Marketing Inc. president and the survey's lead researcher in the LIT survey, told Military.com. "That is true. They're making more money, they have more money saved, they're smarter about finances, and I think a lot of that has to do with the education on base."
She added that they found a direct correlation between veterans who took financial literacy courses or met with a counselor during their service and being more prepared for retirement.
"And I think that's a wonderful thing because these younger veterans understand that they're not going to be getting out of the military with a military pension," Crisanti said. "Only like 30 percent have a military pension."
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Retirement pay is reserved for troops who have retired after meeting service-length qualifications (typically at least 20 years) or have secured a medical retirement.
The Millennial generation -- including those born between about 1980 and 2000 -- has been criticized for saving less and carrying more debt than previous generations. But for Millennial veterans, the stereotype appears not to hold true.
In addition to saving for retirement earlier, surveyed veterans younger than 40 years old are saving more in their emergency fund, the survey found.
About a quarter of all surveyed veterans younger than 40 years old have between $10,000 and $25,000 saved in their emergency fund, compared to a quarter of surveyed veterans in their 40s, who have between $1,500 and $5,000.
Having an emergency fund is one of five attributes the survey identified in financially prepared military families. The others were saving early, knowing about personal finances, working with a professional financial adviser and frequently revisiting financial plans.
According to Russell Simmons, co-chair of the Schwab Military Veterans Network, there's still time for veterans to use these five tips to correct for retirement.
"It is never too late to start saving. The sooner you take action, the better," Simmons, who is also a chief warrant officer in the Army Reserve, said in the report. "There are instruments in place to help, even if you feel like you started later in life than you wanted to, including 'catch-up' instruments for those who are older than 50."
More than one-half of veterans surveyed said they feel behind on their retirement.
"Just as service members get a periodic health assessment to ensure medical and dental readiness in the military, I think everyone needs a periodic financial assessment to help ensure they can meet their financial goals and are prepared for retirement," Simmons said, encouraging the use of a financial adviser.
Less than one-third of veterans surveyed said they work with a personal financial adviser. Most said it was because they don't think they have enough investments.
But the report named the Financial Planning Association and the Foundation for Financial Planning as places to go for free financial help planning.
"That's where it all starts -- with the financial plan," Simmons said, "so you can build those opportunities and identify what needs to be done."
-- Dorothy Mills-Gregg can be reached at dorothy.mills-gregg@military.com. Follow her on Twitter at @DMillsGregg.
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