Military Retirement Planning - Tax-Free Strategies for Veterans

Retirement Landscape for Military Veteran / Active Duty

Military members who serve 20+ years receive a defined benefit pension of 50-75% of base pay, which is fully taxable at the federal level (many states exempt military pension). The Blended Retirement System (BRS) for newer service members includes a smaller pension plus TSP (Thrift Savings Plan) contributions.

Key Numbers: 20-year pension: 50% of base pay. 30-year pension: 75% of base pay. VA healthcare benefits reduce medical expenses significantly. Many veterans retire at 40-45.

Common Retirement Challenges

Challenges that Military Veteran / Active Duty typically face

! Military pension fully taxable federally

! Early retirement age means long period before full Social Security

! Second career income plus pension creates high combined tax burden

! TSP (Thrift Savings Plan) has required minimum distributions

! Planning across multiple states as military families move frequently

How IUL Solves These Problems

Military pensions are fully federally taxable, and many veterans continue working, compounding their tax burden. IUL provides a complementary tax-free income stream. Veterans often have health advantages from military service (good insurability) making IUL qualification easier than civilians of similar age.

The Key Advantage: IUL policy loans are not considered taxable income at the state or federal level. This means no IRMAA triggers, no Social Security taxation thresholds crossed, and no impact on means-tested benefits.

Key Strategies for Military Veteran / Active Duty

Get a Retirement Plan Designed for Military Veteran / Active Duty

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