Military Officers - Go for "Excellent" in your Financial Advisor

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I’ll be honest. Commissioning Week in Annapolis gives me all of the feels. The Blue Angels have been roaring overhead, and today, when I looked out at the field of nearly 1,000 midshipmen in their crisp summer whites (and a few almost Marines in their dress blues), it tugs at my heart. I may not know them, but they are a part of my town, and as a part of the Navy family, I will always feel connected to them. They have worked hard, and they are about to embark on an experience that will forever shape them.

The maternal part of me wants to make sure they are taken care of and remain safe. The financial planner in me hopes that they will save money and turn to a professional to guide them through the blind spots and complex decisions that come up over time.

These freshly commissioned Navy ensigns and Marine Corps second lieutenants are educated and gainfully employed. A regular paycheck will not be a worry while they are in the service. Military officers tend to do well financially. They make good pay, are often disciplined about saving, and try to make responsible decisions.

These young officers will soon enough have their performance evaluated by their respective commands, some will do better than others – in their careers and the management of their finances.

All branches of the military use a performance evaluation system where members are ranked against their peers. It’s a bit competitive in that there’s a limit on how many “excellent” or “very satisfactory” ratings can be doled out. Similarly, management of personal finances can be considered this way.

There are several large institutions with long-established connections to the military community. New military officers tend to sign up with them and often start a habit of regularly saving into instruments like mutual funds. Saving is good. Discipline is good. Let’s call this “satisfactory”.

Over time, with promotions and pay increases and marriages and kids and mortgages, military officers may look for asset management beyond mutual funds. They’ll contribute to their TSP, and try to take full advantage of tax benefits with IRAs. Investments grow. Things look good. Let’s call this “very satisfactory”.

Eventually though, to get to that “excellent” rating, more individualized management is needed. That large institution that was a good place to get started saving may not be looking at tax returns and a larger financial picture, and maybe when a senior officer is expecting to take a tax deduction on their IRA contributions, but they’ve crossed over an income limit for that deduction, that institution or investment advisor didn’t know – or care – to alert that officer that they wouldn’t be able to take that deduction any longer, and may be in for a big tax bill if they don’t adjust accordingly.

A military officer who has neared retirement from service didn’t get there by accepting mediocrity. Excellence is expected. So how does one go from “very satisfactory” to “excellent” in managing their financial life?

A financial planner does more than manage investments. That is certainly a big part of reaching financial goals, but it’s not enough for excellence.

As a fee-only planner, former Navy wife, and daughter of a veteran, I want excellence for my military clients. I want to assure that there are no unpleasant surprises on tax bills or college funding or retirement goals, or when the unthinkable happens – a service member is killed in the line of duty and a bereaved spouse is left shattered and trying to make overwhelming financial decisions.

My hope for all the newly commissioned officers and all who have come before them to have rich full lives and never have to worry about their financial picture. When they are ready for excellence, I am here.

Bridget Borel

Financial Advisor

RCS Financial Planning

Photo by Todd Diemer