Members of the military and armed forces tend to lead busy lives and are often not on the same day-to-day work routine as everyone else. When it comes to investing, military members also do not have access to all of the same investment plans that workers in the private sector do. Their busy schedules may not leave them with enough free time to do a lot of research on the investments available to them, which are already less well-known than those offered to their peers.

For example, even if you don’t know much about how it works, most people have probably heard of a 401(k), as it’s one of the most popular retirement investment accounts around. Military members however, cannot participate in 401(k)s like those in private workplaces, and instead have their own retirement savings plans offered by the federal government.

Below is a helpful roundup of the best investments for military families to consider.

Best investments for military members

Pay off your debts first

According to a recent survey by nonprofit credit counseling service American Consumer Credit Counseling, 27 percent of military service members had more than $10,000 in credit card debt compared with 16 percent of civilians. It is a long and touted principle in investing that paying off your debts first — especially credit card debt —  is paramount in any financial plan, but it is even more important for members of the military. Unfortunately, the  constantly shifting schedule and frequent location changes for military families can make it harder to build an emergency fund and eliminate debt. .

The unemployment rate among military spouses has been around 25 percent for the last decade, but according to a 2023 survey by Blue Star Families, 50 percent of active-duty military families named spouse employment as their top concern. Moving around from post to post makes it difficult for many military spouses to maintain a job, which can also make accumulating debt easy, and paying it off harder. But it’s crucial to stay vigilant against mounting debt obligations.

If you’re struggling with debt, getting a proper repayment plan in place can help. Check your credit score and assess where you are and how much needs to be repaid. From there, start a realistic budget and if you can, put aside 10-20 percent of your income each month for debt repayment. 

Invest in education

Education is one of the best investments anyone can make, and the military  has wonderful benefits for those who choose to pursue higher education. One such avenue is through the Defense Activity for Non-Traditional Education Support, or DANTES. The program allows military members to take College Level Examination Program (CLEP) tests, DANTES Subject Standardized Tests and Excelsior College Exam Tests for free.

These tests give Credit-by-Exam, meaning you gain college credit by taking an exam to show you understand the knowledge. These exams and their credits are accepted at 2,900 colleges throughout the country.

Military members can take enough of these tests to earn an Associate’s degree for free, and do so without ever stepping into the classroom. Further, military members can use the American Council on Education’s recommendation to claim actual academic credit for military experience and training, depending on the program.

From there, programs like the Armed Forces Tuition Assistance Program are available to eligible members of the armed forces with the ability for students to receive up to $4,500 a year for 100 percent of tuition expenses.

If you’re saving for your children, consider a 529 plan. A 529 plan is an investment account that allows contributions to grow tax-deferred, and later withdrawn tax-free if used for qualifying educational purposes. A 529 plan is available to just about anyone.

In order to sign up, you will need to access your state’s specific 529 plan site, as each state distributes the plan under its own guidance. You can sign up for plans in other states than your own, but make sure to pay attention to each state’s tax guidance, especially if your post keeps you moving around.

The Federal Thrift Savings Plan

The Thrift Savings Plan, or TSP, is similar to a 401(k), but only offered to federal employees, making members of the uniformed services eligible. Federal employees are automatically enrolled in the TSP at 5 percent, meaning 5 percent is automatically deducted from each paycheck towards a TSP contribution. Some agencies will match TSP contributions, and others will not. This amount can be changed, but 1 percent is the minimum allowable contribution.

Like a 401(k), contributions to a TSP can be made on either a traditional or Roth basis. In a traditional TSP, money is taken out pre-tax (lowering your taxable income), your contributions grow tax-deferred, and is taxed once you begin taking distributions. In a Roth TSP, money comes out post-tax (meaning that you’ve paid taxes on it), grows tax-free, and is then taken out tax-free during retirement.

Contributions to TSP accounts are also allowed for uniformed services members while they are earning tax-exempt combat pay. These contributions will not be taxed, but earnings can be taxed when they are withdrawn. If the contributions are to be designated as Roth contributions, they will be tax-free during distribution if the usual qualifications are met.

The 2024 TSP elective deferral limit is $23,000. There is also a catch-up contribution limit of $7,500 for participants turning age 50 or older in 2022. This catch-up provision is above and beyond the regular contribution limit.

Savings accounts

Individual savings accounts are a critical part of any financial plan. Putting money aside, especially for military families who might change environments from one month to the next, is particularly important. 

Banks are especially amenable to the ever-changing needs of service members, and it’s important to let your bank know if you are an active-duty servicemember. The Servicemembers Civil Relief Act provides several protections for active-duty military, and taking advantage of them can be crucial in your financial plan.

Members of the military also have exclusive access to banking institutions and credit unions like Navy Federal Credit Union and USAA. These banks tend to offer exclusive perks to members that are not usually offered at other banks. USAA, for example, eliminated all out-of-network ATM fees in the United States for members in 2023. 

High-yield savings accounts are also a great option for members of the military, and many military banks offer them. These savings accounts offer a higher rate than regular savings accounts, and are a good place to park cash while earning a little bit of interest.

Another great savings option for military members is a Savings Deposit Plan. SDP accounts are offered through the Department of Defense and provide members of the uniformed services serving in designated combat zones the opportunity to increase their financial savings. Those who qualify can deposit up to $10,000 and earn 10 percent on an annual basis.

To put that into perspective, civilians rarely have the option to earn over 1 or maybe 2 percent with similar cash savings. Members must be receiving Hostile Fire Pay and be deployed for at least 30 consecutive days in the combat zone, or 1 in each of 3 consecutive months in order to be eligible. Money can only be withdrawn once they have left the combat zone.

U.S. savings bonds

Savings bonds are some of the safest investments around as they are backed by full faith and credit of the U.S. government. They can be purchased for as low as $25, and the interest on a savings bond is subject to federal income tax, but not state or local income taxes.

Savings bonds may be purchased directly from the Treasury Department, at your local bank or credit union, and can even be offered through payroll deductions. Savings bonds can be a way for military families to safely park money for an extended period of time without having to worry about it.

Further, only the person or persons who have registered a savings bond can actually receive payment for it, adding an extra layer of security. Interest earned is usually low – Series EE bonds are currently 2.7 percent through April 2024 – but there are others, like Series I bonds available for purchase, which yield a 5.27 percent composite rate through April 2024.


Military service members can invest in individual retirement accounts (IRAs) just like anyone else. After maxing out your military TSP, you might consider putting extra money aside into an IRA. These retirement-focused accounts can act as an ideal supplement to your other military benefits, like a pension. 

The contribution limit for any IRA in 2024 is $7,000, and investors have a choice between two different types:

Traditional IRA: Money goes in pre-tax (lowering your taxable income), grows tax-deferred, and is then taxed on the back end once distributions begin. Common investments in an IRA include mutual funds and ETFs.

Roth IRA: Money goes in post-tax (meaning you’ve paid taxes on it already), grows tax-free, and qualified withdrawals are then taken out tax-free.

Real estate

For military families, investing in real estate can be a great way to secure a place to live while building equity — even if it needs to be sold quickly due to changing posts. Once you have paid off your debts and secured a substantial nest egg of at least several months of living expenses for you and your family, buying a home could be a smart move.

Military members should be aware of the benefits afforded by VA loans. VA loans are provided by the U.S. Department of Veterans Affairs, and are offered through banks and mortgage companies. The VA guarantees a portion of the loan, allowing the lender to then provide the military member with more favorable terms.

No down payment is required, there are limited closing costs, there is no need for private mortgage insurance and members enjoy competitively-low interest rates. There is no other comparable plan out there that allows for so many benefits for first-time homebuyers.

If military members use the program for their first home, they can then use that same home and equity to sell and buy their next home depending on their changing posts and needs. This also helps build the path to wealth while enjoying advantaged benefits not offered to civilians.

Bottom line

Military members have a unique opportunity to take advantage of investments and savings that civilians do not have access to, but these plans often require more research to make the most of. Although not as universal as other investments, opportunities like the TSP, SDP and VA loans allow for flexibility and serve as a strong foundation for military members to build their finances.

By taking advantage of the special opportunities afforded through some of these programs and staying on top of debt, military families can build a solid path to financial success.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.